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accounts, I could not find $15 which could qualify for a bad debt
and I do not have recollection of why I put $15 on that tax
return.” With respect to the advertising expenses of $140, the
summary lists charges of $5.90 at Kmart, $122.13 at Home Depot,
$5.94 at Wal-Mart, and $5.94 at Raley’s. Petitioner could not
explain how these charges were related to advertising, even
though he prepared the summary listing them as such in
preparation for trial. Similarly, with respect to the commission
and fee expenses, the summary lists charges made at Chevron,
Scandinavian Design (for furniture), Wal-Mart, Student Book
Exchange, and Jo-Ann Fabrics, along with the annual credit card
fee of $100.
Finally, certain amounts reported by petitioners on the
return raise suspicion. For example, petitioners reported
exactly 85 percent business and 15 percent personal use with
respect to both the Ford Ranger and the computer. Petitioners
also reported bad debt expenses of $15 and business property
rental expenses of $62. All of these amounts seem to have been
arbitrarily selected by petitioners when filing their tax return.
Petitioners argue that IRS employees had possession of their
“tax receipts” and refused to return them. They provide no
reliable evidentiary support for this contention. In letters
petitioner sent to the IRS in late 1999 and early 2000, he
referred to the existence of missing records which had been given
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Last modified: May 25, 2011