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In establishing a taxpayer’s net worth the Commissioner owes
a duty to the taxpayer of approaching the problem fairly and open
mindedly. Holland v. United States, supra; Banks v.
Commissioner, 322 F.2d 530 (8th Cir. 1963), affg. in part and
remanding in part T.C. Memo. 1961-237; Gunn v. Commissioner, 247
F.2d 359 (8 Cir. 1957), affg. in part and revg. in part T.C.
Memo. 1956-24. The use of the net worth method requires “the
exercise of great care and restraint” to prevent a taxpayer from
being “ensnared in a system” that is difficult for the taxpayer
to refute. Holland v. United States, supra at 129.
The taxpayer’s opening net worth is of critical importance
and must be established with reasonable certainty. “The
importance of accuracy in this figure is immediately apparent, as
the correctness of the result depends entirely upon the inclusion
in this sum of all assets on hand at the outset.” Id. at 132.
Once the Commissioner’s determination is established with
reasonable certainty, the taxpayer bears the burden of disproving
it. Welch v. Helvering, 290 U.S. 111 (1933); Banks v.
Commissioner, supra; Schroeder v. Commissioner, 291 F.2d 649 (8th
Cir. 1961), affg. T.C. Memo. 1957-162.
Petitioners assert that respondent’s computations of their
unreported income under respondent’s net worth method are
inaccurate because the computations fail to properly account for
certain specific items. Respondent concedes some of the items
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