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attorney with an active law practice. On the Schedule C attached
to petitioner’s 1993 Form 1040, petitioner reported gross
receipts of $55,442 from her law practice. Petitioner's law
practice is an income-generating activity. Additionally, the
record clearly links petitioner to the receipt of funds.
Petitioner deposited amounts totaling $107,883.48 in her general
business account during 1993. Petitioner does not dispute
receiving these funds. Accordingly, respondent’s reconstruction
of petitioner’s income, to the extent it reveals unreported
income, is supported by the requisite factual predicate for
placing the burden to show otherwise upon petitioner.
Respondent reconstructed petitioner's 1993 income using the
bank deposits method. The use of the bank deposits method for
computing unreported income has long been sanctioned by the
courts. Clayton v. Commissioner, 102 T.C. 632, 645 (1994); DiLeo
v. Commissioner, 96 T.C. 858, 867 (1991), affd. 959 F.2d 16 (2d
Cir. 1992). Underlying this method is the principle that bank
deposits constitute prima facie evidence of income. Clayton v.
Commissioner, supra at 645; DiLeo v. Commissioner, supra at 868;
Tokarski v. Commissioner, 87 T.C. 74, 77 (1986).
A bank deposits analysis must generally encompass a totaling
of bank deposits, an elimination from such total of any amounts
derived from duplicative transfers or nontaxable sources of which
the Commissioner has knowledge, and a further reduction of the
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