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Petitioners must show AJCS’s entitlement to the claimed
deduction. See Rule 142(a).
Petitioners allege in their petitions that they are entitled
to deduct accrued workmen’s compensation expenses of $269,815.
Respondent contends that, under section 461(h), petitioners are
not entitled to the disputed workmen’s compensation insurance
expense deductions because petitioners failed to substantiate
that the expenses were incurred.
Petitioners, in their posttrial brief, state as follows:
AJCS “is also entitled to an additional insurance expense of
$269,815 per IRC 162 as this expense was for workers’
compensation insurance premiums, not for tort worker’s
compensation claims that are not allowed until paid per IRC 461.”
At trial, petitioners’ counsel posed to John Snider, chief
financial officer of AJCS, a series of generalized questions
about workmen’s compensation insurance. That is the extent of
petitioners’ arguments and proof. Petitioners made no attempt to
explain various exhibits they submitted regarding this issue.
Petitioners submitted copies of checks written from AJCS to
various insurance companies. These checks totaled approximately
$275,000. Petitioners also offered copies of checks remitted by
W&J, Inc., to various insurance companies. These checks totaled
over $800,000. On this record, we remain unaware of the
relevance of checks remitted by W&J, Inc. Finally, petitioners
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