Ragnhild A. Westby - Page 13

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               Before the trial in this case commenced, petitioner again              
          produced for review by respondent’s employees, including a                  
          revenue agent and an Appeals officer, voluminous records in                 
          support of the Schedule C deductions claimed on her returns for             
          the years at issue.  Respondent’s review of petitioner’s records            
          resulted in the preparation of itemized lists of some of                    
          petitioner’s canceled checks, credit card expenditures, and                 
          receipts.  The lists were revised on several occasions and                  
          admitted into evidence during trial.  The lists were prepared               
          without any reference to the categorization of expenses claimed             
          on petitioner’s Schedules C for the years at issue because                  
          respondent claimed that he could not tell how petitioner’s                  
          expenses were grouped for reporting purposes on petitioner’s                
          returns.                                                                    
               At the beginning of trial, respondent conceded that                    
          petitioner had deductible Schedule C expenses for the years at              
          issue in the following amounts:                                             
                    Year             Amount         Exhibit No.                       
                    1987          1$50,184.70          38-R                           
                    1988           64,442.41           39-R                           
                    1989           77,162.01           40-R                           
                    1990           73,632.74           41-R                           
               1Respondent used a subtotal ($11,144.18) instead of the                
          total ($12,034.71) from Sec. B of Ex. 38-R in calculating the               
          amount of Schedule C expenses he conceded for 1987 ($49,294.17).            
          Following trial, respondent conceded additional Schedule C                  
          deductions for each of the years at issue as follows:                       





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