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respondent erroneously included in the calculation of petitioner's
unreported gross receipts:
1990 1991 1992 1993
Vanderhaydens $11,814.70 $21,181 $15,096 $15,896
Stennett/others --- 37,000 --- ---
Respondent maintains that to the extent petitioner made cash
payments to the Vanderhaydens and/or Mr. Stennett (and others),
such payments were made with funds not considered by respondent in
the determination of petitioner's unreported gross receipts.
Discussion
Section 6001 requires all taxpayers to maintain adequate books
and records of taxable income. In the absence of adequate books
and records, the Commissioner may recompute the taxpayer's income
by any reasonable method that clearly reflects the taxpayer's
income. Sec. 446(b); Holland v. United States, 348 U.S. 121, 130-
132 (1954); Parks v. Commissioner, 94 T.C. 654, 658 (1990). One of
these methods is the bank deposits method. DiLeo v. Commissioner,
96 T.C. 858, 867 (1991), affd. 959 F.2d 16 (2d Cir. 1992).
Although not conclusive, the bank deposits calculation is
considered to be prima facie evidence of income. Tokarski v.
Commissioner, 87 T.C. 74, 77 (1986). Here, because petitioner did
not file income tax returns for the years in issue, the
Commissioner reconstructed petitioner's income for each of these
years through the use of the bank deposits method combined with
specific nondeposited cash sales of cattle.
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