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naval shipyard. Petitioners assert nothing more than tax
protester rhetoric, which this and other courts have universally
rejected, to support their position that they are not subject to
Federal income tax. See In re Becraft, 885 F.2d 547, 549 (9th
Cir. 1989) (Federal tax laws apply to resident U.S. citizens);
Edwards v. Commissioner, 680 F.2d 1268 (9th Cir. 1982); United
States v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981)
(compensation for labor or services is subject to income tax);
McCoy v. Commissioner, 76 T.C. 1027, 1029-1030 (1981), affd. 696
F.2d 1234 (9th Cir. 1983); Jackson v. Commissioner, T.C. Memo.
1991-498, affd. without published opinion 990 F.2d 1258 (9th Cir.
1993). Petitioners are clearly not exempt from Federal income
tax or from the imposition of additions to tax.
B. Whether Petitioners May Deduct More Expenses Than
Respondent Allowed
Taxpayers may deduct ordinary and necessary expenses paid or
incurred during the taxable year to carry on a trade or business.
Sec. 162(a). A taxpayer must keep records that are sufficient
to substantiate the amounts the taxpayer deducted on his or her
return. Sec. 1.6001-1(a), Income Tax Regs.
1. Whether Advertising Expenses for the Living Trusts
Are Deductible
Petitioners deducted $156.97 on their 1991 return for
brochures they used to advertise living trusts.
Mr. Frank testified that the brochures cost $156.97, but
did not remember in what year the brochures were printed.
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