This case has been cited 1 times or more.
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2014-11-24 |
DEL CASTILLO, J. |
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| In the case of income, for it to be taxable, there must be a gain realized or received by the taxpayer, which is not excluded by law or treaty from taxation.[71] The government is allowed to resort to all evidence or resources available to determine a taxpayer's income and to use methods to reconstruct his income.[72] A method commonly used by the government is the expenditure method, which is a method of reconstructing a taxpayer's income by deducting the aggregate yearly expenditures from the declared yearly income.[73] The theory of this method is that when the amount of the money that a taxpayer spends during a given year exceeds his reported or declared income and the source of such money is unexplained, it may be inferred that such expenditures represent unreported or undeclared income.[74] | |||||