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petitioners’ personal tax returns and whether petitioners could
change their method of accounting without permission.
Mr. Mitchell testified at trial. Mrs. Mitchell failed to
appear, and no witnesses corroborated Mr. Mitchell’s assertions
concerning his alleged farm activity. Although a few receipts
were produced, the purpose of the expenditures is not apparent
from the face of the receipts and was not specifically or
adequately explained by Mr. Mitchell. His testimony consisted
almost exclusively of attacking respondent’s agents and arguing
that he was engaged in farm activity. Mr. Mitchell stated that
“we feel that the fact that we live there, that we care for the
farm every day is substantiation enough.” His uncorroborated
testimony was vague and conclusory and, particularly in view of
the belatedness of the claims, is not persuasive.
Petitioners have not proven that they have any depreciable
basis in any equipment. Respondent suspects that petitioners are
now claiming depreciation deductions on the same equipment for
which lease payments were previously deducted. The only
references in the record pertaining to business equipment relate
to lease/purchase agreements, and respondent’s suspicion that
petitioners have already deducted the lease payments on the same
equipment is not, as petitioners’ contend, “a ludicrous
statement”. Although Mr. Mitchell denies that the equipment
depreciated is the same as that for which deductions were already
taken, he has not presented any evidence substantiating either
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Last modified: May 25, 2011