- 15 - tively, which were the respective amounts determined for those years on the basis of respondent’s application of the source and application of funds method. In the notice, respondent also determined to disallow the claimed Schedule C car and truck expenses for 1993, 1994, and 1995 in the amounts of $11,550, $9,352, and $16,875, respectively “because it has not been established that more than $5,250.00 for 1993, $5,438.00 for 1994 and $5,625.00 for 1995 was for an ordinary and necessary business expense, or was expended for purpose designated.” In the notice, respondent also determined that the insurance reimbursements of $4,300 and $4,700 that petitioners received during 1994 and 1995, respectively, resulted in taxable gain to petitioners because they had “deducted the cost of the tools that were stolen in prior years * * * [and] your basis is zero.” In the notice, respondent also determined that petitioners are liable for each of the years at issue for the addition to tax under section 6651(a)(1) because they failed to file timely their return for each of those years. OPINION Petitioners bear the burden of proving that the determina- tions in the notice are erroneous. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011