- 31 -
The notice also described respondent’s basis for disallowing the
NOL carryforward as follows:
It is determined that the net operating loss
carryforward from the taxable year 1992 is $0 rather
than $57,518 for the taxable year 1993. It has not
been established that any deductible net loss was
incurred or was available for carryforward to the
taxable year 1993.
The second notice of deficiency, issued with respect to
1992, described respondent’s basis for disallowing petitioners’
Schedule C expenses as follows:
Since you did not establish that the business expense
shown on your tax return was paid or incurred during
the taxable year and that the expense was ordinary and
necessary to your business, we have disallowed the
amount shown.
The notice also described respondent’s basis for disallowing
petitioners’ NOL carryforward-–“Since you did not establish that
the amount shown [$92,611] was (a) a loss, and (b) sustained by
you, it is not deductible.”
Neither notice of deficiency specifically mentions section
263A. Petitioners implicitly argue that respondent’s belated
attempt to rely on section 263A amounts, in effect, to the
raising of a new matter on which respondent bears the burden of
proof. See Rule 142(a) (“The burden of proof shall be upon the
petitioner, except as otherwise provided by statute or determined
by the Court; and except that, in respect of any new matter,
* * * it shall be upon the respondent.”).
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 NextLast modified: May 25, 2011