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Respondent contends that petitioners have not shown that the
expenses were not previously allowed or that the expenses were
incurred in 2001.
1. Advertising Expenses
Petitioners claimed on Schedule C of their joint 2001 Form
1040 an advertising expense of $2,670, which respondent allowed.
Petitioners then presented to respondent the night before trial
several Amazon.com invoices totaling $1,929.38.18 Internal
Revenue Agent David Irving, who conducted petitioners’ audit,
testified at trial that the Amazon.com invoices substantiated a
portion of the advertising deduction claimed and allowed on
petitioners’ 2001 Schedule C. Petitioners have not shown that
the Amazon.com invoices were not included in deductions
previously allowed. Accordingly, the Court concludes that
petitioners are not entitled to a Schedule C deduction on their
2001 tax return for Amazon.com advertising expenses in excess of
the $2,670 advertising expense allowed by respondent.
18Petitioners presented the following 11 Amazon.com invoices
that listed Hansie Productions as the vendor: (1) dated Feb. 28,
2001, in the amount of $203.97; (2) dated Mar. 31, 2001, in the
amount of $384.73; (3) dated Apr. 30, 2001, in the amount of
$217.43; (4) dated May 30, 2001, in the amount of $40.55;
(5) dated June 30, 2001, in the amount of $170.32; (6) dated July
31, 2001, in the amount of $95.34; (7) dated Aug. 31, 2001, in
the amount of $80.93; (8) dated Oct. 31, 2001, in the amount of
$40; (9) dated Nov. 30, 2001, in the amount of $82.83; (10) dated
Dec. 29, 2001, in the amount of $613.28; and (11) dated Jan. 31,
2002, which makes it irrelevant to taxable year 2001, in the
amount of $567.41. The total amount paid to Amazon.com in
taxable year 2001 was $1,929.38.
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