Oliver W. and Edna D. Wilson - Page 30




                                       - 30 -                                         
          meeting with petitioner and the accountant.  Respondent also                
          discussed section 263A in the trial memorandum he submitted                 
          before trial.  Moreover, petitioners were not prejudiced by                 
          respondent’s section 263A argument.  Accordingly, we shall not              
          bar respondent from relying upon section 263A.  Stewart v.                  
          Commissioner, 714 F.2d 977, 985-987 (9th Cir. 1983), affg. T.C.             
          Memo. 1982-209; see also Achiro v. Commissioner, 77 T.C. 881, 891           
          (1981).                                                                     
               B.  New Matter and Burden of Proof                                     
               Section 752211 requires the Commissioner to issue a notice             
          of deficiency that contains a description of the basis for the              
          Commissioner’s determination.  In this case, respondent issued              
          two notices of deficiency.                                                  
               The first notice of deficiency, issued with respect to 1993,           
          described respondent’s basis for disallowing petitioners’                   
          Schedule C expenses as follows:                                             
               It is determined that schedule C expenses are $0.00                    
               rather than $29,254.00 for the taxable year 1993.                      
               Since your restaurant business was not in operation in                 
               the taxable year, all otherwise allowable expenses are                 
               start up expenses which must be amortized over not less                
               than 60 months starting in the month that the                          
               restaurant is open for business.  Further, it has not                  
               been established that any amount represents an ordinary                
               and necessary business expense or was expended for the                 
               purpose designated.                                                    



               11Sec. 7522 applies to notices of deficiency issued after              
          Jan. 1, 1990.                                                               





Page:  Previous  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  Next

Last modified: May 25, 2011