Hawk v. Comm'r

Hawk v. Comm'r

Opinion

MEMORANDUM FINDINGS OF FACT AND OPINION

GALE, Judge: Respondent determined deficiencies in petitioner's Federal income tax for 2006 and 2007 of $3,094 and $36,036, respectively, and accuracy-related penalties under section 6662(a) of $618.80 and $7,207.20, respectively.¹

 [*2]  Following concessions by the parties,² the issues for decision are: (1) whether petitioner is entitled to deductions for the business use of her homes of $7,919 and $9,829 for 2006 and 2007, respectively; (2) whether petitioner is entitled to deduct car and truck expenses for 2006 and 2007 in amounts greater than those respondent allowed; (3) whether petitioner is entitled to deduct on Schedule C, Profit or Loss From Business, "other expenses" of $2,320 for 2006; and (4) whether petitioner is liable for accuracy-related penalties under section 6662(a) for 2006 and 2007.

FINDINGS OF FACT

Some of the facts have been stipulated and are so found. Petitioner resided in California at the time she filed her petition.

 [*3]  Business use of residences

In 2006 and 2007 petitioner was an accountant who provided, among other services, tax return preparation services to her clients. Petitioner had an office in Moss Beach, California (Moss Beach office), throughout 2006 and 2007 which she rented for $715 per month. She claimed, and respondent allowed, deductions for this office rent [**3]  expense for both years. Petitioner performed 50% of her work from the Moss Beach office in 2006 and 75% in 2007. Additionally, in 2007 petitioner hired temporary assistants for her bookkeeping activities for the business, including reviewing credit card statements covering 2006 and posting the data therein to the appropriate expense accounts of the business. These assistants did their work at the Moss Beach office.

Petitioner also owned a mobile home in Susanville, California (Susanville residence), and a house in Clearlake Oaks,³ California (Clearlake Oaks residence),  [*4]  in 2006 and 2007.⁴ During those years she had clients in each location, but she did not use the Susanville residence or the Clearlake Oaks residence for client meetings. Instead, she met with clients at their places of business or residence and then did some of the accounting work for them at the residences she owned. During 2006 and 2007 she rented out the Susanville residence to a close friend but also used it herself for occasional overnight occupancy and for storing workpapers and client files.

OPINION

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