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Conclusion
On the basis of our discussion above, we conclude that
petitioner engaged in his Windmill Distillery activity without an
actual and honest objective of making a profit. In light of our
conclusion that taxpayer did not have sufficient profit motive to
satisfy the requirements of section 174, we also conclude he did
not meet the requirements of section 162 and may not deduct
amounts he claimed as ordinary and necessary business expenses in
connection with his Windmill Distillery activity.
Other Disallowed Deductions, Additions to Tax, and Penalties
Petitioner presented no evidence at trial and made no
arguments in his brief with respect to respondent's disallowance
of deductions for meal expenses, eyeglasses, and the attorney
licensing fees. Similarly, at trial and on brief, petitioner did
not address the 1988 addition to tax for negligence or the 1989
and 1990 accuracy-related negligence penalties. The burden of
proof is on petitioner to show that respondent's determinations
set forth in her notice of deficiency are incorrect. Rule
142(a); Welch v. Helvering, 290 U.S. at 115. Petitioner has not
met his burden with respect to these issues; accordingly we
affirm respondent's determinations.
Decision will be
entered for respondent.
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