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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 their
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