Bruce David Cohen - Page 11




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          any amounts derived from duplicative transfers or nontaxable                
          sources of which the Commissioner has knowledge; (3) the further            
          reduction of the adjusted total by any deductible or offsetting             
          expenditures of which the Commissioner is aware.  Clayton v.                
          Commissioner, supra at 645-646; DiLeo v. Commissioner, supra at             
          868.                                                                        
               As previously indicated, the burden here rests on petitioner           
          to show error in respondent’s analysis, either by proving a                 
          nontaxable source for deposits or by substantiating allowable               
          expenditures.  Rule 142(a); Clayton v. Commissioner, supra at               
          645; Estate of Mason v. Commissioner, 64 T.C. 651, 656-657                  
          (1975), affd. 566 F.2d 2 (6th Cir. 1977).  In some circumstances            
          (e.g., fraud cases), the Commissioner may be expected to                    
          investigate leads of nontaxable sources that are “reasonably                
          susceptible of being checked.”  Holland v. United States, 348               
          U.S. 121, 135-136 (1954); see also Tunnell v. Commissioner, 74              
          T.C. 44, 57-58 (1980), affd. 663 F.2d 527 (5th Cir. 1981).                  
          However, this “lead-check rule” has been held inapplicable where            
          the taxpayer bears the burden of proof or where purported leads             
          are vague and unsupported by any evidence.  Tunnell v.                      
          Commissioner, supra at 57-58.                                               
               During 1988, petitioner maintained a single business bank              
          account in the name of Bicycle Sport at the Dana Niguel Bank.  A            
          second business bank account was opened in the name of Bicycle              






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