- 4 -
Utilities -- 1,200 -- --
Other expenses -- 950 2,292 --
Total expenses 1,495 8,414 6,925 5,010
Net loss (1,208) (7,659) (6,433) (4,341)
1 After 20-percent limitation pursuant to sec. 274(n).
Petitioners did not file their 1993 Federal income tax
return by the April 15, 1994, due date. Additionally,
petitioners did not request an extension of time to file the 1993
tax return. Petitioners filed their 1993 return on March 3,
1997, nearly 3 years past the due date.
In the notice of deficiency, respondent disallowed all
amounts reported for returns and allowances, cost of goods sold,
and business expense deductions shown above because petitioners
failed to establish that the amounts reported were ordinary and
necessary business items. Further, respondent determined an
addition to tax and a penalty pursuant to sections 6651(a)(1) and
6662(a), respectively.
This case was originally set for trial on October 16, 2000.
On two occasions prior to the original trial date, respondent
requested a meeting with petitioners to discuss the case and
prepare a stipulation of facts. Petitioners did not respond to
either of respondent’s requests.
Immediately prior to calendar call, Mr. Nunn presented
respondent with an unorganized packet of documents. This was the
first meeting between the parties.
At calendar call, Mr. Nunn appeared and orally moved for a
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