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petitioner’s claimed deductions were substantiated. Respondent’s
auditors reviewed petitioner’s records before respondent filed
his answer. At the time of the review, petitioner was not
available to provide assistance or information concerning his
records. Without the benefit of petitioner’s assistance,
respondent’s auditors found that the records failed to
substantiate petitioner’s tax return positions. We are not
persuaded by petitioner’s apparent argument that he is entitled
to leave with respondent a box containing some of his records
without adequate explanation and expect that respondent’s
auditors somehow will figure out the details of his business and
finances without the benefit of assistance or explanation by
petitioner.
After respondent filed his answer, an Appeals conference was
held promptly. At the Appeals conference, petitioner disclosed
the terms of his prenuptial agreement, which affected the
division of business income and expenses. As soon as this
information was disclosed, together with other explanations and
documents requested by the Appeals officer, respondent allowed
petitioner’s claimed deductions and conceded that petitioner was
not liable for the additions to tax.
For purposes of determining the reasonableness of
respondent’s position, the Court considers the facts known to
respondent at the time the position was taken. When respondent
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Last modified: May 25, 2011