- 18 -
also fail to specify the respective amounts of Mr. Hopkins’s S
Corporation’s claimed advertising expense deduction of $3,130 and
Mr. Hopkins’s S Corporation’s claimed promotional expense deduc-
tion of $39,000, which when added to the $3,772 of advertising
and promotional expenses that respondent allowed Mr. Hopkins’s S
Corporation as a deduction, are reasonable under section
162(a).21
Based upon our examination of the entire record in this
case, we find that petitioners have failed to carry their burden
of establishing that Mr. Hopkins’s sole proprietorship and Mr.
Hopkins’s S Corporation are entitled for 1999 to any advertising
and/or promotional expense deductions under section 162(a) in
excess of the respective advertising and/or promotional expense
deductions that respondent allowed those businesses.
We turn next to the determination in the notice that peti-
tioners are liable for 1999 for the accuracy-related penalty
under section 6662(a). Respondent determined that petitioners
are liable for that penalty because of: (1) Negligence or
disregard of rules or regulations under section 6662(b)(1) or
(2) a substantial understatement of tax in petitioners’ 1999
joint return under section 6662(b)(2).
20(...continued)
See Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930);
see also Norgaard v. Commissioner, 939 F.2d 874, 879 (9th Cir.
1991), affg. in part and revg. in part T.C. Memo. 1989-390.
21See supra note 20.
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011