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5. Taxes, Insurance, and Miscellaneous Expenses
Petitioners claimed deductions for various expenditures for
taxes and insurance. Respondent disallowed most of these
deductions. With respect to the taxes paid to the State,
deductions were allowed on Schedule A, except for the cost of a
fishing license that was disallowed. With regard to the payment
for insurance, respondent allowed a deduction for the business
casualty insurance and disallowed deductions claimed for life
insurance or other personal insurance. See sec. 264.
Petitioners have not established that they are entitled to
deductions in greater amounts than those allowed by respondent.
With regard to the balance of the disputed items, we have
reviewed the record and sustain respondent's determinations.
Deductions were claimed for petitioners' cats and dogs on the
respective grounds that they were necessary to control the mouse
populations and provide security at the shop. The animals, at
least for the most part, were located at the residence.
Deductions were also claimed for magazines such as People, Ladies
Home Journal, and Family Circle. Petitioners did not explain the
business purpose for these publications. These items speak for
themselves.
6. Section 6662(a) Penalty
Respondent determined that petitioners are liable for an
accuracy-related penalty under section 6662(a) for negligence.
Section 6662(a) provides that "there shall be added to the tax an
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