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Commissioner, 64 T.C. 651, 656-657 (1975), affd. 566 F.2d 2 (6th
Cir. 1977).
The parties stipulated that Agent Careswell's bank deposits
analysis is correctly computed. Normally, when the
Commissioner's agents have performed such an analysis, taxpayers
attempt to show that the bank deposits analysis is faulty by
identifying nontaxable deposits. By stipulating to the
mathematical correctness of respondent's bank deposits analysis,
petitioners are left with the option of either showing a method
that more correctly reflects income or explaining why particular
deposits are nontaxable.
Petitioners argue that a check exchange analysis rather
than a bank deposits analysis should be used to determine
petitioners' taxable income. Petitioners, however, do not
precisely explain how the bank deposits analysis should be
adjusted to account for their theory. In particular, they do not
account for the possibility that other likely and demonstrated
sources of unreported income may be more accurately reflected by
the bank deposits analysis. It is petitioners' obligation to
show that particular deposits or amounts should be subtracted
from the deposits computed by respondent. Parks v. Commissioner,
94 T.C. 654, 658 (1990). This petitioners have not done.
Petitioners contend that we should rely on a modified
version of the bank deposits analysis that was performed by Agent
Careswell. Careswell prepared a check spread to analyze
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