- 2 -
and $53,243, respectively.2 The determined deficiencies are
largely attributable to respondent’s disallowance of all
deductions claimed by petitioners on Schedule C, Profit or Loss
From Business.3 Respondent disallowed the claimed deductions on
the grounds that the expenses supporting such deductions (1) were
not incurred or (2) if incurred, were not paid for ordinary and
necessary business purposes.
We shall grant respondent’s motion to dismiss for lack of
prosecution, and we shall enter a decision against petitioners
for the stated deficiencies and penalties. In light of our
action, we consider it appropriate to explain the events in this
case.
Background
On July 14, 1997, petitioners filed their petition in this
case and requested that the trial be held in Phoenix, Arizona.
In addition to being signed by counsel for petitioners, the
petition was also executed by each petitioner individually. The
address for petitioners listed therein was 8502 East Sutton
Drive, Scottsdale, Arizona.
2 Respondent later revised his determination to reflect
deficiencies in petitioners’ Federal income tax of $121,661 and
$256,860 for 1993 and 1994, respectively, and accuracy-related
penalties of $24,332 and $51,372, respectively.
3 Respondent disallowed $314,678 and $424,993 of Schedule
C, Profit or Loss From Business, deductions for taxable years
1993 and 1994, respectively.
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