- 18 - Respondent had interviewed a third-party former employee of PCCL. This interview provided respondent with information that PCCL was "fixing its books". In addition, respondent had received documentation from Paige, which was supported by the interview with the employee. In Simpson Fin. Servs., Inc. v. Commissioner, T.C. Memo. 1996-317, the Commissioner disallowed a portion of the taxpayer's claimed expenses because of lack of substantiation. Documentation was eventually provided to the Commissioner's appeals officer, and subsequently to District Counsel. Based on the documentation provided to the Commissioner, the parties settled all issues raised in the notice of deficiency. We denied the taxpayer's request for an award of attorney's fees. Specifically, we said: In the notices of deficiency, respondent premised the adjustments primarily on petitioners' failure to substantiate items on their returns. Deductions are a matter of legislative grace, and petitioners bore the burden of establishing their entitlement thereto. * * * In addition, section 6001 imposed on petitioners an affirmative duty to maintain books and records sufficient to establish items reported on their returns. It was reasonable for respondent not to concede the adjustments until she had received and verified adequate substantiation for the items in question. Harrison v. Commissioner, 854 F.2d 263, 265 (7th Cir. 1988), affg. T.C. Memo. 1987-52; Sokol v. Commissioner, 92 T.C. 760, 765 (1989). [Citation omitted.]Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011