- 5 -
Autos Oti-Juarez were produced by petitioner to substantiate the
claimed cost of goods sold or expenses. Petitioner claims that
the records were never returned to him by Bencomo after the
Mexican tax returns were prepared. Petitioner did not call
Bencomo at trial and did not explain his failure to do so.
Whatever the reason for the absence of records, however,
petitioner is not relieved of his burden of proof. See
Malinowski v. Commissioner, 71 T.C. 1120, 1125 (1979).
Petitioner's claim that he lost money on rapidly increasing sales
is not persuasive.
Petitioner has failed to offer credible evidence from which
we could make an approximation of Autos Oti-Juarez’s cost of
goods sold. He did testify, however, that some detailing work on
cars sold in Mexico was required after the cars were purchased.
Some expenses of this nature undoubtedly were incurred. We
estimate these expenses as $400 for 1990, $1,100 for 1991, and
$2,500 for 1992.
Respondent also determined that petitioners are liable for
the section 6651(a)(1) addition to tax for 1990 and 1992.
Section 6651(a)(1) imposes an addition to tax for failure to file
timely a return, unless the taxpayer establishes that the failure
did not result from “willful neglect” and that the failure was
due to “reasonable cause”. The addition to tax equals 5 percent
of the tax required to be shown on the return for the first
month, with an additional 5 percent for each additional month or
Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011