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B. Supplies and Services
Included among the returns and allowances reported on
his 1989 return are payments that petitioner claims to have
made to clients to purchase "supplies and services".
Petitioner relies upon his own testimony and copies of
canceled checks to substantiate this claim. Petitioner
testified that the payments in this category, totaling
$5,500, consist of payments to three clients, Mr. Dana,
Mr. Kolton, and Jepsco, in the amounts of $500, $500, and
$4,500, respectively. At trial, petitioner testified that
the $500 payment to Mr. Dana was a fee "for supplies that
he provided for me in my business", the $4,500 payment to
Jepsco was "for consulting fees", and the $500 payment to
Mr. Kolton was "for legal services * * * in a probate
matter" rendered by Mr. Kolton. Petitioner testified
further that Mr. Kolton assisted petitioner with a probate
matter and "looked up some stuff and filed a paper".
Petitioner introduced copies of three canceled checks
payable to Mr. Dana, Mr. Kolton, and Jepsco containing the
notations "fee", "serv.", and "consulting", respectively,
in the memo section of the checks.
The evidence offered by petitioner is insufficient to
substantiate that petitioner is entitled to offset gross
income by, or to deduct, these amounts. Petitioner's
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