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(1963). The Commissioner has latitude in determining which
method of reconstruction to apply when taxpayers fail to maintain
adequate records. See Petzoldt v. Commissioner, 92 T.C. 661, 693
(1989). Once the Commissioner has reconstructed a taxpayer's
income, the burden is on the taxpayer to demonstrate that the
Commissioner's determination is excessive. See Mallette Bros.
Constr. Co. v. United States, supra; Giddio v. Commissioner,
supra at 1534.
The records maintained by petitioners are insufficient to
permit an accurate computation of their income tax liability for
the years in issue. Respondent reconstructed petitioners' income
using the bank deposits method. 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);
Nicholas v. Commissioner, 70 T.C. 1057, 1065 (1978); Estate of
Mason v. Commissioner, 64 T.C. 651, 656 (1975), affd. 566 F.2d 2
(6th Cir. 1977).
In a bank deposits reconstruction of the taxpayer’s income,
the Commissioner’s agents review and analyze the taxpayer’s bank
records for the years in issue. Bank deposits are prima facie
evidence of income. See Clayton v. Commissioner, 102 T.C. 632,
645 (1994). Absent some explanation, a taxpayer’s bank deposits
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