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mother, or in her own name. However, the evidence shows that
petitioner transferred significant amounts of money to his
mother’s accounts and had access to and control over those bank
accounts. During the years in issue, Helen Unger was retired and
had a modest income. Her gross income, which conceivably could
have been a source of some funds deposited to those accounts, was
subtracted from respondent’s net worth computation in arriving at
petitioner’s understatement of income.
When ownership or the source from which assets are purchased
by a taxpayer and his family are confused, the Commissioner is
permitted to resort to the use of a consolidated net worth
statement. See Smith v. Commissioner, 31 T.C. 1 (1958); Lias v.
Commissioner, 24 T.C. 280 (1955), affd. 235 F.2d 879 (4th Cir.
1956). Under the consolidated method, the combined taxable
income of the taxpayer and his family group is determined by
taking the increase in their combined net worth during each year,
adding personal expenses paid each year, and making proper
adjustments. From the combined taxable net income determined
under this method, the income reported for the other members of
the family group is deducted, leaving the taxable net income of
the taxpayer. See Lias v. Commissioner, supra; Friedman v.
Commissioner, T.C. Memo. 1968-145, affd. 421 F.2d 658 (6th Cir.
1970).
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