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c. Repairs and Improvements
Petitioners contend that they may deduct from the $17,995
amount $3,200 for repairs and improvements. We disagree.
Petitioners have failed to show that they paid those amounts or
that those amounts were ordinary and necessary expenses of Mr.
Arnold’s leased payroll activity.6
d. Conclusion
Petitioners have not shown that they are entitled to deduct
any amount from the $17,995 they received from Pacific because of
Mr. Arnold’s leased payroll activity.
D. Whether Petitioners Are Liable for the Accuracy-Related
Penalty
Petitioners contend that they are not liable for the
accuracy-related penalty under section 6662(a) because they
6 In their reply brief, petitioners request that we reopen
the record to admit into evidence (1) documents stating that they
paid $3,200 for repairs and improvements and (2) schedules
relating to their claims of double taxation of income, illegal
seizures, and failure to issue refunds.
A court generally will not reopen the record unless the
evidence relied on probably would change the outcome of the case.
Butler v. Commissioner, 114 T.C. 276, 287 (2000). The documents
stating that petitioners paid $3,200 for repairs and improvements
would probably not change the outcome of these cases because they
do not purport to show that they were ordinary and necessary
expenses of Mr. Arnold’s leased payroll activity. The schedules
probably would not change the outcome of these cases because the
data in the schedules is uncorroborated. Petitioners do not
explain why they did not offer these documents into evidence at
trial. It is not appropriate to reopen the record under these
circumstances.
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