- 8 - through 1981, and respondent never audited petitioners' joint Federal income tax returns for 1982 through 1988, even though the carryforward deductions claimed on the amended 1978 through 1981 and 1982 through 1988 income tax returns were based on the same $1,517,999 1975-NOL that was the basis for the NOL carryforward deductions that were apparently claimed by the bankruptcy trustee on Federal income tax returns filed on behalf of petitioner's bankruptcy estate for 1976 through 1980. In 1993, respondent audited only petitioners' 1989, 1990, and 1991 joint Federal income tax returns, and on September 30, 1993, respondent issued a notice of deficiency disallowing the carryforward deductions of $104,700, $98,604, and $30,848, respectively, claimed on those three returns with regard to the 1975-NOL. Respondent's disallowance of the claimed 1975-NOL carryforward deductions was based on the argument that, under section 172 as applicable to 1975, the period for carrying forward the 1975-NOL expired on December 31, 1980. Respondent also disallowed the $7,414 in car and truck expenses claimed on petitioners’ 1989 joint Federal income tax return and determined the accuracy-related penalties. OPINION Deductions are a matter of legislative grace with respect to which taxpayers generally bear the burden of proof. Rule 142(a);Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011