Nadeem Chowdhury and Brenda S. Garth Chowdhury - Page 6

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               Respondent sent a “Branerton” letter to petitioners on                 
          December 3, 1999.  In response, petitioners sent respondent items           
          such as telephone bills, an invoice for a 1995 advertisement,               
          miscellaneous invoices for cost of goods sold, and letters from             
          credit card companies stating how much petitioners owed in                  
          principal and interest.                                                     
               Less than 72 hours before the calendar call for this case to           
          go to trial, petitioners provided respondent with additional                
          substantiating documentation.  This documentation established               
          that petitioners did have an advertising campaign.  There were              
          also records of 180 clients’ names, the orders the clients                  
          placed, follow-up letters, and thank-you letters.  During the               
          week of the trial calendar, petitioners provided records that               
          established that they incurred substantial debts in the early               
          years of their activity to finance inventory and advertising                
          costs.  These debts were in the form of credit card purchases and           
          cash advances.  Other newly provided information demonstrated               
          that the interest and commission expenses were related to                   
          business purposes.  The Schedule C deductions disallowed by                 
          respondent consisted mainly of the interest and commission                  
          expenses.  After receiving and reviewing the newly furnished                
          information, respondent settled the case in a period of 6 days.             
          Respondent conceded the issues to the extent that they were                 
          properly substantiated.  Respondent and petitioners agreed that             

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