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taxable income for each taxable year and must maintain
such accounting records as will enable him to file a
correct return. See section 6001 and the regulations
thereunder. Accounting records include the taxpayer's
regular books of account and such other records and
data as may be necessary to support the entries on his
books of account and on his return * * *"
Respondent's determination of taxable income is
presumptively correct. Rule 142(a); Welch v. Helvering, 290 U.S.
111, 115 (1933); Mendelson v. Commissioner, 305 F.2d 519, 522
(7th Cir. 1962), affg. T.C. Memo. 1961-319.
Where a taxpayer fails to maintain or produce adequate books
and records, the Commissioner is authorized to compute the
taxpayer's taxable income by any method which, in the
Commissioner's opinion, clearly reflects the taxpayer's income.
Sec. 446(b); Holland v. United States, 348 U.S. 121, 134 (1954);
Webb v. Commissioner, 394 F.2d 366, 371-372 (5th Cir. 1968),
affg. T.C. Memo. 1966-81; Harbin v. Commissioner, 40 T.C. 373,
377 (1963). The Commissioner's method need not be exact but must
only be reasonable in light of the surrounding facts and
circumstances. Holland v. United States, supra; Rowell v.
Commissioner, 884 F.2d 1085, 1087 (8th Cir. 1989), affg. T.C.
Memo. 1988-410; Giddio v. Commissioner, 54 T.C. 1530, 1533
(1970).
Here, the principal issue is the amount of petitioners'
gross income for the years in issue. Petitioners' bookkeeping
practices have failed to produce "such other records and data as
may be necessary to support the entries on his books of account
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