- 79 -
On brief, respondent has conceded that Management is
entitled to certain deductions for the years in issue. The Court
thus holds that Management is entitled to farming and other
deductions in the amounts respondent conceded. The Court further
holds that Management is not entitled to deductions for the years
in issue in excess of the amounts respondent conceded. See Rules
142(a), 240(a).
On the record presented, petitioners have failed to
establish that Management is entitled to fuel tax credits.
Consequently, the Court sustains respondent’s determinations in
the FPAA’s that Management is not entitled to fuel tax credits
for some of the years in issue. See Rules 142(a), 240(a).
Similarly, on the record presented, petitioners have failed to
establish that Management is entitled to deduct research and
development expenses under section 174. Among other things, the
Court is not satisfied that expenditures were actually incurred
in the amounts claimed for research or experimentation. See sec.
1.174-2(a)(1), Income Tax Regs. There is evidence of numerous
irregularities in the Hoyt organization’s “cattle records”,
including the fabrication of substantial amounts of fictitious
cattle information. See supra note 22. Consequently, the Court
sustains respondent’s determinations in the FPAA’s that
Management is not entitled to deduct research and development
expenses under section 174 for some of the years in issue. See
Page: Previous 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 NextLast modified: May 25, 2011