Ajuba Gaylord - Page 6

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                                                     2000                                                       



              Schedule C                       Previously   Additional   Petitioner                             
              Deductions           Claimed       allowed     allowed      conceded      Disputed                

              Advertising          $284          $284           --           --            --                   
              Legal &                                                                                           
              professional         288           288            --           --            --                   
              Office                                                                                            
              expenses             6,701         4,500          --         $2,201          --                   
              Rent                 5,223           --           --         5,223           --                   
              Repairs and                                                                                    
              maintenance          215             --          $215          --            --                   
              Travel               987           741            --         246             --                   
              Meals &                                                                                           
              entertainment        2,357           --           --         1,243         $1,114                 
              Utilities            3,613         2,357          --         1,256           --                   
              Business                                                                                          
              meetings             685           390            --         295             --                   
              Business gifts       502             --           --         191           311                    
              Transportation       2,502           --           --         2,502           --                   
              Cellular-                                                                                         
              phone/pager          2,836         2,260          --         576             --                   
              Subscriptions        36            –-            36          –-            –-                     
              Total                26,229        10,820        251         13,733        1,425                  


                   Allowing for these concessions, therefore, the Schedule C                                    

             deductions that remain in dispute are those taken for:  (1)                                        

             Office expenses; (2) meals and entertainment expenses; (3)                                         

             utilities; (4) business meeting expenses; (5) business gifts; and                                  

             (6) use of the cellular phone.                                                                     

                                                   OPINION                                                      

                   At the outset, we note that it is petitioner who bears the                                   

             burden of proving that respondent’s determination of income tax                                    

             deficiencies is incorrect.  See Rule 142(a); Welch v. Helvering,                                   

             290 U.S. 111, 115 (1933).3                                                                         



                   3 Sec. 7491 does not apply in this case to shift the burden                                  
             of proof to respondent because petitioner neither alleged that                                     
             sec. 7491 was applicable nor established that she fully complied                                   
             with the requirements of sec. 7491(a)(2).                                                          




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