Pennel Phlander Irwin - Page 9

                                                 - 9 -                                                    
            petitioner refused to provide records, invoking Fifth Amendment).                             
            For the foregoing reasons, we reject petitioner's assertions.                                 
                  Petitioner also contends that respondent, in the course of                              
            the examination, abridged petitioner's copyright interest in a                                
            1993 article entitled, "The Audit of '91".  Petitioner's                                      
            copyright infringement claims have no foundation.  Respondent is                              
            entitled to examine petitioner's literary works in order to                                   
            establish whether there was a connection between petitioner's                                 
            claimed business deductions and petitioner's business as a                                    
            writer.  Accordingly, we reject petitioner's arguments.                                       
                  2.  Schedule C Deductions                                                               
                  We now turn to the question of whether petitioner may                                   
            properly claim the deductions in question.  As explained supra,                               
            petitioner bears the burden of proving entitlement to any claimed                             
            deductions.  In this regard, taxpayers must keep sufficient                                   
            records to establish the amount of deductions or other matters                                
            required to be shown on the taxpayer's return.  Sec. 1.6001-1(a),                             
            Income Tax Regs.                                                                              
                  Section 162(a) generally allows a deduction for "ordinary                               
            and necessary" expenses incurred while carrying on a trade or                                 
            business.  Respondent does not appear to question that                                        
            petitioner's writing activities constitute a "trade or business".                             
            Respondent, however, argues that petitioner has failed to prove                               
            that the deductions claimed are "ordinary and necessary" expenses                             






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011