Royal and Shelly Spence Wiley - Page 13




                                       - 12 -                                         

          admitted on brief that the deductions at issue were not based on            
          books and records and even acknowledged at trial that they                  
          questioned Mr. Beltran regarding certain expenses that they had             
          not claimed as deductions on prior years' returns.  Petitioners             
          did not look beyond Mr. Beltran's representations.  The Court is            
          satisfied that petitioners knew that they could only claim                  
          deductions that could be substantiated, and, even if they did not           
          know that, at the very least, the representations that such                 
          deductions could be claimed without documentation should have               
          prompted them to verify the accuracy of such a representation               
          with a qualified preparer.  In addition, petitioners' failure to            
          question Mr. Beltran's representations that noncash charitable              
          contributions could be lumped in or considered as cash                      
          contributions should have raised additional questions as the                
          income tax forms clearly specify the need for an additional form            
          and other information where such contributions exceed $500.                 
          Moreover, the amounts claimed for unreimbursed employee expenses            
          were clearly disproportionate to petitioner's wages, which also             
          should have merited further inquiry.  Petitioner's failure to               
          claim reimbursement from his employer for at least some of his              
          expenses casts further doubt that such expenses were in fact                
          incurred.  These facts demonstrate to the Court that petitioners            
          made no reasonable effort to ascertain their correct tax                    
          liability for the years at issue.  Stubblefield v. Commissioner,            





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011