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testimony, or were simply generic receipts devoid of identifying
information such as the name of the vendor or the provider of
services.
Petitioner claims she used cash to pay a substantial portion
of the reported expenses of Packs to Go. We assume that this was
part of the reason she was unable to substantiate most of her
reported expenses. However, we are mindful that even expenses for
which petitioner claims to have written checks were not adequately
substantiated. No canceled checks or bank records of any kind
were submitted. This lack of record keeping is inconsistent with
the conduct of a bona fide trade or business.
In sum, as stated above, we conclude that Packs to Go did not
constitute a trade or business for which petitioner is entitled to
Schedule C deductions. Furthermore, for the most part, petitioner
did not substantiate the expenses she reported in connection with
her Packs to Go activity. To the extent petitioner was able to
produce substantiation of any expenses, we find that they were
personal expenses rather than Schedule C business expenses. Thus,
we sustain respondent’s denial of deductions for Packs to Go as a
trade or business.
Respondent seeks an addition to tax under section 6651(a)(1).
The Commissioner bears the burden of production regarding the
additions to tax. Sec. 7491(c); Higbee v. Commissioner, 116 T.C.
438 (2001). In order to meet this burden, the Commissioner must
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