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Respondent used the bank deposits method to identify two
sources of unreported income. The first source was determined
from checks written from the corporate bank accounts of
petitioners’ business entities and deposited into petitioners’
personal bank accounts. The second source was determined from
deposits of unexplained amounts of cash and checks from sources
other than petitioners’ business entities or those reported on
petitioners’ income tax returns into petitioners’ personal bank
accounts. Respondent submitted into evidence copies of the bank
records that disclosed all of the deposits to as well as the
disbursements from petitioners’ personal bank accounts during the
years in issue. Respondent analyzed these bank records and
prepared schedules that summarized the deposits to, disbursements
from, and other transactions occurring in petitioners’ personal
bank accounts during those years. Respondent identified deposits
that were not taxable or that were previously reported by
petitioners. Consequently, respondent has properly reconstructed
petitioners’ income under the bank deposits method for the years
in issue.
If the taxpayer contends that the Commissioner’s use of the
bank deposits method is unfair or inaccurate, the burden is on
the taxpayer to show such unfairness or inaccuracy. Price v.
United States, supra at 677. Petitioners must show either that
respondent’s computation of their income is inaccurate or that
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