- 283 -
or made a cursory review of the prepared returns. Metra Chem
Corp. v. Commissioner, supra at 662. Here petitioners have
failed to establish that the information provided to their
accountants and return preparers was complete or accurate.
Petitioners failed to maintain adequate books and records,
and substantially overstated expenses and deductions for a number
of items on their tax returns. These expenses and deductions
include travel and entertainment expenses, depreciation, office
expenses, legal fees, consulting fees, management fees, farm
losses, partnership losses, subchapter S corporation losses,
interest expense, rent expense, and omitted income. Their
failure to keep adequate records, coupled with the omission of
income and overstatement of expenses, shows negligence or
intentional disregard of rules or regulations.
Petitioner substantially overstated his deductions for
travel and entertainment expenses for each of the years 1977
through 1981. He estimated amounts for such expenditures and
claimed high cash expenses that are not reflected in CTC's books
and records. For each of the years 1977 through 1981 the
deductions claimed for travel and entertainment expenses
substantially exceed the amounts recorded in CTC's cash
disbursements journals and the cash expenditures recorded in his
diaries. Petitioner has been unable to substantiate the
expenses. The failure to adequately document expenses for travel
Page: Previous 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 NextLast modified: May 25, 2011