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language following section 162(a)(3) provides that "the taxpayer
shall not be treated as being temporarily away from home during
any period of employment if such period exceeds 1 year."
Mr. Ferrada testified that his employment as an Air Force
contractor was indefinite. Petitioner was employed at the same
project at Lake Charles for more than 1 year. Thus, his tax home
is at his principal place of business, Lake Charles, Louisiana,
not Del Rio, Texas. As such, the $11,180 petitioners paid to
rent an apartment in Lake Charles is a personal expense and
nondeductible under section 262(a).
Petitioners failed to keep records to substantiate the
deductions they claimed on their return. Additionally,
petitioners failed to prove that any of the expenditures they
reported on their Schedule C were ordinary and necessary business
expenses. Respondent's determination disallowing petitioners'
Schedule C deductions is sustained.
Addition to Tax for Failure To File Timely
Under section 7491(c), the Commissioner has the burden of
production in any court proceeding with respect to the liability
of any individual for any penalty or addition to tax. Higbee v.
Commissioner, 116 T.C. 438, 446-447 (2001). In order to meet his
burden of production, respondent must come forward with
sufficient evidence indicating that it is appropriate to impose
addition to tax for failure to file a timely return. Id. at 446.
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Last modified: May 25, 2011