Philip J. Oct 12, 2009 Daleville, Alabama TO: E. Wayne Wilson IRS Appeals Office Affidavit of expense and deductions 1835 Assembly Street, Suite 508 Columbia, SC 29201
RE: Philip J. vs. Commissioner of Internal Revenue Docket # ###
Taxpayer above-named hereby submits his affidavit as a true approximation of his unreimbursed business expenses, deductions, credits, etc.
1. This reconstruction is based upon the Cohen Case. The Circuit Court of Appeals ruled in Cohen v. CIR, 266 F2d 5 (1959): that in tax court, taxpayer can use reasonable figures, instead of figures conjured by the IRS that cannot be correct. Taxpayer can also reconstruct lost paperwork to substantiate this deductions and business expenses.
The 9th Circuit Court ruled in Cohen v. CIR, 266 F 2d 5(1959):
''We think our only proper course is to approach the problem indirectly by analysis of the record in the light of the principles established in Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930). Our objective will be, after resolving any reasonable doubts against petitioner, to reconstruct his gross income as betting commissioner at a figure which in our judgment it would be unlikely to exceed in fact.”
2. The IRS is authorized by Congress only to collect taxes that are actually due. The Tax Court has a duty to find the taxes that are in fact owed. Petitioner has a small and unstable income, and also has unreimbursed schedule A deductions. Only the amount is unknown.
3. Petitioner due to no fault of his own does not have adequate books and records to substantiate his business expenses, deductions, etc. Taxpayer is neither a lawyer nor a CPA and has no legal or tax education training. He is a simple working person.
This citizen of this great country, Petitioner does not understand the internal revenue laws or regulations. He finds the IR code to be incomprehensible. Since he is unable to fill out his tax return, he must hire tax professionals.
4. For the tax year in question, taxpayer hired a tax professional to assist him in tax related matters. Petitioner followed the advice of his paid tax advisor, Taxpayer faced with an incomprehensible tax system has a right to rely upon tax professionals.
5. Petitioner does not know enough about the tax code to determine if his advisor was competent or leading him astray.
6. Taxpayer does not have the necessary records to substantiate his business records and deductions but must reconstruct them under the Cohen rule. Petitioner is not an accountant or tax professional and did not know to keep all of his records for a specified period of time.
7. Attached is a list of unreimbursed business expenses, deductions, etc and the amounts. For the tax year 2005, Petitioner claims 116,9706 in expenses and/or deductions, etc.
8. Taxpayer is entitled to $50 (Safe harbor amount) for credit for illegal telephone tax. Taxpayer is also entitled to $200 for tax return preparation expense. Taxpayer had a dependent wife.
9. At the trial, the IRS will use only hearsay documents against Petitioner. Therefore, taxpayer should be allowed to submit this affidavit. What is good for the goose is good for the gander.
10. A deficiency determination which is not supported by some evidentiary foundation is arbitrary and erroneous. Weimerskirch v. Commissioner, 596 F.2d 358, 361-362 (9th Cir. 1979), revg. 67 T.C. 672 (1977).
11. In conclusion Petitioner introduces and presents an affidavit or allow him to testify under oath as to the same.
List of deductions and expenses for tax year 2005
Sub contracted out 40% ......................................43,915.60
Office expenses: ............................................400.00
Shipping expenses: ..........................................1200.00
Parts/cost of goods: ........................................15,000.00
Outside Services:(as windshields install)....................3600.00
Health care insurance: ......................................2,415.00
Phone expense: ..............................................1300.00
Sublet repairs( frame pulling etc.)..........................6,000.00
Electricity: ................................................5000.00
Heating (propane): ..........................................1250.00
Auto expenses: 3000 @ .38/mi.................................1,140.00
Towing ......................................................2500.00
Shop Supplies................................................2,400.00
Paint and Materials .........................................28,000.00
Repair Equipment ............................................650.00
Charitable donations to my church ...........................2,200.00
Total of business deductions: ...............................116,9706
Total net loss
______________________________ Oct 12, 2009 Philip J., Pro Se, Petitioner