Opinion ID: 391122
Heading Depth: 2
Heading Rank: 3

Heading: Bank Deposits Method

Text: 19 The Government argues that it relied on the bank deposits method of proof to show appellants' unreported income, using the net worth method only for corroboration. Noting that Holland concerned only the net worth method, the Government contends that reversal is thus not called for nor necessary in this case. We do not agree. 20 Although the net worth method may have been used for corroboration, the results of the net worth analysis were thoroughly presented to the jury by the Government's expert. We cannot speculate on the role which the Government's net worth analysis played in the minds of the jury, Beck v. United States, 298 F.2d 622, 631 (9th Cir. 1962), but it may have been substantial. If the jury had disbelieved the Government's net worth result, it may very well have cast doubt on the bank deposits result as well, inasmuch as both analyses yielded the same figures. But we need not rest our decision on our estimation of the role played by the net worth method, for we believe that explanatory instructions are similarly required when the bank deposits method of proof is used. 21 Like the net worth method of proof, the bank deposits method seeks to show by circumstantial means that the defendant had income which was not reported. 8 And like the net worth method, it asks the jury to infer that this excess income was from a taxable source. Although the mechanics of arriving at an income figure are different, both methods involve similar underlying assumptions and afford much the same inferences for and against the accused. Moreover, these assumptions and inferences are not self-evident, and the technicalities of the bank deposits method of proof are just as subtle as those of the net worth method. For the reasons detailed in Section II-A above, we conclude that comprehensive explanatory instructions must be given when the bank deposits method of proof is used, just as is required by Holland for the net worth method. Accord, Greenberg v. United States, 295 F.2d 903, 907 (1st Cir. 1961).