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Expense Amount
Legal and professional $9,847
Rent or lease 12,120
Repairs and maintenance 463
Supplies 146
22,576
Petitioner terminated the tutoring activity at the end of 1996.
Respondent, in his notice of deficiency, disallowed all of
the deductions reported on Schedule C. Respondent asserted that
the expenses were not paid or incurred, and that the expenses
were not ordinary and necessary. At trial, respondent further
contended that, if petitioner is able to substantiate the
expenses, part of the expenses should be disallowed under section
183.
Discussion
A. General
The record in this case is confused, disorganized, and
fraught with inconsistent assertions and theories. The truth in
this case is elusive. Of concern is that petitioner operated an
activity in cash, maintained no books and records, yet reported
specific amounts of income and deductions. Petitioner and his
accountant have failed to provide sufficient detail as to
expenditures. While we conclude that petitioner tutored some
students, the vague testimony makes it impossible to determine
the nature and extent of petitioner’s activities. While
petitioner was generally credible, we are satisfied that the
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