Thomas Rice - Page 10

                                         - 10 -                                          
          1985, $3,955 in 1986,11 and zero in 1987.  In his petition,                    
          petitioner contended that he--                                                 
               incurred for all years relevant to the Notice, various                    
               and certain deductible business expenses, ordinary and                    
               necessary for the conduct of his businesses, including                    
               businesses involving the ownership of certain real                        
               property, all of which businesses during certain years                    
               incurred both capital and net operating losses which                      
               the Commissioner erroneously disallowed.                                  
               Petitioner failed to produce any evidence of his alleged                  
          business expenses.  At trial petitioner blamed the lack of                     
          evidence on respondent, contending that respondent had all of                  
          petitioner’s business records and was unwilling to share them                  
          with petitioner.12                                                             
               Petitioner’s contention lacks merit.  The only records of                 
          petitioner that respondent had in his possession and used in                   
          making his determination were petitioner’s bank records that                   
          respondent had obtained from various financial institutions by                 
          summons.  The record shows that petitioner had numerous                        
          opportunities to inspect the bank records in respondent’s                      
          possession during the time before and between the two dates of                 


               11On Mar. 1, 1986, IFC lost its corporate charter.  The                   
          Schedule C expenses respondent allowed for 1986 are those IFC                  
          incurred from March through December of 1986.                                  
               12Specifically, petitioner asserted that the business                     
          records had been in the possession of his former partner, Mr.                  
          Dill, and were at some point “confiscated” by “the IRS.”                       
          According to respondent, any business records held by the                      
          Government relating to Mr. Dill had nothing to do with                         
          petitioner.  In fact, petitioner’s lack of business records                    
          necessitated respondent’s use of the bank deposits method.                     




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