- 11 -
as well as his attorney’s statement detailing the expenses and
fees incurred, and some court documents.
Petitioner claimed on Schedule C $3,323 for cost of goods
sold (CGS). The notice of deficiency disallowed $659 of
petitioner’s claimed CGS. Petitioner’s CGS consisted of $2,833
of computer hardware and $490.39 of computer software.
Petitioner provided substantiation for $58.80 in computer
software receipts and was allowed a software CGS for that amount.
Petitioner’s Register Report listed computer hardware items and
the dates they were purchased, which respondent considered when
he allowed $2,605 of petitioner’s claimed hardware items CGS.
Respondent disallowed the balance of the claimed CGS for lack of
substantiation and because the items were allegedly used as
capital assets and not inventory.8
On his 1997 Form 1040, petitioner used his San Diego
address. On his 2001 and 2002 Forms 1040, petitioner listed
“2330 Candle Ridge Trail, Georgetown, TX 78626" (Georgetown,
Texas, address) as his address.
Form 872, Consent to Extend the Time to Assess Tax, for
petitioner’s 2000 taxable year was signed by petitioner on
8The cursory revenue agent’s report does not clearly
identify which hardware items were disallowed. Based on the
total dollar amount disallowed of $228 ($659 total CGS
disallowance minus $431 software disallowance), it appears the
items were: (1) “16MB FLASH” for $70; (2) floppy drive for $65;
(3) “RAM, zipdrive” for $23; and (4) a 56K modem for $70.
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: November 10, 2007