Martin and Barbara Schachter - Page 15

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          such expenses.  Pebley v. Commissioner, T.C. Memo. 1981-701,                
          affd. without published opinion 703 F.2d 576 (9th Cir. 1983).               
          Even if petitioners were to conform the pleadings to the proof,             
          the evidence introduced by petitioners at trial regarding alleged           
          additional business expenses was so unsubstantial that such a               
          motion, if made, would be denied.  Goldsmith v. Commissioner, 31            
          T.C. 56, 63-64 (1958).                                                      
               In any event, with exception of two items that the parties             
          have agreed to, we reject the evidence regarding claimed                    
          additional business expenses of Cal Ben.1  Petitioner’s self-               
          serving testimony that Cal Ben's payments from unreported sales             
          deposited into the Lloyds/Sanwa account were used for additional            
          off-the-book partnership expenses was not credible.  Copies of              
          checks drawn on the Lloyds/Sanwa account indicate that much of              
          the sales receipts deposited into the Lloyds/Sanwa account was              
          used to make personal investments and to pay personal expenses.             
          Other checks were merely made payable to petitioner Barbara                 
          Schachter or to David Karp personally.  The names of the payees             
          on many of the checks are illegible.                                        
               Petitioners did not call as trial witnesses any of the                 
          individual payees whose names on the checks are legible to                  
          testify as to the purposes of the payments, nor did petitioners             


          1    At trial, respondent did allow petitioner additional                   
          deductible business expenses for consulting payments of                     
          $19,502.59 and for truck depreciation.                                      




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