Sam and Katherine Florella, Petitioners, v. Commissioner of Internal Revenue, Respondent, 361 F.2d 326 (5th Cir. 1966)

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US Court of Appeals for the Fifth Circuit - 361 F.2d 326 (5th Cir. 1966) May 17, 1966

William S. Pritchard, Winston B. McCall, Birmingham, Ala., for petitioners, Pritchard, McCall & Jones, John H. Harper, Birmingham, Ala., of counsel.

John B. Jones, Jr., Acting Asst. Atty. Gen., Lee A. Jackson, Atty., Dept. of Justice, Mitchell Rogovin, Chief Counsel, I.R.S., Eugene F. Colella, Atty., I.R.S., Donald W. Williamson, Jr., Meyer Rothwacks, Joseph M. Howard, Attys., Dept. of Justice, Richard M. Roberts, Acting Asst. Atty. Gen., Washington, D.C., for respondent.

Before TUTTLE, Chief Judge, BELL, Circuit Judge and KILKENNY,1  District Judge.


Sam Fiorella, a lottery operator, kept no books and records for income tax purposes. The Commissioner made deficiency assessments against him for the years 1956, 1957, and 1958 on the basis of reconstructing his income.

The Tax Court carefully considered these assessments and drastically reduced them by using a slightly lower daily gambling income average and by substantially lowering the number of days of operation. Still dissatisfied, Mr. and Mrs. Fiorella appealed. We are convinced that the method of reconstruction of income as approved by the Tax Court was proper from the standpoint of theory and substance. The facts on which the method operated are amply supported by the record, and these same facts are adequate to support the finding of fraud.



Of Portland, Oregon, sitting by designation