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Respondent then took the adjusted expenditures for one person and
applied the Consumer Price Index based on the Denver area to
determine the necessary income for petitioner to live on during
1990 through 1993. Thus, the Bureau of Labor Statistics method
resulted in determined income of $22,034 for 1990, $22,886 for
1991, $23,733 for 1992, and $24,738 for 1993.
Section 61 provides, in part, that gross income means income
derived from business and as compensation for services. Section
63(b) provides that, in the case of an individual who does not
elect to itemize deductions, the term "taxable income" means
adjusted gross income minus the standard deduction and the
deduction for personal exemptions. Section 63(c) provides the
amount of the basic standard deduction for the years 1990 through
1993 for an individual married and filing separately. Respondent
allowed petitioner these deductions.
Section 151 provides for a personal exemption. Petitioner
presented no evidence that he is entitled to claim any exemption
other than for himself.
Petitioner was required to maintain books and records
sufficient to establish the amount of his gross income. Sec.
6001; DiLeo v. Commissioner, 96 T.C. 858, 867 (1991), affd. 959
F.2d 16 (2d Cir. 1992). He failed to do so. Therefore,
respondent was authorized to compute petitioner's income by any
method that clearly reflected income. Sec. 446(b); Holland v.
United States, 348 U.S. 121 (1954). Any such reconstruction of
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