- 15 -
Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513 (10th
Cir. 1947). Moreover, having conceded that the manufacturing
equipment was repossessed in the summer of 1990, petitioners
have offered no credible explanation as to why they continued to
claim depreciation allowances on it for all of 1990 and 1991.
Similarly, petitioners have failed to substantiate the
other business expenses claimed as deductions. Taxpayers are
required to substantiate claimed deductions by maintaining and
producing the records needed to establish entitlement to their
claimed deductions. See sec. 6001. Petitioners failed to do
so. They presented no invoices or canceled checks to
substantiate their claimed payments for freight, interest,
repairs and maintenance, or utilities and telephone.9
Accordingly, we sustain respondent’s determination in this
regard.
9 Petitioners introduced copies of a number of canceled
checks, many of which appear to represent payments to satisfy
petitioner’s personal obligations to various creditors as
determined under the settlement agreement. Several of the checks
are made payable to Venco or Ed Zielinski. Petitioner testified
that these checks represent his reimbursements to Zielinski for
amounts expended on petitioner’s behalf for wages, supplies, and
parts. None of the checks, however, have been shown to correlate
to the deductions claimed on petitioners’ Schedules C, which
include no deductions for wages, supplies, or parts.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011