Efrain J. and Josefina Xuncax - Page 19




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               H.  Other Expenses                                                     
               With respect to the remaining expenses claimed on                      
          petitioners’ Schedule C and disallowed by respondent, we hold               
          that petitioners have failed to substantiate these deductions.              
          The only other evidence in the record consists of miscellaneous             
          receipts, many of which provide no information regarding the                
          subject of the underlying transaction or the parties thereto.               
          Many others are from restaurants (e.g., McDonald’s, Taco Bell,              
          Sizzler), gas stations, and grocery stores.  A significant                  
          portion are obviously for nondeductible personal expenditures.              
          Moreover, to the extent that they might relate to the claimed               
          travel, meal, and vehicle expenses, the receipts fall far short             
          of the strict substantiation requirements of section 274.  We               
          sustain respondent’s position as to all remaining expenses not              
          previously addressed.                                                       
          III.  Accuracy-Related Penalty                                              
               Subsection (a) of section 6662 imposes an accuracy-related             
          penalty in the amount of 20 percent of any underpayment that is             
          attributable to causes specified in subsection (b).  Subsection             
          (b) of section 6662 then provides that among the causes                     
          justifying imposition of the penalty are:  (1) Negligence or                
          disregard of rules or regulations and (2) any substantial                   
          understatement of income tax.                                               








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