Joyce H. Sams - Page 8




                                        - 7 -                                         
          1998, Pub. L. 105-206, 112 Stat. 685, 726.                                  
               It is not clear from the record when respondent commenced              
          the audit of petitioner’s individual return; therefore, we cannot           
          determine whether section 7491 is applicable.  Nevertheless,                
          petitioner has not established that she complied with its                   
          requirements.  Respondent claims that petitioner showed only                
          partial cooperation in the examination and Appeals processes and            
          that she produced only minimal documentation after repeated                 
          requests.  We agree.  Accordingly, even if section 7491 were                
          applicable, we conclude that the burden of proof remains upon               
          petitioner.                                                                 
          1.  Allocation of Gross Receipts                                            
               The notice of deficiency determined that gross receipts                
          reported on the return for Sams, Inc. of $37,828 should have been           
          reported on petitioner’s individual return.  Respondent                     
          disallowed deductions claimed on the return of Sams, Inc. of                
          $35,866 but allowed Schedule A deductions of $2,5773 and a                  
          Schedule C deduction of $20,010 on petitioner’s individual                  
          return.4  The net disallowance is $13,279 ($35,866 less ($2,577             
          plus $20,010)).  Respondent reasons that the income and certain             


               3  Respondent subsequently allowed an additional deduction             
          for an advertising expense of $20.                                          
               4  Respondent concedes that petitioner is entitled to these            
          deductions if the Court concludes that respondent’s allocation of           
          income to petitioner is proper.                                             





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011