- 15 - burden of proof except with respect to the fraud penalty. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). C. Whether Petitioners May Deduct More for Schedule C Expenses Than Respondent Allowed 1. Advertising Expenses Petitioners deducted advertising expenses of $575 for 1999 and $7,500 for 2000 on the Schedules C for petitioner’s consulting activity. Petitioner testified that the cost of printing his business cards is deductible as an advertising expense. However, petitioners did not show how much petitioner had paid to have business cards printed. Petitioners’ $7,500 advertising expense deduction for 2000 is based on their claim (which we have rejected) that petitioner paid that amount to Special Friends. We conclude that petitioners may not deduct any amount for advertising expenses for 1999 or 2000. 2. Legal and Professional Expenses Petitioners deducted legal and professional expenses of $5,500 for 1999, $59,727 for 2000, and $2,000 for 2001 on the Schedules C for petitioner’s consulting activity. Petitioner paid $5,500 to the Nelson Hesse law firm for representing him in his lawsuit against TruGreen. That payment was not related to petitioner’s consulting activity.2 2 Respondent conceded that petitioners may deduct the $5,500 payment to the Nelson Hesse law firm as an itemized deduction for 1999.Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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