net worth method


net worth meth·​od
: a method used by the Internal Revenue Service to detect and calculate tax evasion in which the change in a taxpayer's net worth is compared to reported taxable income taking into account living expenses, allowable deductions and exemptions, and nontaxable income

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Cite this Entry

“Net worth method.” Legal Dictionary, Merriam-Webster, Accessed 28 May. 2024.

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