- 5 -
Petitioners filed a Schedule C with their joint Federal
income tax return for taxable year 1994. The Schedule C, which
named petitioner as the proprietor of a business engaged in
“information services”, listed the following gross receipts and
deductions:
Gross receipts -0-
Car and truck expenses $4,606
Depreciation and section 179 expense 13,930
Employee benefit programs 7,897
Legal and professional services 6,379
Office expense 15,188
Supplies 2,936
Travel 9,443
Meals and entertainment 2,815
Utilities 3,706
Home office expense 22,169
Net loss (89,069)
Taking into account the Schedule C loss, petitioners reported
adjusted gross income of negative $80,020 and zero tax liability
for 1994. Petitioners also filed a Form 1045, Application for
Tentative Refund, on which they requested a tentative refund for
1991 on account of a net operating loss (NOL) carryback from 1994
to that year of $81,923. Respondent issued petitioners a refund
of $26,783 in accordance with this request.
In the notice of deficiency, respondent determined that
petitioners are not entitled to deduct the $89,069 claimed as
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011