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business expenses under section 274(d). While petitioner
submitted various rental car receipts, restaurant receipts, and
credit card statements, he has failed to introduce any evidence
to establish a business purpose for the claimed expenses.7 There
is no evidence such as calendar entries or other
contemporaneously prepared logs to substantiate that these
expenses were directly connected with petitioner’s insurance
activity. Further, the credit card statements were in
petitioner’s individual name, and not his company’s name.
Accordingly, we hold that petitioner is not entitled to deduct
expenses in connection with his insurance activity.
E. Additions to Tax
1. Section 6651(a)(1)
Section 6651(a)(1) provides an addition to tax for a failure
to file a return on or before the specified filing due date
unless it is shown that such failure is due to reasonable cause
and not due to willful neglect. Once the Commissioner meets his
initial burden of production to show that the addition to tax is
appropriate, the taxpayer bears the burden of proving his failure
to file timely the required return did not result from willful
neglect and that the failure was due to reasonable cause. Higbee
v. Commissioner, 116 T.C. 438, 447 (2001).
7 The receipts were submitted to the Court in a posttrial
supplemental stipulation of facts. Petitioner did not provide
any testimony of their business purpose at trial.
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