- 26 - that business, the evidence to the contrary provided by her clientele is overwhelming. That evidence nonetheless falls short of providing us with a firm basis upon which to calculate her income from those activities. Perhaps unsurprisingly, few of the witnesses have been entirely forthcoming, leaving us with an unsatisfactory record. Respondent has used the specific item method of reconstructing petitioner’s income for 1989 and 1990. This method depends upon proof of specific items of income that were omitted from the taxpayer’s return. In Estate of Beck v. Commissioner, 56 T.C. 297, 353 (1971), the Court stated: “the ‘specific item’ method of proof * * * simply consists of evidence of particular or specific amounts of taxable income received by the taxpayer during a particular tax period, with evidence that the taxpayer did not include such amounts in his tax return”. See also United States v. Merrick, 464 F.2d 1087, 1092 (10th Cir. 1972). In most instances, petitioner has presented evidence disputing the specific amounts or taxability of the items in question. We have used our best judgment on the basis of the record before us to arrive at the amounts of income involved. Respondent determined that petitioner had unreported escort income of $3,600 in 1989 and $3,600 in 1990 from an individual named Dennis T. Dennis T. testified, however, that he had only legitimate business dealings with petitioner. He conceded thatPage: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Next
Last modified: May 25, 2011