Omnitec Corporation, An Administratively Dissolved Corporation, Leland V. Lammert, President - Page 10

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         to support a finding that any part of the activity in question               
         was that of L.V. Properties, Inc., or that Omnitec Nevada was                
         engaged in any business activity.  The Court, therefore, sustains            
         respondent’s determination that the trade or business activity               
         was that of petitioner Omnitec Missouri.                                     
              The second issue is whether respondent properly determined              
         the income of petitioner, Omnitec Missouri, using the bank                   
         deposits analysis method, the results of which are outlined                  
         above.                                                                       
              The bank deposits analysis method is an accepted method of              
         income determination where books and records are either not                  
         maintained by a taxpayer, or where the taxpayer refuses to                   
         produce books and records.                                                   
              Taxpayers are required under section 6001 to keep such                  
         records as may be required to sufficiently establish gross                   
         income.  Anson v. Commissioner, 328 F.2d 703, 705 (10th Cir.                 
         1964), affg. Bassett v. Commissioner, T.C. Memo. 1963-10.  If a              
         taxpayer either fails to keep the required records, or if the                
         records do not clearly reflect income, the Commissioner is                   
         authorized under section 446(b) to reconstruct income by a method            
         which clearly reflects income.  Anson v. Commissioner, supra;                
         Sutherland v. Commissioner, 32 T.C. 862 (1959).  The bank                    
         deposits method is an acceptable method of reconstructing income             
         and may be used to establish the correct amount of income.                   






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