- 11 -
taxpayer must show that the expense was incurred primarily to
benefit his business, and there must have been a proximate
relationship between the claimed expense and the business. See
Walliser v. Commissioner, supra.
Petitioner provided no business records or other evidence
that he resold tickets to anyone other than to one person for “2
Nights Enron Box”. Petitioner has not provided sufficient
evidence to show that there was a business or that the claimed
expenses were paid primarily for business reasons.
Section 183(b)(2) permits a deduction for expenses that
would be deductible only if the activity were engaged in for
profit, but only to the extent that the gross income derived from
the activity exceeds the deductions allowed by section 183(b)(1).
Petitioner is entitled to the deductions allowed by section
183(b)(2) for his luxury suite activity.
Additions to Tax
Respondent bears the burden of production with respect to an
addition to tax. Sec. 7491(c). In order to meet this burden,
respondent must produce evidence sufficient to establish that it
is appropriate to impose the addition to tax. Higbee v.
Commissioner, 116 T.C. 438, 446-447 (2001).
Addition to Tax Under Section 6651(a)(1)
Respondent produced a certified copy of Form 4340 showing
that the IRS has no record of petitioner’s having filed a Federal
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011