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The third requirement is not met because respondent did not
treat petitioners’ failure to claim depreciation deductions
inconsistently at any time.
We conclude that the mitigation provisions do not apply.
E. Whether Petitioners Are Entitled to Larger Deductions for
Other Expenses Than Respondent Allowed
Petitioners reported other deductions on Forms 1120S for
King’s Appliances, Inc., for 1996-98, including worker’s
compensation, freight, contract delivery, postage, employee
taxes, credit card service charges, insurance, utilities,
supplies, and office expenses. Respondent determined that these
deductions should be decreased by $433 for 1996, increased by
$41,600 for 1997, and decreased by $738 for 1998. Petitioners
contend that they may deduct $28,063 more than they reported for
1996, $38,405 more than they reported for 1997, and $10,108 more
than they reported for 1998 based on their computer-generated
general ledger. Petitioners contend that respondent has accepted
some of the figures in their computerized general ledger and thus
must accept all the figures in it. We disagree.
Petitioners did not offer in evidence their computerized
general ledger, testimony, or documentary evidence supporting
these claims. We sustain respondent’s determination relating to
these deductions for 1996-98.
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