Harold L. & Lacheer A. Dozier - Page 3




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          the purposes designated.                                                    
               Deductions are strictly a matter of legislative grace.                 
          INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New                  
          Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).                    
          Taxpayers must substantiate any deductions claimed.  Hradesky v.            
          Commissioner, 65 T.C. 87 (1975), affd. per curiam 540 F.2d 821              
          (5th Cir. 1976).  Section 6001 imposes upon every person liable             
          for any tax a duty to maintain records that are sufficient to               
          enable the Commissioner to determine the taxpayer’s correct tax             
          liability.  Sec. 1.6001-1(a), Income Tax Regs.                              
               Petitioner Harold L. Dozier claimed he was in business with            
          Ms. Faye Williams and Mr. Leonard Campbell to buy and sell names            
          “over the Web”.                                                             
               Mr. Herman Tyler, petitioners’ tax return preparer,                    
          testified.  Mr. Tyler claimed that petitioners borrowed                     
          approximately $25,000 from Keanon Thompson, a 14 year-old boy, so           
          they could participate in the business.  Mr. Tyler asserted that            
          he arranged the loan because he had Keanon Thompson’s power of              
          attorney.  Mr. Tyler referred to a promissory note, but no                  
          promissory note was introduced in evidence.  According to his               
          testimony, the funds never went to petitioners, but remained in             
          Mr. Tyler’s hands.  Mr. Tyler also testified that he held funds             
          in trust for petitioners and made wire transfers to Mr. Leonard             
          Campbell of California.  He said these wire transfers represented           






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