James R. and Janet M. Landrum - Page 18

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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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