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was to estimate petitioner's income by starting with an adjusted
U.S. Department of Labor, Bureau of Labor Statistics (BLS) figure
and reducing that amount by the known sources of petitioner's
income, such as the Forms 1099 items.
Respondent's agent, at the time of the reconstruction had
only 1991 BLS information and used those amounts and adjusted
them by cost of living percentage increases applicable for the
years in question. The agent used three sources of BLS income
statistics, including those germane to petitioner's age,
occupation, and geographical location. The three sources were
then totaled and averaged for each year to arrive at the amounts
used--$40,984 for 1993 and $42,090 for 1994. After reduction for
petitioner's Forms 1099 income, which was known to respondent and
the allowance of a personal exemption and standard deduction,
petitioner's taxable income was determined to be $32,192 for 1993
and $32,866 for 1994.
Petitioner received unemployment compensation for 1993 and
he lived without cost in his mother’s home during 1993 and 1994.
Petitioner did not pay for meals taken at his mother's home.
Petitioner owned and operated automobiles of nominal value during
1993 and 1994. Petitioner's cost of living was below the average
due to his life style. At the time of trial petitioner was not
under criminal investigation by the Internal Revenue Service
(IRS).
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