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Rules of Practice and Procedure, and all section references are
to the Internal Revenue Code in effect for the years in issue.
Background
When they petitioned the Court, petitioners resided in
Florida.
Petitioners filed joint Federal income tax returns for the
years at issue. In the notice of deficiency, respondent
disallowed the following amounts of deductions that petitioners
claimed on their returns:1
2001 2002 2003
Itemized deductions $480,776 $12,419 $26,015
Business expenses 61,632 1,065,543 64,931
Theft/destruction of 36,000 1,500,000 --
property losses
Moving expenses -– 41,952 --
Petitioners timely petitioned this Court. At the time of
trial, the parties had entered into no stipulations, contrary to
Rule 91(a) and the Court’s standing pretrial order. Petitioners
also failed to comply with the Court’s order, dated May 8, 2006,
granting respondent’s motions to compel production of documents
and to compel responses to interrogatories. The case was
1 In the notice of deficiency, respondent also determined
that petitioners had unreported dividend income of $113 and $248
for 2001 and 2003, respectively, and unreported interest income
of $16 for 2002. Respondent also determined that petitioners
owed $30 additional tax for the early distribution of retirement
income pursuant to sec. 72(t). Petitioners have not assigned
error to these determinations either in their pleadings or at
trial. Consequently, we sustain respondent’s determinations as
to these items.
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Last modified: March 27, 2008