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for negligence or disregard of rules or regulations for 1989
against Mrs. Zaban.
OPINION
Issue 1. 1989 Net Worth Calculation
The first issue for decision is whether respondent properly
determined $115,100 as cash on hand as part of the 1989 net worth
calculation. Petitioners assert that the cash belonged to Mr.
Neumyer.
The net worth method has been approved as a means of
reconstructing the income of taxpayers who fail to report income
and do not maintain adequate books and records. Holland v. United
States, 348 U.S. 121 (1954); Lias v. Commissioner, 235 F.2d 879,
880 (4th Cir. 1956), affg. 24 T.C. 280 (1955); Estate of Beck v.
Commissioner, 56 T.C. 297, 353-354 (1971). Deficiencies determined
by indirect methods generally are presumed correct, Mills v.
Commissioner, 399 F.2d 744, 749 (4th Cir. 1968), affg. T.C. Memo.
1967-67, and taxpayers bear the burden of proving that such
deficiencies are erroneous, Rule 142(a); Parks v. Commissioner, 94
T.C. 654, 658-659 (1990). The net worth method requires a finding
of both the beginning and ending net values of a taxpayer's assets.
Holland v. United States, supra at 125.
Mr. Zaban asserts that the contents of box 3567, in which the
$115,100 cash was found, belonged to Mr. Neumyer. Mr. Zaban claims
that Mr. Neumyer gave him between $155,000 and $175,000 in 1984 to
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