Kelvin & Arlene Jackson - Page 27




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          the taxpayer’s experience, knowledge, and education.  Sec.                  
          1.6664-4(b)(1), Income Tax Regs.  Generally, the most important             
          factor is the extent of the taxpayer’s effort to assess his or              
          her proper tax liability.  Stubblefield v. Commissioner, T.C.               
          Memo. 1996-537; sec. 1.6664-4(b)(1), Income Tax Regs.                       
               Petitioners are no strangers to the section 6662(a)                    
          accuracy-related penalty.  This Court sustained respondent’s                
          determination that petitioners were liable for the section                  
          6662(a) penalty for taxable year 2002 because of “their failure             
          to maintain and produce the required documentation to support               
          their deductions”.  Jackson v. Commissioner, T.C. Memo. 2005-159.           
               On Schedule C of their 2000 joint Form 1040, petitioners               
          fully deducted startup costs incurred in 1998 and 1999 for Hansie           
          Productions instead of amortizing the expenditures over a period            
          of at least 60 months.  The instructions to Schedule C clearly              
          state that startup expenditures must be amortized.  See 2000                
          Instructions for Schedule C, Profit or Loss From Business,                  
          General Instructions, Other Schedules and Forms You May Have to             
          File, and Part V Specific Instructions, Other Expenses; 2000                
          Instructions for Form 4562, Part VI--Amortization, Line 40.                 
               Additionally, petitioners fully deducted the cost of office            
          furniture and equipment they purchased in 2000, some of which               
          they admitted was for personal use, without making the                      
          appropriate election under section 179.  The instructions to                







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Last modified: March 27, 2008