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property (Property A) and $40,416 in Schedule E expenses for the
South Vernon Avenue property (Property B). Respondent disallowed
in the notice of deficiency all of the claimed expenses
pertaining to Property B and pleaded in the answer that
petitioners were not entitled to any of the claimed expenses with
respect to Property A. We sustain respondent’s determination
with respect to Property B and hold that respondent has met the
burden of proof with respect to Property A, on the basis of the
facts hereinafter discussed.
Section 6001 provides, in pertinent part, as follows:
SEC. 6001. NOTICE OR REGULATIONS REQUIRING RECORDS,
STATEMENTS, AND SPECIAL RETURNS.
Every person liable for any tax imposed by this
title [title 26, Internal Revenue Code of 1986], or
for the collection thereof, shall keep such records,
render such statements, make such returns, and comply
with such rules and regulations as the Secretary may
from time to time prescribe. * * *
Petitioners provided no receipts to substantiate any of the
expenses claimed for either Property A or B. For example, Mrs.
Burkley admits that they did not spend $350 to advertise either
Property A or B for rent and that, in the case of Property A, no
advertising of any kind was necessary since their daughter took
possession of that property immediately after they moved to
Property B. Mrs. Burkley acknowledged that $700 claimed for auto
and travel expenses was arbitrarily arrived at. Mrs. Burkley
testified that the $2,000 claimed for cleaning expenses for
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Last modified: March 27, 2008