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According to petitioners, their hectic work schedules
precluded them from filing timely individual tax returns for the
years 1993 through 1995. Petitioners’ 1993, 1994, and 1995
returns were not received by respondent until December 30, 1996,
and then each was followed by an “amended” or “revised” version.
In addition to filing multiple versions of untimely tax
returns, petitioners repeatedly failed to respond timely and
adequately to respondent’s numerous requests for information and
documentation during the examination. Petitioners attribute
these failures to their busy work and travel schedules.
Petitioners complain of respondent’s practice of issuing multiple
IDRs for the same information, but ignore their own behavior as
the reason for such multiple requests.
Nothing introduced at the hearing establishes that
respondent’s agents improperly or unreasonably failed to accept
adequate substantiation for the deductions in dispute. Many of
petitioners’ claimed business expense deductions were for travel
and entertainment. As previously noted, that type of expense is
subject to strict substantiation requirements to be allowed as a
deduction. As best as can be determined from the hearing record,
petitioners provided little substantiation with respect to much
of their travel and entertainment expense deductions. For
example, petitioners provided only business cards to substantiate
the business purpose of some claimed travel expenses.
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Last modified: November 10, 2007