What is the test for determining whether a taxpayer improperly obtained income from a bank deposit account?
The following excerpt is from U.S. v. Helina, 549 F.2d 713 (9th Cir. 1977):
1 This method of proof requires the Government to show the net worth of the taxpayer as of the beginning and the end of the taxable year and the non-deductible expenditures made by him that year. If the increase in his net worth, plus his non-deductible expenditures, exceed his reported income for the year and such excess is not attributable to gifts, devises, loans or other non-taxable receipts, the conclusion may be drawn that the taxpayer realized income which he failed to report. Papadakis v. United States, 208 F.2d 945 (9th Cir. 1953); McFee v. United States, 206 F.2d 872 (9th Cir. 1953).
2 The bank deposit analysis has been described as follows:
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