- 13 -
restatement of petitioners’ argument, previously considered and
rejected, that respondent was required to examine their 1994 and
1995 records before using the net worth method to reconstruct
their income. Petitioners do not identify exactly what items in
their 1994 and 1995 books and records might constitute a lead as
to potential nontaxable sources of income, and we have discovered
none.
2. The Private Expenditures “Lead”
On brief, petitioners contend that “the Government also
failed to make any investigation as to whether Petitioners 1994
and 1995 private expenditures exceeded available declared
resources.” It is not apparent how this contention is relevant
to establishing any potential nontaxable sources of income or
otherwise refuting the results of respondent’s net worth
analysis. Petitioners do not argue, for instance, that the
amounts of personal living expenses reflected in the net worth
analysis are incorrect. Rather, petitioners’ contention seems
directed more toward questioning respondent’s reasons for
undertaking a net worth analysis. Even if we were to assume, for
sake of argument, that petitioners’ “private expenditures” (by
which we understand petitioners to mean personal living expenses)
did not exceed their “available declared resources” (by which we
understand petitioners to mean the amounts of income they
reported on their tax returns), this circumstance would not tend
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011