-364-
Opinion of this Court; Hague Estate v. Commissioner, 132 F.2d 775
(2d Cir. 1943), affg. 45 B.T.A. 104 (1941).
Taxpayers generally bear the burden of proving that the
Commissioner’s determinations are erroneous; and in the case of a
bank deposits analysis, a taxpayer normally must show the
deposits came from a nontaxable source. Rule 142(a); Welch v.
Helverinq, 290 U.S. 111 (1933).
B. The Parties’ Arguments
Kanter contends respondent’s reconstruction of his income
for 1982 under the bank deposits method is arbitrary and
excessive. Kanter asserts (1) he maintained adequate records
(i.e., his check register) identifying the taxable and nontaxable
deposits to his bank accounts, and (2) respondent’s determination
should not be accorded its normal presumption of correctness.
With regard to the latter point, Kanter maintains respondent
should bear the burden of proof on this issue or respondent
should have the burden of going forward with the evidence.
Kanter further asserts the credible evidence of record (which
includes his check register and Gallenberger’s spreadsheets and
testimony) is sufficient to prove the deposits in question were
either proceeds of loans or return of investment funds.
Respondent contends Kanter has not satisfied his burden of
proof under Rule 142(a). Respondent argues the testimony and
other evidence petitioners offered should be disregarded as self-
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