- 20 - Eva's Claimed $20,678 NOL Re: Oil Production With petitioners' 1986 joint Federal income tax return, Eva filed a Schedule C claiming a net operating loss from oil production of $20,678. On audit, respondent disallowed this claimed loss on the grounds that no portion thereof had been substantiated. At trial, petitioners offered documentation in support of claimed oil production expenses that indicates that many of the purported expenses reflected on the Schedule C relate to the business of L & L Supply. Accordingly, the claimed expenses may already have been claimed by L & L Supply on the Schedule C relating to that separate business. Further, based on the referred-to documentation, $12,000 of the expenses giving rise to the claimed $20,678 loss from oil production appear to constitute a payment to G.R. Penn Production Co., a company controlled by petitioners' son, and $5,000 of the claimed expenses appear to represent not expenses, but rather receipts or income petitioners received from G.R. Penn Production Co. We disallow Eva’s claimed $20,678 net operating loss for 1986 relating to oil production. Additions To Tax Petitioners have offered no credible excuse for the late filing of their 1985 and 1986 joint Federal income tax returns.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011