Jack A. and Nancy R. Haigh - Page 5

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          deductions are a matter of legislative grace, and the taxpayer              
          bears the burden of proving that he or she is entitled to any               
          deduction claimed.  Rule 142(a); INDOPCO, Inc. v. Commissioner,             
          503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292              
          U.S. 435, 440 (1934); Welch v. Helvering, supra.  Section 6001              
          requires the taxpayer to keep records sufficient to show whether            
          or not the person is liable for tax.  Where a taxpayer fails to             
          produce any records to substantiate his or her deductions,                  
          disallowance of the claimed deductions is proper.  Williams v.              
          Commissioner, T.C. Memo. 1986-195.                                          
               According to petitioner, the farming activity was a cash               
          operation.  He testified that suppliers and laborers demanded to            
          be paid in cash.  He claims that he was paid in cash for the sale           
          of crops and paid many, if not most, of the expenses claimed on             
          the Schedules F in cash.  Petitioner did not maintain a checking            
          account for the farming activity.  Although petitioner had a                
          personal account, he claims that he never deposited any of the              
          cash income he received from the farm into his personal account,            
          but rather used the cash to pay the farming expenses he allegedly           
          incurred.  Petitioner produced absolutely no records to support             
          any claimed deductions.  Petitioner testified that he kept                  
          records of his farming expenditures but that such records were              
          now in the possession of his accountant.  Petitioner presented no           
          bills, receipts, canceled checks, or other records to verify any            
          of his farming expenditures.  Petitioner's testimony with respect           




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