Thomas Lee Woodall - Page 7




                                        - 7 -                                         
          reconstruct petitioner’s gross receipts from his law practice.              
          This method of proof is well established.  DiLeo v. Commissioner,           
          supra at 867; Estate of Mason v. Commissioner, 64 T.C. 651, 656             
          (1975), affd. 566 F.2d 2 (6th Cir. 1977).  Bank deposits are                
          prima facie evidence of income.  Tokarski v. Commissioner, 87               
          T.C. 74, 77 (1986); Estate of Mason v. Commissioner, supra at               
          656-657.  When using the bank deposits method, the Commissioner             
          is not required to show that each deposit or part thereof                   
          constitutes income, Gemma v. Commissioner, 46 T.C. 821, 833                 
          (1966), or prove a likely source, Clayton v. Commissioner, 102              
          T.C. 632, 645 (1994); Estate of Mason v. Commissioner, supra at             
          657.  Unless the nontaxable nature of deposits is established,              
          gross income includes deposits to bank accounts where the                   
          taxpayer has dominion and control of the funds.  Commissioner v.            
          Glenshaw Glass Co., 348 U.S. 426, 431 (1955); Davis v. United               
          States, 226 F.2d 331, 334-335 (6th Cir. 1955); Manzoli v.                   
          Commissioner, T.C. Memo. 1988-299, affd. 904 F.2d 101 (1st Cir.             
          1990).  Respondent’s determination is presumed to be correct, and           
          petitioner bears the burden of proving otherwise.5  Rule 142(a).            
               A.   Manila Accounts                                                   
               Petitioner claims that Mr. Haynes was his client and that he           
          (petitioner) set up the Manila Accounts as an accommodation to              

               5  Sec. 7491 is inapplicable, as the audit in this case                
          started in 1994.  Higbee v. Commissioner, 116 T.C. 438, 440                 
          (2001).                                                                     





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011