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Commissioner, T.C. Memo. 1996-553; Becker v. Commissioner, T.C.
Memo. 1995-177.
Respondent is sustained on this issue.
Schedule C--Gross Receipts
Mr. Ngo reported gross receipts for 1995, 1996, and 1997, of
$106,989, $106,755, and $73,928, respectively. Respondent used
the bank deposits method to determine that the correct amounts of
gross receipts are $114,264, $128,176, and $79,337, respectively.
Gross income includes all income from whatever source
derived. See sec. 61(a). Section 61(a)(2) specifically includes
income derived from business. It is required under Federal law
that taxpayers maintain adequate and accurate tax records. See
sec. 6001; see also Jones v. Commissioner, 903 F.2d 1301, 1303
(10th Cir. 1990), affg. in part and revg. in part and remanding
T.C. Memo. 1988-373. It is well settled that the Commissioner is
entitled to use any reasonable methods of determining a
taxpayer’s income where the taxpayer either has inadequate
records or does not make his books and records available for
audit. See Holland v. United States, 348 U.S. 121, 130-132
(1954); Gordon v. Commissioner, 63 T.C. 51, 78 (1974),
supplemented by 63 T.C. 501 (1975), affd. in part and revd. in
part 572 F.2d 193 (9th Cir. 1977); Giddio v. Commissioner, 54
T.C. 1530, 1533 (1970).
The use of the bank deposits method for computing income has
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