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5. Held, further, the allowable business expenses of
Ps’ salvage business determined.
6. Held, further, the cost of goods sold of Ps’
salvage business determined.
Samuel T. Seawright and Carol A. Seawright, pro sese.
James R. Rich, for respondent.
THORNTON, Judge: Respondent determined a $6,125 deficiency
in petitioners’ joint 1995 Federal income tax. The issues for
decision are: (1) Whether respondent’s agents violated section
7602(c), which requires the Internal Revenue Service (IRS) to
give taxpayers advance notice of certain third-party contacts;
(2) whether respondent’s agents violated section 7602(e),
limiting respondent’s use of financial status or economic reality
examination techniques; (3) whether, pursuant to section 7491,
respondent bears the burden of proof; (4) whether petitioners are
entitled to deduct various business expenses of their salvage
business in amounts greater than respondent has allowed; and (5)
whether petitioners are entitled to reduce gross receipts from
their salvage business by certain amounts for cost of goods
sold.1
1 All section references are to the Internal Revenue Code as
in effect for the relevant taxable year, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
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