- 13 -
activity was conducted neither for profit nor as a business
operation.
Other Schedule C Activities
There were no sales of timber or firewood with respect to
petitioner’s timber and firewood sales activity for 1994 because
“the thing fell apart”. His “venture capital” health food and
resort enterprise “never got off the ground.” The only items in
petitioner’s possession to show his involvement in an oil and gas
venture were copies of two uncleared checks that he showed to
respondent’s counsel before trial. These three activities appear
never to have reached the operational stage. As with
petitioner’s automobile restoration activity, startup or
preopening expenses are not deductible under either section 162
or section 212. Hardy v. Commissioner, supra; Goodwin v.
Commissioner, supra at 433; Polachek v. Commissioner, supra at
863. Deduction of such expenses, even if substantiated, is
specifically denied by section 195(a).
Additions to Tax Under Section 6651(a)
Respondent bears the burden of production with respect to
any addition to tax. Sec. 7491(c). In order to meet this
burden, respondent must produce evidence sufficient to establish
that it is appropriate to impose the addition to tax. Higbee v.
Commissioner, 116 T.C. 438, 446-447 (2001).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: November 10, 2007