- 3 -
The dispute over the Obots’ Schedule A is confined to their
attempted deductions for taxes paid:3
County of Erie--county and town tax $1,433
Real property tax and sewer rent bill 734
Public user fee 155
Water bill 128
Utilities, phone, gasoline, sewer, etc. 1,021
Personal property taxes 1,634
Unsubstantiated balance 114
The Commissioner also challenged a number of deductions for
grocery store expenses that the Obots took on their Schedule C:
Supplies $2,248
Advertising 2,343
Cost of goods sold 7,545
Legal/professional 1,282
Other expenses 655
And, finally, the Commissioner challenged most of the Obots’
Schedule E expenses on their rental property:
Depreciation $1,200
Repairs 2,893
Management fees 3,200
Utilities 1,413
The Trial
In deciding whether a taxpayer has substantiated his
deductions, we ordinarily look at the proof he offers in the form
of documentation and testimony. In Mr. Obot’s case, we can
3 Originally, the IRS allowed taxes paid deductions of only
$6,651 on Schedule A and $1,750 on Schedule C. The Obots have
since substantiated payments of local property tax bills for
$1,432.19 on their Schedule A, and a $100 advertising expense
deductible on their Schedule C, and the Commissioner concedes
those amounts.
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Last modified: May 25, 2011