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Based on information returns filed by third-party payers,
respondent determined that petitioner realized income from such
payers that was not included on petitioner's income tax return.
These payments totaled $5,700. In his petition and at trial,
petitioner conceded he had received the payments, and that such
payments were for plastering and stucco work he performed during
the first 8 months of the year 2000. However, in his petition
and at trial, petitioner contended that at least 50 percent of
the payments he received went toward materials used on the job,
an additional 25 percent went toward subcontracted labor, and,
beyond that, the remainder of the payments was offset by "pre-
owned capital losses and outstanding debts incurred". Thus,
petitioner's position is that he realized no net income from his
business activity during the year 2000.
At trial, petitioner presented no books and records to
substantiate his claimed expenses. He testified that he
maintained "fairly good records"; however, those records were
lost when he was evicted from his apartment. He made no effort
to reconstruct his records for trial of this case. Petitioner
contends he paid workers he employed in cash but never exacted
receipts from them. Although petitioner contended that he
maintained records of these cash payments, those records were
lost in the eviction proceeding. Petitioner gave no testimony
and presented no documentary evidence regarding the allegation
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Last modified: May 25, 2011