Barry D. and Suzanne B. Whalley - Page 32

                                       - 32 -                                         
          surveillance business, represented computer fees paid to on-line            
          service providers for individual background check information,              
          including addresses, Social Security numbers, credit information,           
          and so on.  The checks submitted by petitioner at trial                     
          substantiate that such expenses were incurred, and they are                 
          consistent with his trial testimony.  Based on the record, we               
          find that these amounts were ordinary and necessary expenses                
          incurred by petitioner in carrying on his business under section            
          162.                                                                        
               I. Postage                                                             
               For 1991 and 1992, petitioner deducted postage in the                  
          amounts of $394 and $402, respectively.  Respondent completely              
          disallowed these expenses.                                                  
               In many instances, petitioner failed to show the business              
          purpose for the postage expense claimed.  For example, in 1991              
          petitioner purchased 600 stamps at 29 cents apiece; however, the            
          record is silent as to the use of the stamps in petitioner's                
          business.  In 1992, petitioner conceded that he posted the                  
          newsletter for the Rotary group.  However, petitioner has not               
          established that this newsletter postage is a business expense.             
          These examples are indicative of the entire record regarding this           
          matter.                                                                     
               Nevertheless, it is still reasonable to infer that                     
          petitioner incurred postage costs for TSI.  At trial, petitioner            
          submitted bills which we know he mailed out to clients.                     




Page:  Previous  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  Next

Last modified: May 25, 2011