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prepare her tax returns, and she failed to furnish that help with
the “necessary information” to file proper and timely returns.
Respondent in his brief states: “It is evident petitioner failed
to do so because she was unable to adequately reconstruct her
expenses”. We disagree. It simply does not follow from
petitioner’s failure to reconstruct completely her Schedule C
expenses at trial that she failed to maintain adequate records or
that she failed to hire competent help as respondent suggests.
Petitioner conceded at trial that she did not maintain
formal books of account such as a general ledger or a cash
receipts and disbursements journal. However, petitioner
maintained voluminous records of her income and expenses, as she
amply demonstrated at trial. We are convinced that the
evidentiary gaps in the record, including the lack of
documentation regarding petitioner’s NOL carryforwards, are not
the result of negligent record keeping, as respondent alleges,
but are due to petitioner’s financial and personal difficulties
that arose following the years at issue. For example, petitioner
testified that she had other records such as client and bank
records, which would have enabled her to fill the evidentiary
gaps, but she simply did not have the financial and personal
resources to retrieve the records from storage and analyze those
records under the circumstances. We have no doubt, however, that
such records exist.
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