- 12 - "unreported income" item in each notice of deficiency represents petitioner's cost of living during the respective year in issue.4 It is not clear, however, that the "unreported income" amounts determined by respondent constitute a reasonable approximation of petitioner's cost of living in years where petitioner has stipulated or admitted to income from other sources in amounts that may have been used to meet his cost of living.5 With these considerations in mind, we review the evidence for each year. 1988 The parties have stipulated that petitioner received wages of $14,239 and interest income of $13 in 1988. It has also been stipulated that in 1987 petitioner purchased business property in Cortland, Illinois (the Crazy Horse property), and operated the Crazy Horse Saloon on these premises in 1987 and 1988. In connection with the trial of this case, petitioner completed and signed a 1988 Federal income tax return, on Schedule C of which 4 We note that respondent in this case did not provide the supporting detail with respect to the BLS reconstruction that was provided by the Commissioner in Giddio v. Commissioner, 54 T.C. 1530 (1970). 5 Respondent also relies on Diercks v. Commissioner, T.C. Memo. 1996-345, a case in which we sustained determinations of unreported income based on reconstructions from BLS data. However, Diercks is distinguishable from some of the years at issue in the instant case. In Diercks, the taxpayer denied receiving income greater than $500 in each year, despite proof of expenditures for living expenses that far exceeded that amount. Here, petitioner has stipulated or admitted to income in some years that could be sufficient to meet his living expenses.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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