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Citing Livingston v. Commissioner, T.C. Memo. 2000-121,
petitioners contend that, as a result of the errors in
respondent’s computations, the computations are so unreliable as
to negate any presumption of correctness. Petitioners assert
that the facts in Livingston are “strikingly similar” to the
facts in these cases. We disagree.
In Livingston, we first found the 1989 opening net worth of
zero suspect given that the taxpayer was self-employed in that
year. Further, the Commissioner’s 1989 net worth computation did
not account for the wife’s income, which was available to fund
the taxpayers’ joint expenditures; the computation effectively
treated all asset purchases and other joint expenditures as being
financed solely by the husband’s unreported income. As a result
of those errors, we held that the Commissioner’s 1989 net worth
computation was so unreliable as to negate any presumption of
correctness.
The types of errors in the Commissioner’s 1989 net worth
computation in Livingston are not present in the case at hand.
Respondent’s net worth computations of unreported income reflect
the combined incomes of petitioners and their wives. The opening
and closing net worths include joint and separate property, and
respondent’s computations of unreported income take into account
the wives’ separate income.
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