Joyce E. Hastings - Page 18




                                        - 18 -                                         

          1990, and 1991, respectively.  Subsequently, respondent conceded             
          $7,400 of the $15,499 unreported gross receipts adjustment for               
          1990 and $5,080 of the $22,410 unreported gross receipts                     
          adjustment for 1991.                                                         
               It is well established that respondent may utilize indirect             
          methods of reconstructing a taxpayer’s income.  Where a taxpayer             
          fails to provide adequate records, an indirect method may be used            
          to reconstruct income.  See Holland v. United States, 348 U.S.               
          121 (1954).  Respondent used the bank deposits method to                     
          reconstruct petitioner’s income.  The bank deposits method has               
          been approved as an indirect method with which to reconstruct                
          income.  See United States v. Carter, 721 F.2d 1514, 1538 (11th              
          Cir. 1984) (citing United States v. Boulet, 577 F.2d 1165 (5th               
          Cir. 1978)); Holland v. United States, supra.  Petitioner must               
          show by a preponderance of the evidence that respondent’s                    
          determination is erroneous.  See Rule 142(a); Welch v. Helvering,            
          290 U.S. 111 (1933); Webb v. Commissioner, 394 F.2d 366, 372 (5th            
          Cir. 1968), affg. T.C. Memo. 1966-81.                                        
               Petitioner did not offer records of her law practice or a               
          methodology that would more clearly reflect income than the bank             
          deposits reconstruction used by respondent.  In addition,                    
          petitioner does not question respondent’s approach or methodology            
          in reconstructing her income by means of the bank deposits                   
          method.  Instead, she contends that some of the deposits that                





Page:  Previous  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: May 25, 2011