Bedeian v. Commissioner
United States Tax Court
1. Held, respondent was justified in employing the net worth increase plus nondeductible expenditures method of income reconstruction to determine the deficiencies. 2. Held, further, for purposes of computing petitioner's net worth as of the end of each of the taxable years, (1) an automobile owned by petitioner and used by her only for personal purposes is included in assets at cost, unadjusted for any decrease in value, and (2) the amount of liability on a note does not…
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1. Held, respondent was justified in employing the net worth increase plus nondeductible expenditures method of income reconstruction to determine the deficiencies. 2. Held, further, for purposes of computing petitioner's net worth as of the end of each of the taxable years, (1) an automobile owned by petitioner and used by her only for personal purposes is included in assets at cost, unadjusted for any decrease in value, and (2) the amount of liability on a note does not include the portion of add-on obligations (i.e., discount and filing fee) remaining unpaid. 3. Held, further, on the…
1Opinion of the Court
OPINION
The first issue is whether respondent was justified in employing the net worth increase plus nondeductible expenditures method to reconstruct petitioner’s taxable income. We think he was. Since petitioner’s income included a percentage of the profits of the tavern, and she maintained no adequate personal records, respondent could look beyond the Form W-2 furnished by her employer. See Barry Mene guazo, 43 T.C. 824, 832 (1965). Her taxable income could be verified only by determining the amount of the tavern’s profits paid to her; yet its records were incomplete and inconsistent. See…
2Cases cited10 opinions
- Holland v. United StatesSupreme Court of the United States · 1955
- Meneguzzo v. CommissionerUnited States Tax Court · 1965
- George Schwarzkopf v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1957
- Morris Lipsitz, and Morris Lipsitz and Helen Lipsitz v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1955
- Etta Potson Bodoglau, Administratrix of the Estate of Michael Potson, Deceased v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1956
5 more not listed; retrieve them via the Exa API.
3Cited by8 opinions
- Eisenstein v. CommissionerUnited States Tax Court · 1987
- Bedeian v. CommissionerUnited States Tax Court · 1970
- Bonacci v. CommissionerUnited States Tax Court · 1989
- Bond v. CommissionerUnited States Tax Court · 1983
- Dimsdale v. CommissionerUnited States Tax Court · 1987
3 more not listed; retrieve them via the Exa API.