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that respondent apportioned one-half of these wages to each
petitioner to reflect the community property law of Texas and
that petitioners have made no objection to this apportionment.
As to the newspaper income, petitioners’ sole argument is
that respondent has neither connected them to the receipt of
income from the newspaper nor established the amount of any such
income. Petitioners assert primarily that respondent’s
determination of this unreported income was not the product of a
thorough and complete examination but rested on a naked
assessment. In this regard, petitioners observe, respondent’s
income calculation stemmed solely from one edition of the
newspaper, and respondent never attempted to verify his income
recalculation by using another method such as the net worth
method. Petitioners assert secondly that respondent never
investigated whether the calculated amount of advertising income
should have been reduced by virtue of, for example, the four
consecutive issue discount or a complimentary (free) placement.
On the basis of the facts herein, we are satisfied with
respondent’s reconstruction of petitioners’ unreported income
from the newspaper. Mr. Burnett was the sole proprietor and
publisher of the newspaper, which both on its face (the listing
of subscription, advertising, and classified rates) and on the
basis of history (the 1992 tax return), was easily seen to be an
income-producing activity. Because petitioners did not file
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