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Respondent determined a deficiency of $7,615 in petitioners’
1994 Federal income tax. The issue for decision is whether
petitioners are entitled to a deduction for certain accrued but
unpaid business expenses.
Background
Some of the facts have been stipulated and are so found.
Petitioners are husband and wife. They filed a timely joint 1994
Federal income tax return which was prepared by a professional
income tax return preparer. At the time that the petition was
filed, they resided in Beech Grove, Indiana. References to
petitioner are to Jeffrey D. Woodlee.
During 1994, petitioner was the sole proprietor of Specialty
Insulators (Specialty), a business engaged in the installation of
insulation in commercial and residential buildings. Business
income was deposited into, and business expenses were paid from,
a separate checking account maintained by petitioner for such
purposes.
Included with petitioners’ 1994 return is a Schedule C,
Profit or Loss From Business, on which the income and deductions
attributable to Specialty are reported as follows:
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Last modified: May 25, 2011