Royce A. Ellis - Page 12

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          conclusive, bank deposits are prima facie evidence of income.               
          Boyett v. Commissioner, 204 F.2d 205 (5th Cir. 1953), affg. a               
          Memorandum Opinion of this Court; Hague Estate v. Commissioner,             
          132 F.2d 775 (2d Cir. 1943), affg. 45 B.T.A. 104 (1941); Tokarski           
          v. Commissioner, 87 T.C. 74, 77 (1986); Estate of Mason v.                  
          Commissioner, supra at 656-657.  Taxpayers generally bear the               
          burden of proving the Commissioner’s determinations are erroneous           
          and, in the case of a bank deposits analysis, must show the                 
          deposits came from a nontaxable source.  Rule 142(a); Welch v.              
          Helvering, 290 U.S. 111 (1933); Harper v. Commissioner, 54 T.C.             
          1121, 1129 (1970).                                                          
               In the years at issue, petitioner did not maintain                     
          contemporaneous books and records for Capital Builders.  The                
          foundation for the deficiencies was derived from JPI’s Forms                
          1099-MISC for petitioner’s years at issue and respondent’s bank             
          deposit analysis for the same periods.  Other than certain                  
          deposits conceded by respondent to be nontaxable, petitioner                
          failed to produce evidence to show that any other bank deposit in           
          1999 or 2000 was nontaxable income.  See Harper v. Commissioner,            
          supra at 1129.  The Court finds respondent’s use of the bank                
          deposits method to reconstruct petitioner’s taxable income was              
          neither arbitrary nor unreasonable.  See Estate of Mason v.                 
          Commissioner, supra at 656-657.  Therefore, the Court sustains              

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