- 12 -
Petitioners have failed to offer any evidence to suggest
that they acted with reasonable cause and good faith with respect
to their reporting of the purported cost of goods sold.
Petitioner contends that he employed a full time assistant for
the purpose of keeping records of his various business
activities. Petitioner testified that he requested that his
assistant keep records of every deal with Lee, but later
discovered that the records had been discarded. Petitioners
contend that “While petitioner was unable to produce any of the
records that were to be kept by his assistant through no fault of
his own, his record keeping attempts in this regard were not
unreasonable.” We disagree. Petitioners have failed to show
that they exercised ordinary care and business prudence in
keeping records necessary to comply with the tax laws.
Petitioner’s uncorroborated, self-serving testimony simply fails
to convince us that his record keeping attempts were reasonable,
and his attempt to shift the blame to his assistant is equally
unconvincing. Either petitioners were not engaged in the
computer chip sales business, in which case they had no basis for
claiming cost of goods sold, or they utterly failed to maintain
any records to support the computer chip sales business and the
costs incurred in it. To the extent that records do exist, they
do not support petitioner’s claim that he was in the computer
chip sales business or that he had cost of goods sold.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011