Alvin S. Kanofsky - Page 19

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          expense deduction for preoperating expenses to be indicative of             
          the fact that petitioner’s position was not unreasonable and,               
          therefore, not negligent; and that, in any event, petitioner                
          acted in good faith and with reasonable cause in treating the               
          expenses listed on his 1997 Schedule C as ordinary and necessary            
          business expenses under section 162(a).  See sec. 1.6664-4(b)(1),           
          Income Tax Regs.; see also Keller v. Commissioner, T.C. Memo.               
          1996-300 (college professor who improperly claimed a travel                 
          expense deduction for a sabbatical trip during which he engaged             
          in study unrelated to the stated sabbatical purpose acted in good           
          faith and was not liable for the accuracy-related penalty where             
          there were no regulations or other forms of clear-cut guidance              
          specifying the reach of section 274(m)(2), which denies a                   
          deduction for the expense of travel as a form of education).                
               Nor do we agree with respondent that negligence and                    
          intentional disregard are shown by petitioner’s alleged failure             
          to maintain and produce books and records to support his claimed            
          Schedule C deductions as required by section 6001.  It is not               
          always necessary that a taxpayer maintain a formal set of readily           
          auditable books in order to satisfy the books and records                   
          requirement of section 6001 and section 1.6001-1(a), Income Tax             
          Regs.  See Westby v. Commissioner, T.C. Memo. 2004-179.  At                 


               10(...continued)                                                       
          background (other than in the preparation of his own returns) in            
          the area of Federal income taxation.                                        




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