-36- b. Other Expenses Petitioners argue that they have substantiated the $18,719 claimed as “other expenses” through the introduction of Exhibits 119-P and 120-P. We disagree. Exhibit 119-P was received into evidence through the parties’ stipulation that the exhibit reflects “documents which Petitioners contend pertain to other expense for taxable years 1997”. Exhibit 120-P was received into evidence through the parties’ stipulation that the exhibit reflects “documents which Petitioners contend pertain to the bank deposit analysis”. Together, Exhibits 119-P and 120-P have approximately 110 pages, and the “documents” included therein (mainly canceled checks, bank statements, and receipts) do not persuade us that the expenses reflected therein are properly deductible by petitioners. Nor do petitioners in their posttrial opening brief persuade us that they have satisfied the requirements for deductibility; petitioners’ entire argument in brief as to this point is as follows: The deduction taken of $18,719 has been adequately substantiated (Exh 119-P and 110-P). Natures Touch as a sole proprietorship during the first 10 months of 1997 was an accrual taxpayer. Expenses budgeted to begin the Carlsbad store location were accrued by the sole proprietorship. This is an issue that Respondents 14(...continued) as well as her statement of any purported business meal that she purchased on that day along with the identity of the person with whom she dined. We give little weight to the “expense record”. We note that the expenses reflected in many of the invoices in Exhibit 112-P do not appear on Michelsen’s expense record.Page: Previous 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 NextLast modified: November 10, 2007