Luciano V. Flores - Page 5

                                        - 4 -                                         
          had the help of an accountant, and he still had not organized his           
          records.  This is inexcusable.  Petitioner’s posttrial motion to            
          be relieved of the stipulation of facts and the other documents             
          referred to above are simply a continuation of this conduct.                
          Petitioner’s motion will be denied.                                         
          2.  The Deductions                                                          
               For reasons that are apparent, we combine our findings of              
          facts with our discussion.  Petitioner was a residential building           
          contractor during 1998.  The parties agree that petitioner had              
          gross receipts of $107,668.  While he did have a checking                   
          account, petitioner received from his customers and paid to his             
          suppliers mostly cash.  Petitioner kept no books of record of his           
          income or expenses.  Rather he seems to have used a record-                 
          keeping method of throwing receipts in a box and thereafter                 
          ignoring the box when the return was prepared.  On Schedule C               
          petitioner claimed total expenses of $100,330 or approximately 93           
          percent of his gross receipts.  Even though he prepared the 1998            
          return, petitioner cannot explain the entries on the return.                
          Upon examination, respondent disallowed $36,914 of the expenses             
          claimed.  Under respondent’s view, petitioner’s expenses were               
          approximately 59 percent of his gross receipts.                             
               At trial petitioner’s testimony was often vague and                    
          contradictory.  Many of the receipts that petitioner presented              
          are made out to his brother, who was also a contractor, and/or              






Page:  Previous  1  2  3  4  5  6  7  Next

Last modified: May 25, 2011