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Respondent’s net worth computations of petitioners’
unreported income were not made on the basis of a “strong
underlying element of guesswork”. Polizzi v. Commissioner, 265
F.2d 498, 502 (6th Cir. 1959), affg. in part and revg. in part
T.C. Memo. 1957-159. The errors in respondent’s net worth
computations of unreported income are more akin to the errors in
the Commissioner’s net worth computation of the husband’s 1990
understatement in Livingston. In Livingston, we reduced the
Commissioner’s computation of the husband’s 1990 understatement
by $65,000 attributable to a business owned by the husband’s
mother and by the $7,523 in settlement proceeds that the
taxpayers received as a result of an automobile accident. Those
errors, like the errors in this case, did not render the 1990 net
worth computation so unreliable as to negate any presumption of
correctness.
We have considered all of petitioners’ arguments, and to the
extent not specifically addressed, we find them unpersuasive.
II. Issues 4 and 5--Fraud Penalties and/or Additions to Tax
Respondent determined that petitioners are liable for the
additions to tax for fraud under section 6653(b) for 1988 and
that Mr. Del Bosque is liable for the fraud penalty under section
6663 for 1989.9
9Petitioners concede that their convictions of criminal tax
evasion for 1987 under sec. 7201 collaterally estop them from
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