Garrett Lawrence Bailey - Page 15

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          statement in his petition that he was contesting the validity of            
          all the tax liabilities at issue in this case, petitioner did not           
          argue at trial or in his posttrial briefs that respondent’s                 
          determination for 1999 was incorrect.  Petitioner also failed to            
          introduce any evidence at trial regarding his 1999 tax liability.           
          Accordingly, we conclude that petitioner has abandoned his                  
          challenge to his 1999 tax liability.  See, e.g., Bradley v.                 
          Commissioner, 100 T.C. 367, 370 (1993); Rybak v. Commissioner, 91           
          T.C. 524, 566 n.19 (1988).                                                  
          II.  Petitioner’s Challenge to Respondent’s Determination To                
               Proceed With the Collection Action                                     
               In addition to his argument that respondent’s proposed                 
          collection action is overly intrusive because the assessments of            
          petitioner’s tax liabilities are incorrect, petitioner argues               
          that he should have been allowed to submit an offer-in-                     
          compromise.8  We review respondent’s determination to proceed               
          with collection for abuse of discretion.  Sego v. Commissioner,             
          114 T.C . at 610.                                                           

               8Even if we had concluded that petitioner could challenge              
          the validity of his 1995 and 1996 tax liabilities in this                   
          proceeding, petitioner would still not have prevailed.  The                 
          documentation in the record upon which petitioner relied to                 
          substantiate his Schedule C expenses was not sufficient to prove            
          that the expenses were deductible.  Petitioner paid most of the             
          expenses in connection with his efforts to start several new                
          businesses during 1995 and 1996.  Startup expenses resulting in             
          an active trade or business generally are not deductible for a              
          year earlier than the one in which such business begins.  Sec.              
          195.  Petitioner’s car expenses also were not deductible because            
          petitioner failed to satisfy the substantiation requirement of              
          sec. 274(d).                                                                





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