Donald P. and Margie C. Osborne - Page 2
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2001 and 2002; (3) petitioners failed to report gross income
relating to 2001 and 2002; and (4) petitioners are liable for
section 6662(a)1 accuracy-related penalties.
FINDINGS OF FACT
Petitioner Donald Osborne (Mr. Osborne) was a self-employed
truck driver. In addition, he maintained a business, Don Osborne
Enterprises, which rented trailers and bought and sold over-the-
road trucks and trailers. On his Schedules C, Profit or Loss
from Business, relating to 2001 and 2002, Mr. Osborne combined
income and expenses relating to these activities and claimed
expense deductions for depreciation, insurance, interest,
supplies, tax and licenses, travel, and other expenses.
In 2004, petitioners’ 2001 and 2002 returns were selected
for audit, and respondent’s Revenue Agent Mary Miller began an
examination of the items on the returns. To substantiate their
expense deductions, petitioners submitted canceled checks, credit
card statements, insurance records, and other documentation.
Petitioners were given credit for the expenses that were properly
substantiated. Using canceled checks and vehicle title
information for Mr. Osborne’s business, Ms. Miller made
adjustments to the inventory, cost of goods sold, and depreciable
1 Unless otherwise indicated, all section references are
to the Internal Revenue Code of 1986, as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
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Last modified: March 27, 2008