- 152 -
is unclear to us the extent to which petitioner claimed those
items as expenses on his returns, and, the amounts claimed and
disallowed.97 Petitioner did not prepare separate Schedules C
for the orange grove, cattle, and Ferrari collection activities
for 1985 through 1988. Instead, he claimed those expenses, along
with other expenses including personal expenses, on the Schedules
C relating to his real estate business. We also point out that
petitioner’s method of preparing his returns considered only
whether a disbursement was made from his personal bank accounts
and not whether that disbursement related to a trade or business
or was otherwise a deductible expense.
Given petitioner’s faulty method of preparing his returns,
and the inherently personal nature of many of the expenditures
claimed on his returns, petitioner has not established that the
portion of the underpayment arising from the disallowed expense
deductions is not attributable to fraud. Petitioner has not
shown that any portion of the underpayment for each of the years
1986, 1987, and 1988, is not attributable to fraud, and,
accordingly, the entire underpayment for each of those years is
subject to the addition to tax for fraud.
97We note that the civil report that respondent prepared
indicates that certain expenses were disallowed with respect to
petitioner’s Ferrari automobile collection and his orange grove
and cattle activities. However, since petitioner lumped the
expenses relating to those activities into expenses relating to
other activities, and reported them as car and truck and repair
and maintenance expenses, we are unable to determine to what
extent those items were claimed as deductions on his returns.
Page: Previous 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 NextLast modified: May 25, 2011