Zabetti A. Pappas - Page 26

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          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 that             

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