Michael D. and Christine R. Alexander - Page 7

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          items of clothing.  Petitioners required their children to pay              
          for such items because they wanted to instill a strong work ethic           
          in them.                                                                    
              Petitioners reported gross receipts of $4,900 for the dog-             
          breeding business on a separate Schedule C.  Petitioners claimed            
          expense deductions for the business totaling $16,007, of which              
          amount $12,750 represented payments to their daughters.  There is           
          no indication petitioners issued a Form W-2 to any of their                 
          daughters.  Respondent disallowed $12,295 of the claimed wage               
          expense deduction.  It is not clear why respondent allowed the              
          remaining $455.                                                             
               In general, the Commissioner’s determinations set forth in a           
          notice of deficiency are presumed correct, and the taxpayer bears           
          the burden of showing that the determinations are in error.  Rule           
          142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).  Pursuant             
          to section 7491(a), the burden of proof as to factual matters               
          shifts to respondent under certain circumstances.  We decide this           
          case without regard to the burden of proof.  Accordingly, we need           
          not decide whether section 7491(a) applies in this case.5                   
               A taxpayer who is carrying on a trade or business generally            
          may deduct ordinary and necessary expenses paid or incurred in              

               5 Petitioners filed a motion to shift the burden of proof to           
          respondent.  Because the burden of proof does not affect the                
          outcome of this case, that motion was denied.                               

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