Stanley J. Zaban and Shirley A. Zaban - Page 20

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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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