- 12 -
documents show that petitioners were involved in various
investments, lawsuits, bankruptcies, and other legal matters, but
they do nothing to substantiate specific deductible expenses.
The documents which do show specific expenditures are with
respect to the attorneys and the court reporting services noted
above.
Petitioners first argue that they are entitled to deduct
additional expenses paid to Mark Kirby and Brian Upchurch in
1995, and to Matthew Martin in 1996. We hold that petitioners
are not entitled to these deductions because they have failed to
substantiate the payment of these expenses during the relevant
years. Sec. 6001; sec. 1.6001-1(a), (e), Income Tax Regs.
Petitioners next argue that they are entitled to deduct
additional expenses paid to the two court reporting services,
Janet Brown, and Brian Upchurch in 1996, and to Kirk Osborn in
1996 and 1997. A portion of these expenses was incurred in
connection with the secondary malpractice suit brought by
petitioners. The suit underlying the original malpractice claim
by petitioners dealt with several issues, including petitioners’
personal bankruptcy and their investment in Tara. Because the
connection between petitioners’ investment in Tara and the
secondary malpractice suit years after Tara’s existence is too
attenuated to ascertain; we are unable to estimate the portion of
these expenses which may be deductible versus the portion which
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011