- 14 -
Nigeria in January of 2002 with the intention of never returning
to the United States. See sec. 1.871-5, Income Tax Regs.
With respect to Raphael Nwankwo, we conclude that he never
intended to become a U.S. citizen and that he abandoned any
resident status that he may have otherwise attained in the 3
years prior to his departure. Accordingly, irrespective of our
finding that petitioners did provide more than half of his total
support in 2002, we must sustain respondent on this issue.
2002 Schedule C Expenses
As stated in the notice of deficiency for 2002, respondent
disallowed part of petitioners’ claimed Schedule C expense
deductions because petitioners failed to “keep adequate records
and documentary evidence to substantiate” these expenses.
Despite their lack of substantiation, respondent afforded
“consideration” for petitioners’ depreciation, and repairs and
insurance expenses, allowing petitioners 60 percent of their
claim. Respondent, however, disallowed some of petitioners’
deductions for legal and professional fees, travel expenses,
employee benefit program expenses, repair and maintenance
expenses,“other expenses”, including uniforms and dry cleaning
and telephone, and commissions and fees for “lack of adequate
records and documentary evidence.”
Section 162 allows “as a deduction all the ordinary and
necessary expenses paid or incurred during the taxable year in
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011