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2. Reimbursements and Other Items
During 1986, Mrs. Bowden received $21,626.59 from PWIC and
AVC for auto expenses, entertainment, consulting, and other
unidentified items. Also, in the same year, petitioners’
corporations paid $14,138.48 on behalf of Mrs. Bowden to a travel
agency, Crocker National Bank, Pentech Financial Services, and
the San Bernardino County tax assessor. Petitioners’
corporations also made payments on loans still outstanding to
both the Bank of Whittier and NBSC, respectively. In 1986,
petitioners’ corporations paid $10,762.21 for Mr. Bowden’s life
insurance and credit card charges. In the same year, Mr. Bowden
received $399.56 from PWIC as reimbursement of entertainment
expenses.
In 1989, Mrs. Bowden received $16,942.89 from C.B. Crest
for postage expenses, rental income, and other unidentified
items. Petitioners’ corporations paid on behalf of Mrs. Bowden a
debt owed to Newport Vending in the amount of $44,250. Payments
were also made to the Bank of Whittier and NBSC on the loans
still outstanding. In 1989, petitioners’ corporations paid on
behalf of Mr. Bowden $8,407.42 for his credit card charges.
Generally, taxpayers are required to maintain adequate and
complete records to substantiate their expenses. Sec. 6001;
Meneguzzo v. Commissioner, 43 T.C. 824 (1965). Also, it is well
settled that if a taxpayer’s obligation is paid by a third party,
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