- 5 - alleges a nontaxable source, negate each nontaxable source alleged by the taxpayer. United States v. Massei, 355 U.S. 595 (1958); Holland v. United States, 348 U.S. 121, 137-138 (1954); Armes v. Commissioner, supra; Parks v. Commissioner, supra at 661. If the Commissioner connects the bank deposits to a likely source of income, the finder of fact may properly conclude that such deposits are income. Holland v. United States, supra; Armes v. Commissioner, supra. Respondent has the burden of proof in the instant case because the issue before us pertains to an increased deficiency. Rule 142(a). Moreover, because petitioner does not contend that the deposits at issue stem from a nontaxable source, respondent must connect the deposits to a likely source of income in order to satisfy the burden of proof. Respondent maintains that a preponderance of the evidence indicates that the deposits at issue stem from a taxable source of income. Specifically, it is respondent's contention that petitioner conducted a bookkeeping business during 1991, and that the deposits were made with checks that petitioner received in exchange for services that she performed in connection with that business. As support for this argument, respondent explains that the checks at issue were deposited into petitioner's "business" bank account. Respondent also explains that a majority of the checks at issue were made payable to petitioner's business andPage: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011