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references are to the Tax Court Rules of Practice and Procedure.
The issues for decision are whether petitioners are entitled to
deduct expenses claimed on Schedules A, C, and E of their
Forms 1040 for the years in issue and whether they are liable for
the penalties determined by respondent.
FINDINGS OF FACT
Petitioners resided in Hawaii at the time that they filed
their petition.
During 1992 and 1993, petitioners maintained journals of
their expenditures by cash and by check, including but not
limited to expenditures for meals at restaurants, for groceries,
for items at department stores and at drugstores, for
unidentified supplies, and for medical expenses. The recorded
expenditures were transferred to a monthly summary. On the
monthly summary, the majority of the expenditures, including auto
expense, electricity, entertainment, laundry ($60 per month),
rent, supplies, telephone, and water, were claimed to be
“deductible”. The monthly allocations recorded for 1992 and 1993
were as follows:
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