Rick and Ruth Baime Richards - Page 18

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          of a promoter or manager.  Mr. Richards did not adequately                  
          address this issue at trial, and there is no evidence in the                
          record to further explain these expenses.  We do not find these             
          expenses to be ordinary and necessary with regard to Mr.                    
          Richards’ writing activity.                                                 
               Petitioners claimed a deduction of $115 for the transmission           
          of scripts and lyrics by fax via retail establishments that                 
          offered fax services.  In the record are receipts for fax                   
          services in the amount of $7.  Petitioners did not maintain any             
          records detailing what was faxed and to whom.  Without adequate             
          substantiation, we cannot allow this deduction.  Therefore,                 
          petitioners are not entitled to a deduction of $115.                        
               Petitioners claimed a deduction of $1,189 for shipping                 
          costs.  Mr. Richards claimed that he sent scripts via Federal               
          Express, United Parcel Service, and the U.S. Postal Service.  Mr.           
          Richards would also send his screenplays and lyrics to himself by           
          U.S. registered mail for copyright protection of his work.  The             
          record contains receipts from the U.S. Postal Service totaling              
          $439 for shipping costs and registered mail.  While there are no            
          notations on the receipts as to what was shipped, there are                 
          notations on some of the canceled checks that indicate that the             
          expenses were for Mr. Richards’ writing activity.  We believe               

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Last modified: May 25, 2011