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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.
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