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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).
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