- 12 - petitioner included the amounts paid to the production assistant in the $21,876 of income reported on Schedule C. Nor are we inclined to give petitioner the benefit of the doubt--much less consider that he has carried his burden of proof--that any part of the amount claimed was paid for services provided by sound engineers. Petitioner admitted that he usually paid for such services in cash because he was thereby able to obtain discounts from market rates charged by service providers who were moonlighting after hours from their regular jobs. We are sufficiently familiar with the operations of the underground economy to say that a taxpayer who makes payments in cash to facilitate income tax underreporting and unauthorized use of employer facilities by employee service providers does not thereby convince us, without documentation, that he has incurred and paid deductible expenses. With respect to the legal fee portion of petitioners' claim, petitioner failed to provide the Court with sufficient information to determine if the legal expenses claimed were related to the business or were personal in nature. Petitioner testified that the legal fees were partly for a bankruptcy that he had filed in the previous year and for the attorney to review "contracts". Respondent's determination on this issue is sustained in full.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011