- 8 - Issue 2. Petitioner’s Claimed Deductions for 1988 and 1993 The remaining dispute for 1988 concerns petitioner’s claim to a commission expense deduction in the amount of $10,000.6 The only dispute in 1993 involves petitioner’s claim to various deductions, the precise nature of which is not clear from the record.7 Deductions are a matter of legislative grace, and a taxpayer must substantiate amounts claimed as deductions by maintaining records adequate to establish such entitlement. Sec. 6001; INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); sec. 5(...continued) petitioner has not “fully cooperated” with respondent as required by the statute. Sec. 6201(d) provides that full cooperation includes “providing * * * access to and inspection of all * * * documents within the control of the taxpayer” if reasonably requested. Petitioner admits possessing the books and records of Bankers Mortgage yet never provided such records to respondent despite respondent’s repeated requests that petitioner substantiate her claims regarding the Form 1099 from Bankers Mortgage. Thus, with respect to this item of income, petitioner has not “fully cooperated”, and sec. 6201(d) is inapplicable. See McQuatters v. Commissioner, T.C. Memo. 1998-88. 6 Petitioner claimed this deduction as a Schedule C, Profit or Loss From Business, expense on the 1988 Form 1040 she submitted to respondent in connection with these proceedings. Respondent allowed the other Schedule C expenses that petitioner claimed on the Form 1040 but contends that petitioner has not adequately substantiated that the $10,000 represented a deductible expense rather than a capitalizable cost related to the acquisition of real estate. 7 Petitioner claimed various expenses on a 1993 Form 1040 that she submitted to respondent shortly before trial. Respondent agreed to allow certain deductions listed on Schedule A and Schedule C of the Form 1040 that respondent concedes were adequately substantiated but contends that all remaining deductions claimed by petitioner have not been substantiated.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011