Hurley v. Commissioner
United States Tax Court
1. Held, under the facts, respondent was justified in computing net income by the net worth method. 2. The net worth statement for 1947 showed an increase in net income of about 50 per cent of the amount of gross income stated in the return.
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1. Held, under the facts, respondent was justified in computing net income by the net worth method. 2. The net worth statement for 1947 showed an increase in net income of about 50 per cent of the amount of gross income stated in the return. Held, that the statement, showing only assets and liabilities at the beginning and close of the year, is not, under the facts of the case, sufficient to prove an omission from gross income of an amount in excess of 25 per cent of the amount stated in the return. 3. Negligence penalty not shown to have been improperly imposed.
1Opinion of the Court
OPINION.
Johnson, Judge:
Petitioner concedes on brief that if books of account do not adequately reflect income, the respondent may avail himself of the net worth method, the one used by him here, to determine net income. Discussion of the point by petitioner on brief infers that the respondent was under a duty to reconstruct the books in his audit of the returns, regardless of the time it would take and the difficulty of the task. Liability for income tax is a matter of self-assessment by the filing of a return. To facilitate an examination of the return to test its accuracy, the statute…
2Cases cited3 opinions
- Switzer v. CommissionerUnited States Tax Court · 1953
- Green v. CommissionerUnited States Tax Court · 1946
- Talley v. CommissionerUnited States Tax Court · 1953
3Cited by55 opinions
- Stratton v. CommissionerUnited States Tax Court · 1970
- Courtney v. CommissionerUnited States Tax Court · 1957
- Estate of Cury v. CommissionerUnited States Tax Court · 1954
- Leas v. CommissionerUnited States Tax Court · 1955
- Harlan v. Comm'rUnited States Tax Court · 2001
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