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activity with a bona fide profit objective during 1996 and 1997.
Plainly, if respondent had the burden of proof, he satisfied it;
so section 7491(a) is of no help to petitioners. Kelly v.
Commissioner, T.C. Memo. 2001-161. Also, since petitioners
failed to introduce credible evidence of their profit objective
and failed to cooperate with respondent’s reasonable requests for
witnesses, information, documents, meetings, and interviews
through failure of their accountants or otherwise, section
7491(a) would not place the burden of proof as to this issue on
respondent. Higbee v. Commissioner, supra.
2. Charitable Contributions
Petitioners filed Schedules A, Itemized Deductions, with
their joint Federal income tax returns in 1996 and 1997, and
reported the following gifts to charity:
1996 1997
Gifts by cash or check $2,200 $2,600
Gifts other than by cash or check 5,200 6,700
Total gifts 7,400 9,300
Respondent determined that petitioners did not adequately
substantiate the fair market value of the clothing and other
items that they contributed to various nonprofit organizations.
Accordingly, respondent allowed deductions for charitable
contributions for 1996 and 1997 in the amounts of $740 and $930,
respectively. The amounts allowed represent 10 percent of the
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