Opinion
29056-21S
05-26-2023
ALLAN MORRIS SVELA, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
EUNKYONG CHOI, SPECIAL TRIAL JUDGE
On December 5, 2022, the Court issued a Bench Opinion in this case and ordered the parties to submit computations under Rule 155. Petitioner and respondent submitted discrepant proposed computations on March 2, 2023, and March 6, 2023, respectively. Accordingly, pursuant to Rule 155(b), the Court set this matter for argument.
The Court called this case at its Washington, D.C. special trial session on May 10, 2023. Petitioner appeared on his own behalf. Brian Beddingfield appeared on behalf of respondent. The Court heard from both parties.
There is a discrepancy between the amount of the deficiency the parties propose is due for taxable year 2017. Petitioner proposes that the deficiency for taxable year 2017 is $7,170. Respondent proposes that it is $8,172. The discrepancy between the parties' computations appears to be primarily the result of a difference in the figure used as the disallowed amount of business expenses relating to petitioner's race car.
There is also a discrepancy between the amount the parties propose is due for taxable year 2018. However, because the discrepancy is in petitioner's favor (the amount respondent proposes due is less than the amount petitioner proposes due), and because the parties did not address taxable year 2018 during the hearing on this matter, the Court will accept respondent's proposed computation for taxable year 2018 without discussion.
We disallowed all expenses relating to petitioner's race car. Petitioner's Rule 155 computation accounts for only a portion of the disallowed expenses relating to the race car (sponsorship expenses), leaving out the rest (car and truck expenses). Respondent's computation correctly accounts for all of the disallowed expenses relating to the race car.
Upon due consideration, and for cause, it is
ORDERED that the Court will enter a decision pursuant to respondent's proposed Rule 155 computations, filed March 6, 2023. It is further
ORDERED AND DECIDED that there are deficiencies in income tax due from petitioner for taxable years 2017 and 2018 in the amounts of $8,172.00 and $7,062.00, respectively; and
That there are penalties due from petitioner for taxable years 2017 and 2018 in the amounts of $1,634.40 and $1,412.40, respectively, under the provisions of I.R.C. § 6662(a).