- 3 - 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 representedPage: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011