- 17 -
Commissioner, 92 T.C. 661, 687 (1989); Meneguzzo v. Commissioner,
43 T.C. 824, 831 (1965); see Taglianetti v. United States, 398
F.2d 558, 562 (1st Cir. 1968), affd. on other grounds 394 U.S.
316 (1969); Ramsey v. Commissioner, T.C. Memo. 1980-59; Bolton v.
Commissioner, T.C. Memo. 1975-373. The reconstruction of a
taxpayer’s income need only be reasonable in light of all
surrounding facts and circumstances. Giddio v. Commissioner, 54
T.C. 1530, 1533 (1970); Schroeder v. Commissioner, 40 T.C. 30, 33
(1963).
To reconstruct petitioners’ gross income, respondent
utilized the bank deposits method. The bank deposits method of
income reconstruction has long been sanctioned by the courts.
Clayton v. Commissioner, 102 T.C. 632, 645 (1994); Estate of
Mason v. Commissioner, 64 T.C. 651, 656 (1975), affd. 566 F.2d 2
(6th Cir. 1977); Bolton v. Commissioner, supra.
Bank deposits constitute prima facie evidence of income.19
Tokarski v. Commissioner, 87 T.C. 74, 77 (1986). This method of
determining a taxpayer’s income assumes that all the money
deposited into a taxpayer’s bank accounts during a specific
period constitutes taxable income. Price v. United States, 335
F.2d 671, 677 (5th Cir. 1964). Of course, “the Government must
19“If the taxpayer feels that the Government’s method of
computation is unfair or inaccurate, the burden is on him to show
such unfairness or inaccuracy.” DiLeo v. Commissioner, 96 T.C.
858, 871 (1991), affd. 959 F.2d 16 (2d Cir. 1992).
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