Volume 50 — Tax Court Memorandum

Petitioner and her former husband invested in a limited partnership and claimed deductions and investment tax credits on joint income tax returns. Held: petitioner has not shown that the items were grossly erroneous within the meaning of section 6013(e)(1)(B) and (2), I.R.C. 1954, as amended.

Petitioner was convicted in a State criminal trial of 157 counts of theft of more than $300, resulting from petitioner's embezzlement of more than $530,000. Held: (1) Petitioner's conviction does not collaterally estop petitioner from denying that the embezzled funds are includible in his gross income under section 61(a), I.R.C. 1954, on the ground that he acted under the control of various third parties and so should be treated as a conduit. (2) Respondent has failed to show that petitioner's "conduit" theory does not raise a genuine dispute as to any material fact; respondent's motion for partial summary judgment is denied.

During the years at issue, X and Y were corporations, and Z was a subchapter S corporation. X, Y, and Z provided a variety of services primarily to the offshore oil and gas industry. A and B were employees and the sole shareholders of X and Y. A, B, and C were employees and the sole shareholders of Z. X. Y, and Z were very successful, and A, B, and C were paid substantial amounts as compensation. Held, reasonable compensation for A, B, and C, including an amount for the value of stock options, determined.

P was a bank loan officer. During the years at issue, he approved a number of loans to various individuals using false loan documentation. P did not have authority from the bank to make such loans. Held: Amount of income to P as a result of his unauthorized disbursal of bank funds determined. (2) Amount of kickback income to P determined. (3) P is liable for an addition to tax for fraud under sec. 6653(b), I.R.C. 1954, for each of the years at issue.

United was incorporated in September 1973; thereafter it issued 100 shares of its authorized 5,000 shares to Katz. On March 25, 1974, United adopted a plan to issue section 1244 stock. Held: Petitioner have failed to prove that there was no unissued stock of a prior offering when the plan to issue section 1244 stock was adopted; consequently, petitioners have failed to prove that their United stock constituted section 1244 stock.

Held: Value of stock obtained pursuant to exercise of stock option determined under section 83(a). Held: Value of stock obtained pursuant to exercise of stock option determined under section 83(a).

Petitioner electroplated switches and other component parts for manufacturers of electronic equipment, such as radios, televisions, and computers. Held: metals used by petitioner in the electroplating process were merchandise held for sale and petitioner is required to maintain inventories and to use the accrual method of accounting.

Petitioner earned income from a variety of sources for each of the years in issue. He understood his obligations to pay income taxes and to file income tax returns. Held: Addition to tax under section 6653(b), I.R.C. 1954 (fraud), is imposed for each of the years in issue. (2) Petitioner's motion to suppress evidence is denied. Respondent carried his burden of proof as to the additional income for 1976.

Fein-Marquart Associates, Inc., a corporation in the business of computer softward research and design, reimbursed a 49-percent shareholder for racing expenses incurred during the years in issue. Held: petitioners failed to establish that the reimbursed expenses were ordinary and necessary business expenses deductible under sec. 162(a), I.R.C. 1954. Held further, the reimbursed expenses constituted constructive dividends to the shareholder.

Petitioner participated in a scheme to purchase stolen money at a discount. He was swindled by his cohorts who took his purchase money without producing any stolen money. Held: Petitioner may not deduct the money he lost under section 165(c)(2) or (3) because the allowance of the deduction would frustrate clearly defined national or state public policy.

Held, M's purported investment in a videotape tax shelter was a factual sham. The claimed deductions and investment credit based upon the purported videotape investment are denied. Held: M's purported investment in a videotape tax shelter was a factual sham. The claimed deductions and investment credit based upon the purported videotape investment are denied.

Held, respondent correctly determined petitioner's income under the bank deposits method; petitioner is not entitled to deductions for… Held: respondent correctly determined petitioner's income under the bank deposits method; petitioner is not entitled to deductions for business expenses or depreciation in excess of those allowed by respondent; petitioner is not entitled to a partnership loss disallowed by respondent; and, petitioner is liable for an addition to tax under…

Petitioner was a physician and a partner in a medical partnership. Held: respondent's allocation is erroneous because the assignment of income doctrine is not applicable to the instant case. Keller v. Commissioner,77 T.C. 1014 (1981), affd. 723 F.2d 58 (10th Cir. 1983), followed.

