- 8 - generally that taxes were paid to the City of Louisville, the County of Jefferson, and the Commonwealth of Kentucky. However, he did not say when, how much, or by whom those taxes were paid, or provide any corroboration for his testimony. Petitioner did not meet his burden of proof.7 We conclude that petitioner may not deduct the cost of labor and taxes in amounts greater than respondent allowed for 1993. C. Whether Stan’s Pawn Shop Was a Partnership in Which Petitioner Held a One-Third Interest Petitioner concedes that Stan’s Pawn Shop had a profit of $25,218 in 1993. However, he contends that he is liable for income tax on only one-third of that income because Stan’s Pawn Shop was a partnership in which he held a one-third interest. He testified that his partners were his former spouse and his former best friend (otherwise unidentified in the record) who is now deceased. We disagree that petitioner is liable for only one- third of the income of Stan’s Pawn Shop. Petitioner reported income and expenses for Stan’s Pawn Shop as a sole proprietorship on Schedule C of his 1993 return. Stan’s Pawn Shop did not file a partnership return or Schedules 7 Sec. 7491, relating to the burden of proof, applies to court proceedings arising in connection with examinations beginning after July 22, 1998. See Internal Revenue Service Restructuring & Reform Act of 1998, Pub. L. 105-206, sec. 3001(a), (c), 112 Stat. 685, 726. The examination here began before that date. Thus, sec. 7491 does not apply.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
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