- 9 -- 9 - received income from a pension. It is also important to note that petitioners did not list Mr. Potter or Susan as dependents on either their Form 1040 or Form 1040X. As a result, the Court concludes that neither Mr. Potter or Susan qualify as petitioners' dependents under section 152. Even if Mr. Potter and Susan were qualified dependents, petitioners failed to satisfy the substantiation requirements of section 1.213-1(h), Income Tax Regs. Petitioners claimed a medical expenses deduction of $9,847. Petitioners provided a computer printout detailing the expenses but failed to provide any underlying evidence or documentation to substantiate the claimed deductions. During trial Mr. Palomo was questioned about the discrepancy between the amounts shown on his computer printout and the Form 1040X. Petitioners' Form 1040X shows $9,847.00 of Medical and Dental Expenses and the computer printout shows $4,607.45 in medical expenses. Mr. Palomo testified that he determined the total amount spent while in Florida by estimating the amount they spent each day and multiplied it by their total number of days in Florida. Mr. Palomo's testimony failed to provide a satisfactory explanation as to the differences in the amounts; it was improbable, vague, and as a result, unreliable. Petitioners are not entitled to deduct the claimed medical expenses and as a result cannot offset any of the 10-percent additional tax due because of the early withdrawal from theirPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011