- 42 -
alleged nontaxable source. DiLeo v. Commissioner, supra at 873-
874. In this case, there is no question of the origin of the
unreported income. The parties have also agreed that some
deposits were from nontaxable sources. Petitioner admits on
brief that he willfully omitted $78,454 and $75,587 of income
from his 1991 and 1992 returns. In his written guilty plea in
his criminal case, petitioner admitted that he willfully omitted
reportable income of $78,454 and $75,587 and that there was
additional tax due on this omitted income of $19,299 and $10,377
for 1991 and 1992, respectively. And, as previously explained,
there is clear and convincing evidence that he failed to report
additional amounts of income for each of the years at issue.
During the 3-year period at issue, more than $1.8 million
flowed through his bank accounts. Petitioner does not dispute
this, but instead argues that much of this money is nontaxable
reimbursements for moneys advanced to and/or expenses incurred
for the benefit of his various business activities. When bank
deposits make out a prima facie case of underreported income, the
taxpayer has the burden of proving additional expenses that he
did not claim on his returns. Morse v. Commissioner, T.C. Memo.
2003-332 (citing Siravo v. United States, 377 F.2d 469, 473-474
(1st Cir. 1967); Elwert v. United States, supra at 933). As
previously explained, petitioner has failed to do so.
Page: Previous 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 NextLast modified: May 25, 2011