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documents in his possession or under his control. We are aware
of no such privilege. See Barmes v. Commissioner, 89 AFTR 2d
2249, 2250, 2002-1 USTC par. 50,312 at 83,742 (7th Cir. 2002)
(taxpayer’s argument that trust information was confidential or
privileged held to be frivolous: “The Barmeses should count
themselves fortunate that the Commissioner did not ask for
additional sanctions in this court.”), affg. T.C. Memo. 2001-155;
SEC v. Bilzerian, 131 F. Supp. 2d 10, 16 n.8 (D.C. Cir. 2001)
(expressing serious doubts about validity of trustee’s
confidentiality claims).
Because petitioner did not maintain proper books of account
and wrongfully failed to produce records to substantiate his
return positions, respondent used an indirect method of
determining petitioner’s taxable income. We have repeatedly
upheld the use of an indirect method to determine taxable income
where the taxpayer fails to maintain or produce sufficient
records to establish the taxpayer’s proper tax liability. For
example, in Judy v. Commissioner, T.C. Memo. 1997-232, we stated:
Every taxpayer is required to maintain sufficient
records to enable the Commissioner to establish the
amount of his taxable income. Sec. 6001; sec.
1.6001-1(a) and (b), Income Tax Regs. If such records
are lacking, the Commissioner may reconstruct the
taxpayer's income by any indirect method that is
reasonable under the circumstances. Cebollero v.
Commissioner, 967 F.2d 986, 989 (4th Cir. 1992), affg.
T.C. Memo. 1990-618; Petzoldt v. Commissioner, 92 T.C.
661, 687 (1989); Schellenbarg v. Commissioner, 31 T.C.
1269, 1277 (1959), affd. in part and revd. and remanded
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