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5,000 miles for commuting mileage--20 miles a day--in light of
the United States Supreme Court's decision in Commissioner v.
Soliman, 506 U.S. 168 (1993).
At the time they submitted their trial memorandum to this
Court, petitioners reconstructed their 1992 mileage to reflect a
total of 40,045 business miles.
OPINION
A. Additional Income
Section 6001 requires taxpayers to maintain records
sufficient to establish the amount of their gross income and
deductions. Where taxpayers fail to keep adequate records, the
Commissioner is authorized by section 446(b) to reconstruct their
income by any reasonable method. Petzoldt v. Commissioner, 92
T.C. 661, 687, 693 (1989). Use of the bank deposits method for
reconstructing income is well established. DiLeo v.
Commissioner, 96 T.C. 858, 867 (1991), affd. 959 F.2d 16 (2d Cir.
1992); Estate of Mason v. Commissioner, 64 T.C. 651, 656 (1975),
affd. 566 F.2d 2 (6th Cir. 1977). Under the bank deposits
method, there is a rebuttable presumption that all funds
deposited to a taxpayer's bank account constitute taxable income.
Price v. United States, 335 F.2d 671, 677 (5th Cir. 1964);
Hague Estate v. Commissioner, 132 F.2d 775, 777-778 (2d Cir.
1943), affg. 45 B.T.A. 104 (1941); DiLeo v. Commissioner, supra
at 868. The Commissioner must take into account any nontaxable
sources of deposits of which she is aware in determining the
portion of the deposits that represent taxable income, but she
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Last modified: May 25, 2011