Robert Griffin and Julia Griffin - Page 8




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          was attributable as an ordinary and necessary expense, or as                
          payment to protect such business.”3                                         
               Section 7491 does not define what constitutes credible                 
          evidence.  The pertinent legislative history states: “Credible              
          evidence is the quality of evidence which, after critical                   
          analysis, the court would find sufficient upon which to base a              
          decision on the issue if no contrary evidence were submitted                
          (without regard to the judicial presumption of IRS correctness).”           
          H. Conf. Rept. 105-599, at 240-241 (1998), 1998-3 C.B. 747, 994-            
          995; see Higbee v. Commissioner, 116 T.C. 438, 442 (2001).                  
               The only evidence regarding the nature of petitioners’                 
          business activities consists of petitioner’s summary and                    
          uncorroborated testimony.  He testified, with little elaboration,           
          that he has been a building contractor and land developer for               
          about 30 years, during which time he has developed about one                
          project a year.  On cross-examination, he testified that his                
          construction and real-estate development businesses are not                 
          separate businesses, but are “all tied together.  They’re all–-             
          any business I have is–-if I–-if they are–-oftentimes I                     
          incorporate, because of the liability aspect.  They are                     
          Subchapter S if they are.”                                                  




               3 Respondent does not contend that petitioners fail to                 
          satisfy other requirements of sec. 7491(a)(2).                              





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