Alan Michael Newman - Page 6

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          Bureau of Labor Statistics' data in reconstructing a taxpayer's             
          income has been held to be reasonable.  Giddio v. Commissioner,             
          54 T.C. 1530 (1970); Bennett v. Commissioner, T.C. Memo. 1998-96.           
               Respondent attempted to obtain information from petitioner             
          once he had been identified as a nonfiler.  Petitioner was not              
          cooperative.  Respondent obtained information from the various              
          institutions that reported Form 1099 information regarding                  
          petitioner.  Respondent reconstructed petitioner's income using             
          this Form 1099 data.  Respondent also increased petitioner's                
          income using amounts determined from the Bureau of Labor                    
          Statistics.  In doing so, respondent increased petitioner's 1990,           
          1991, and 1993 taxable income by $21,178, $19,771, and $10,913,             
               Petitioner testified that he was single and that his living            
          expenses were minimal.  Petitioner spent some part of the years             
          in issue living rent free with a friend.  When petitioner did pay           
          rent during the years in issue, it varied from $250 to $350 per             
          month, which included utilities.2  Petitioner did not eat out               
          very often.  Petitioner's phone bill was approximately $25 per              
          month.  Petitioner did not have any medical expenses during the             
          years in issue and did not have medical insurance.  Petitioner              

               2    Petitioner also testified that this amount included               
          food.  From this amount approximately $20 to $30 per week was               
          spent on groceries.                                                         

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