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Glass Co., 348 U.S. 426, 431 (1955); Hawkins v. United States, 30
F.3d 1077, 1079 (9th Cir. 1994).
Taxpayers are required to maintain adequate records of
income. See sec. 6001. In the absence of adequate books and
records, the Commissioner may reconstruct a taxpayer's income by
any reasonable method that clearly reflects income. See sec.
446(b); Commissioner v. Hansen, 360 U.S. 446, 467 (1959); Harper
v. Commissioner, 54 T.C. 1121, 1129 (1970). The bank deposits
method is an accepted method of income reconstruction when a
taxpayer has inadequate books and records and large bank
deposits. See DiLeo v. Commissioner, 96 T.C. 858, 867 (1991),
affd. 959 F.2d 16 (2d Cir. 1992); Parks v. Commissioner, 94 T.C.
654, 658 (1990).
Bank deposits are prima facie evidence of income. See
Clayton v. Commissioner, 102 T.C. 632, 645 (1994). The taxpayer
has the burden of proving that the bank deposits came from a
nontaxable source. See Rule 142(a); Clayton v. Commissioner,
supra at 645; Estate of Mason v. Commissioner, 64 T.C. 651, 657
(1975), affd. 566 F.2d 2 (6th Cir. 1977); Sproul v. Commissioner,
T.C. Memo. 1995-207. The bank deposits method assumes that all
money deposited into a taxpayer's bank account during a given
period constitutes taxable income, but the Government must take
into account any nontaxable source or deductible expense of which
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