- 9 -
1981), affg. per curiam T.C. Memo. 1979-3. Indeed, even
statistical surveys have been held to be an appropriate method of
computing tip income. See, e.g., Ross v. Commissioner, supra;
cf. sec. 7491(b).
Fourth, the Commissioner’s method of recomputing income
carries with it a presumption of correctness, and the taxpayer
bears the burden of proving it wrong.7 INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering, 290
U.S. 111, 115 (1933).
If petitioner maintained contemporaneous records of his tip
income for 2002, he did not offer such records at trial. Rather,
petitioner challenges only respondent’s methodology in
reconstructing the amount of his tip income.
Petitioner’s principal challenge focuses on the amount of
his net sales. In this regard, the parties agree that sales
should properly be net of sales tax, and the parties assume that
the figures furnished by the Las Vegas Hilton are so. Petitioner
contends that sales should also be net of the $2 per person
service charge that was levied for the benefit of the hotel and
7 Although sec. 7491(a) may serve to shift the burden of
proof to the Commissioner, that section has no application to the
present case in view of the fact that: (1) Petitioner has not
asserted its applicability; (2) petitioner has failed to
demonstrate that he maintained the requisite books and records,
see sec. 7491(a)(2); and (3) petitioner failed to introduce
credible evidence sufficient to establish a prima facie case, see
sec. 7491(a)(1).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011