- 11 - other means, such as by showing Weimerskirch's net worth, bank deposits, cash expenditures, or source and application of funds.” Id. Additionally, in Weimerskirch, the taxpayer was not shown by admissible evidence to have actually possessed any of the funds that the Commissioner determined to be taxable income. In the instant case, the various petitioners were connected to the funds forming the basis of the deficiency by respondent's analysis of bank deposits and expenditures. “[C]onnecting * * * [the taxpayer] to the funds that form the basis of the deficiency is sufficient to give him the burden of proving the deficiency determination erroneous.” Schad v. Commissioner, 87 T.C. at 620. Respondent has substantiated her determination with predicate evidence; she used the bank deposits and cash expenditures method of income reconstruction. See Blohm v. Commissioner, 994 F.2d 1542, 1549 (11th Cir. 1993), affg. T.C. Memo. 1991-636 (once the Tax Court has found the Commissioner has made a minimal evidentiary showing, the deficiency determination is presumed correct); Erickson v. Commissioner, 937 F.2d 1548, 1551 (10th Cir. 1991), affg. T.C. Memo. 1989-552 (the key is connecting taxpayers to assets, not to a business). The burden of proof therefore lies with petitioners to show error in respondent's determinations. Unreported Income--the Dickersons Revenue Agent Anita Russell, using a bank deposits analysis, determined that the Dickersons had unreported income in thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011