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The issues for decision are: (1) Whether petitioners
underreported gross income in the amount of $4,398; (2) whether
petitioners are entitled to deduct $38,271 for expenses, which
they claimed on Schedule C, for a business known as the
Registry;2 (3) whether petitioners are entitled to deduct $8,951
for expenses, which they claimed on Schedule C, for a business
known as Express Network Technologies (ENT); and (4) whether
petitioners are liable for the addition to tax pursuant to
section 6651(a)(1).3
Some of the facts have been stipulated and are so found.
The stipulation of facts and attached exhibits are incorporated
herein by this reference. At the time the petition was filed,
petitioners resided in Scottsdale, Arizona. During the year in
issue, petitioners were married, and they filed a joint return
for that year.
For convenience, we will combine our findings of fact and
opinion with respect to each of the issues presented.
Respondent's determination is presumed correct, and petitioners
1(...continued)
all Rule references are to the Tax Court Rules of Practice and
Procedure.
2Respondent's notice of deficiency disallowed $43,820.
Respondent concedes that $5,549 in claimed education expenses was
erroneously disallowed twice.
3Respondent also determined that petitioners had overstated
their income by the amount of $16,830 on their Schedule C for a
business known as Fiduciary Administrative Services Trust (FAST).
Petitioners do not contest this adjustment.
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Last modified: May 25, 2011