Norman John Haas III and Susan Renee Haas - Page 13

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              Petitioners have offered no evidence to show that the                   
         replacement of the engine and tires of the truck was a result of             
         theft damage rather than the 150,000 miles accumulated before the            
         truck was stolen.  See Newton v. Commissioner, 57 T.C. 245, 248-             
         249 (1971); Leslie v. Commissioner, T.C. Memo. 1984-61.  Nor have            
         petitioners shown that the replacement of the engine and tires               
         did not exceed the damage or cause the truck to be restored to a             
         condition better than that which it was in immediately before the            
         theft.  See sec. 1.165-7(a)(2)(ii), Income Tax Regs.  They                   
         provided no evidence regarding the replacement of the stereo and             
         “glass”.  Among the receipts presented by petitioners, however,              
         is one for $354.75 for the repair of the seats of the truck.  The            
         Court accepts the receipt as evidence of damage to the truck as a            
         result of the theft, and the amount on the receipt is deductible             
         to the extent permitted by section 165(h)(1) and (2).                        
         The Accuracy-Related Penalty Under Section 6662                              
              Section 7491(c) imposes the burden of production in any                 
         court proceeding on the Commissioner with respect to the                     
         liability of any individual for penalties and additions to tax.              
         Higbee v. Commissioner, 116 T.C. 438, 446 (2001); Trowbridge v.              
         Commissioner, T.C. Memo. 2003-164, affd. 378 F.3d 432 (5th Cir.              
              In order to meet the burden of production under section                 
         7941(c), the Commissioner need only make a prima facie case that             

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