Elizabeth Giles - Page 16

                                       - 16 -                                         
          necessary business expenses.  Respondent disallowed petitioner’s            
          Schedule C losses of $22,777 and $17,649 for 1999 and 2000,                 
          respectively.  Respondent also disallowed petitioner’s Schedule C           
          expenses of $19,791 for 2001.  Respondent determined deficiencies           
          of $7,117, $5,470, and $6,793 for 1999, 2000, and 2001,                     
          respectively.  In addition, respondent determined petitioner was            
          liable for accuracy-related penalties under section 6662(a) for             
          the years in issue.                                                         
               On September 9, 2003, petitioner filed a petition with the             
          Court disputing the notice of deficiency.                                   
                                       OPINION                                        
          A.   Petitioner’s Horse Activity                                            
               The first issue for decision is whether petitioner’s horse             
          activity was an activity engaged in for profit within the meaning           
          of section 183 during the years in issue.9                                  
               Section 183(a) provides that if an individual engages in an            
          activity but does not engage in that activity for profit, “no               
          deduction attributable to such activity shall be allowed under              
          this chapter except as provided in this section.”  In the case of           

               9  Generally, a taxpayer bears the burden of proving the               
          Commissioner’s determinations incorrect.  Rule 142(a)(1); Welch             
          v. Helvering, 290 U.S. 111, 115 (1933).  However, under sec.                
          7491(a), the burden of proof may shift to the Commissioner in               
          certain situations.  Petitioner contends that sec. 7491(a)                  
          requires respondent to bear the burden of proof.  We need not               
          decide this issue because our findings and analysis in this case            
          are based on the record before the Court and do not depend on               
          which party bears the burden of proof.                                      





Page:  Previous  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  Next

Last modified: May 25, 2011