Does the net worth method apply to determine whether a taxpayer's net worth was properly calculated when they deposited unrecorded income into Swiss bank accounts?
MultiRegion, United States of America
The following excerpt is from U.S. v. Stonehill, 702 F.2d 1288 (9th Cir. 1983):
The taxpayers contend that the use of the net worth method was improper. The net worth method is acceptable only if the taxpayers' records do not accurately reflect income. Holland v. United States, 348 U.S. 121, 125, 75 S.Ct. 127, 130, 99 L.Ed. 150 (1954). Here, taxpayers caused millions of unrecorded dollars to be deposited in Swiss bank accounts. Any contention that the taxpayer's records accurately reflected income is frivolous. Use of the net worth method here was proper.
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