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trade or business requires an examination of the facts and
circumstances of each case. Higgins v. Commissioner, 312 U.S.
212, 217 (1941); see also Commissioner v. Groetzinger, supra at
36.
Respondent contends that petitioners were not in a trade or
business within the meaning of section 162. Petitioners contend
that they were in a trade or business entitled “Membership Sales
and Prepaid Legal Services”. However, petitioners offered no
evidence other than the Schedule C and self-serving testimony
regarding their business.
A tax return is merely a statement of a taxpayer’s position
and is not evidence of the correctness of the figures and
information contained therein. Wilkinson v. Commissioner, 71
T.C. 633, 639 (1979). Moreover, the Court is not required to
accept petitioners’ unsubstantiated testimony. See Wood v.
Commissioner, 338 F.2d 602, 605 (9th Cir. 1964), affg. 41 T.C.
593 (1964).
As petitioners reported no gross receipts on the Schedule C
other than the bartering income and offered no documentary
evidence whatsoever of the conduct of a business, we conclude
that petitioners did not use the program in a trade or business,
and petitioners are not entitled to a section 162 deduction for
their subscription to the program.
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Last modified: May 25, 2011