- 33 -
Commissioner, 70 T.C. [1057,] * * * 1066 [(1978)].
Alternatively, where the taxpayer alleges a nontaxable
source, respondent may satisfy * * * [the] burden by
disproving the nontaxable source so alleged. United States
v. Massei, 355 U.S. 595 (1958); Parks v. Commissioner, supra
at 661. * * * [DiLeo v. Commissioner, 96 T.C. at 873.]
Table 2, supra, summarizes respondent’s revenue agent’s
conclusions in analyzing petitioners’ bank deposits. On its
face, respondent’s calculations seem reasonable. But see our
notes to table 2. Petitioners contend that the bank deposits
method “is not appropriate for use in the Petitioners’ case”, and
also “that the alleged excess bank deposits are from sources
representing traditional inter-family [intra-family?] and friend
transfers.”
Petitioners assert as follows:
According to a review of the various court cases involving
the bank deposit method, it is clear that the bank deposit
method is most prevalently used to determine “unreported
income” of professionals, shopkeepers, and others whose
income arise largely from receipts of a business.
Petitioners stress that they “were never self-employed during tax
years 1991, 1992 and 1993;” and that they “did not operate a
business during tax years 1991-1993, nor were they ever in the
business of being ‘gamblers.’”
Firstly, we are not aware of any doctrine that the
Commissioner may appropriately use the bank deposits method to
reconstruct income only where the taxpayer is operating a
business, nor do petitioners suggest any reason why there should
be such a doctrine.
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