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Underpayment
With respect to the first prong of the test, respondent need
not prove the precise amount of the underpayment resulting from
fraud, but only that some part of the underpayment of tax for
each year in issue is attributable to fraud. Lee v. United
States, 466 F.2d 11, 16-17 (5th Cir. 1972); Plunkett v.
Commissioner, 465 F.2d 299, 303 (7th Cir. 1972), affg. T.C. Memo.
1970-274. Respondent may not, however, simply rely upon
petitioner’s failure to show error in the determinations of the
deficiencies. DiLeo v. Commissioner, 96 T.C. at 873; Petzoldt v.
Commissioner, supra at 700.
1987
As noted above, respondent reconstructed petitioner’s income
for 1987 using the bank deposit method, and we are satisfied that
respondent’s bank deposit analysis establishes that petitioner
had substantial unreported income during that year. In contrast
to the net worth and cash expenditures methods, it is not
necessary to establish a taxpayer’s opening net worth in order to
show the receipt of taxable income by means of the bank deposit
method. United States v. Conaway, 11 F.3d 40, 43 (5th Cir.
1993). “Such proof is not required because the evidence of bank
deposits suffices to raise the inference that the taxpayer’s
income came from a taxable source.” Id. Where the Commissioner
has the burden of proof, the Commissioner must, however,
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