Marcel Toto Ngosso - Page 10

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          and (B) to substantiate items, maintain required records, and               
          fully cooperate with respondent’s reasonable requests.                      
          Therefore, the burden of proof remains with petitioner.  Further,           
          based on our findings and conclusion, the burden of proof does              
          not play a role with respect to the accuracy-related penalty                
          under section 6662.                                                         
               Respondent utilized the bank deposits method to reconstruct            
          petitioner’s income because petitioner did not present any books            
          and records reflecting the income reported on his return.  We               
          accept petitioner’s and the witnesses’ generalized testimony that           
          petitioner engaged in some currency exchange transactions, and              
          that a certain amount of the bank deposits is not income to                 
          petitioner.  However, the documents and testimony are not                   
          necessarily consistent with the amounts reported on the return,             
          and petitioner did not explain the flow of cash into and out of             
          his bank accounts.  Petitioner acknowledged at trial that he                
          failed to retain records of the currency exchange transactions.             
          As indicated above, respondent took into account $21,726 of                 
          income tax refund checks issued to third parties and cashed by              
          petitioner on their behalf, and $39,445 of currency exchange                
          transactions with Mr. Emmanuel as nontaxable sources of income.             
               Under these facts, we conclude that respondent’s                       
          reconstruction of petitioner’s income was reasonable.  We are               

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