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For 1995, petitioners deducted legal and professional
expenses of $7,920, of which respondent allowed $5,000. The
remaining $2,920 amount was disallowed in the notice of
deficiency. In support of the deductibility of this $2,920,
petitioners produced canceled checks showing the following
payments:
Date Payee Amount
01/13/95 Susan Javellana $ 500
01/23/95 Betty Crutcher 500
01/23/95 Jim Costa 70
07/28/95 Tanya L. Lynch 400
07/28/95 Antonio Cristi 100
07/28/95 Tanya Oliver 100
07/28/95 Vanessa M. Taylor 550
12/15/95 Titi Oconnor 700
Total $2,920
All of these checks were signed by petitioner; however, none
listed a notation in the memo section as to the purpose or reason
for payment, nor whether the payees were attorneys. Moreover, no
evidence was presented to show the relationship of most of these
payees to petitioner’s business activities. Finally, no evidence
was presented that would indicate these payments were incurred in
petitioner’s trade or business. Thus, the Court holds that these
expenses are not deductible.
For 1996, petitioners deducted $468.54 in legal and
professional expenses, all of which was disallowed by respondent.
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