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(2) Tax Preparation Fees: $617
Prior to the trial in this case, petitioner provided no
substantiation for the $617 deduction for tax preparation fees on
Schedule A of the 1999 amended return.
OPINION
I. Schedule C Deductions
A. Introduction; Burden of Proof
Respondent denies that petitioner is entitled to any
Schedule C deductions associated with either Cool G Records or
Melissa’s efforts to carve out a career in the music industry.
Respondent’s grounds are that (1) petitioner’s expenditures were
not part of an activity engaged in, by petitioner, for profit and
(2) with regard to certain of those expenditures, there was no
substantiation. At trial, respondent’s case-in-chief was
relatively brief. Respondent relies primarily on petitioner’s
inability to show entitlement to the Schedule C deductions.
In pertinent part, Rule 142(a)(1) provides the general rule
that “[t]he burden of proof shall be upon the petitioner”. In
certain circumstances, however, if the taxpayer introduces
credible evidence with respect to any factual issue relevant to
ascertaining the proper tax liability, section 7491 places the
burden of proof on the Commissioner. Sec. 7491(a)(1); Rule
5(...continued)
$9,721 deduction for unreimbursed employee business expenses
relates to petitioner’s expenditures for that clothing.
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Last modified: May 25, 2011