Rilwan Adisa Salami - Page 3

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          28, 1992, to October 12, 1993, petitioner drove a 1992 Chevrolet            
          Caprice that he leased from Yellow Cab Company.                             
               Petitioner was granted permanent resident alien status on              
          September 25, 1996, by the U. S. Department of Justice                      
          Immigration and Naturalization Service.                                     
               The first issue for decision is whether petitioner had                 
          unreported Schedule C gross receipts in the amounts determined by           
          respondent.  Respondent's determinations in the statutory notice            
          of deficiency are presumed to be correct, and petitioner bears              
          the burden of proving otherwise.  Rule 142(a); Welch v.                     
          Helvering, 290 U.S. 111, 115 (1933).                                        
               All taxpayers are required to maintain records sufficient to           
          determine their correct tax liability.  Sec. 6001.  Such records            
          must be retained by the taxpayer "so long as the contents thereof           
          may become material in the administration of any internal revenue           
          law."  Sec. 1.6001-1(e), Income Tax Regs.                                   
               If a taxpayer keeps no records or it appears that records              
          that are kept do not clearly reflect income, respondent may                 
          reconstruct income under a method which does clearly reflect                
          income.  Sec. 446(b).  Once it is established that a                        
          reconstruction is necessary, respondent has great freedom in the            
          method of reconstruction used.  Catalano v. Commissioner, 81 T.C.           
          8, 13 (1983), affd. without published opinion sub nom. Knoll v.             
          Commissioner, 735 F.2d 1370 (9th Cir. 1984).                                

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