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Schedule C: "Accessories And Apperals [sic]"
Cost of goods sold $2,546
Expenses:
Advertising 255
Legal & professional services 250
Supplies 982
Taxes & licenses 216
Travel 1,695
Meals & entertainment 397
Other expenses:
Transportation $967
Telephone 825
Freight charges & postage 483
Location rentals 396 2,671
Total 9,012
Petitioner filed his 1994 return on May 3, 1996. Petitioner
timely filed his 1995 return. Upon examination of the returns,
respondent disallowed all of petitioner's claimed expenses2 and
cost of goods sold for 1994 due to lack of substantiation.
Additionally, respondent adjusted petitioner's income for 1994 to
include $1,0983 received from United and $440 for the taxable
portion of petitioner's retirement distribution. Respondent
asserted a 10-percent tax of $44 on the early distribution of
petitioner's retirement fund. Respondent disallowed all but $452
2 Petitioner's expenses listed on the 1994 Schedule C,
"Clothing and Accessories", totaled $5,010. We note the notice
of deficiency contains a typographical error with regard to the
disallowance of these expenses. Although respondent disallowed
petitioner's expenses for 1994 in full, the notice of deficiency
lists the total amount of expenses disallowed as $5,001.
3 The parties have stipulated $1,098 as the amount of
income petitioner received from United. United issued petitioner
a Form 1099-MISC for 1994 reflecting income paid in the amount of
$1,098.39. However, the notice of deficiency increased
petitioner's income by the amount of $1,097.
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