- 16 -
or testimony to support an alleged discount. We note, however,
that even if they did, the agent’s determination of annual gross
revenue was, by her own admission, consciously and conservatively
drawn low by omitting income such as the subscription revenue so
as to negate any claim that the determined revenue was
overestimated.8 Given the additional fact that the burden of
demonstrating any unfairness or inadequacy in a method used to
reconstruct income is upon the taxpayer, e.g., Woodall v.
Commissioner, 964 F.2d 361, 364 (5th Cir. 1992), affg. T.C. Memo.
1991-15, and that petitioners have to our minds failed to carry
this burden, we sustain respondent’s determination as to this
issue. In so doing, we are mindful of Webb v. Commissioner,
394 F.2d 366, 373 (5th Cir. 1968), affg. T.C. Memo. 1966-81,
wherein the court stated:
We recognize that the absence of adequate tax
records does not give the Commissioner carte blanche
for imposing Draconian absolutes. But such absence
does weaken any critique of the Commissioner's
methodology.
Arithmetic precision was originally and
exclusively in * * * [the taxpayer’s] hands, and he had
a statutory duty to provide it. He did not have to add
or subtract; rather, he had simply to keep papers and
data for others to mathematicize. Having defaulted in
his duty, he cannot frustrate the Commissioner’s
reasonable attempts by compelling investigation and
recomputation under every means of income
determination. Nor should he be overly chagrined at
8 The agent was also mindful that her calculation of gross
revenue did not take into account any revenue that petitioner may
have received from the magazine.
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