Ps have totally failed to produce documents and answer interrogatories despite a specific order of this Court directing them to do so. Held: Ps' failure constitutes a default under the circumstances of this case. R's Motion to Impose Sanctions seeking, inter alia, a judgment for default under Rule 104(c)(3), Tax Court Rules of Practice and Procedure, is granted.

Held, Ps failed to report all of their income from recing activities and sale of thoroughbred horses; Held further, Ps business expenses… Held: Ps failed to report all of their income from recing activities and sale of thoroughbred horses; Held further, Ps business expenses determined with respect to the taxable years 1969 through 1971; Held further, Ps are not entitled to a claimed bad debt loss and theft loss in 1971; Held further, fraud not proven with respect to…

Held, charitable contribution deductions for 19 paintings determined to be significantly lower than claimed by petitioners. Held: charitable contribution deductions for 19 paintings determined to be significantly lower than claimed by petitioners. Held further, petitioners are not liable for additions to tax for negligence.

Petitioner, a non-profit corporation under Tennessee law, was organized for the purpose of promoting the arts. Held: Petitioner qualifies as an exempt organization under section 501(c)(3), I.R.C. 1954, as amended, because it is operated exclusively for the exempt purpose of promoting the arts.

Held: Petitioners' employment as steamfitter welder assignees was indefinite and not temporary; traveling expenses were therefore not incurred while away from home and hence are not deductible under… Held: Petitioners' employment as steamfitter welder assignees was indefinite and not temporary; traveling expenses were therefore not incurred while away from home and hence are not deductible under I.R.C. sec. 162(a)(2).

Held: (1) Deficiencies in income tax for 1974 and 1975 sustained. (2) Additions to tax under secs. 6651(a), 6653(a), and 6654, I.R.C. 1954, against W, and under secs. 6653(b) and 6654, I.R.C. 1954, against H, sustained.

Held, P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954, for each of the years 1976 through 1979. Held: P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954, for each of the years 1976 through 1979.

P, a California savings and loan association, purchased unimproved real property in 1962. Held: property sold by P was not property held for sale to customers in the ordinary course of P's business, and loss on the sale thereof was a capital loss.

Petitioners resided in Scottsdale, Arizona. Held: Petitioner-husband's employment in Burlington, Iowa, in 1979 was indefinite rather than temporary; his 1979 expenses for transportation, food, and lodging while in Burlington are not deductible expenses incurred while traveling away from home. Sec. 162(a)(2), I.R.C. 1954.

Held, petitioner is liable for deficiencies in personal income tax for the years 1973, 1974, and 1975 as determined by respondent. Held: petitioner is liable for deficiencies in personal income tax for the years 1973, 1974, and 1975 as determined by respondent. Held further, petitioner is also liable for the addition to tax under sec. 6653(b), I.R.C. 1954, for each of those years.

P invests in a coal tax shelter where he signs a Mining Lease, which is actually a sublease, affording P the option of paying the $114,000 royalty specified either by cash or a nonrecourse note. Held: minimum royalty provision in sec. 1.612-3(b)(3), Income Tax Regs., Is valid following Wendland v. Commissioner,79 T.C. 355 (1982), affd.

P invests in a coal tax shelter where he signs a Mining Lease, which is actually a sublease, affording P the option of paying the $67,500 royalty specified either by cash or a nonrecourse note. Held: minimum royalty provision in sec. 1.612-3(b)(3), Income Tax Regs., is valid following Wendland v. Commissioner,79 T.C. 355 (1982), affd.

Held: Petition dismissed and deficiencies and additions to tax determined; and damages awarded pursuant to section 6673. Held: Petition dismissed and deficiencies and additions to tax determined; and damages awarded pursuant to section 6673.

R issued a notice of deficiency to Ps based upon information obtained from grant jury proceedings pursuant to Federal District Court order under Rule 6(e), Fed. R. Crim. Held: despite R's request, the Court will entertain Ps' motions although P-H is fugitive from justice. P-W, who will be bound by decision, is present and willing to proceed, and both Ps are represented by counsel. Held further, Ps' motions denied. Kluger v. Commissioner,83 T.C. 309 (1984), followed.

During the year at issue, P was a leasing manager for an automobile dealership, and he incurred certain entertainment expenses. Held: Amount of P's deductible business entertainment expenses determined. (2) P's use of employer-provided vehicles results in income to P; amount determined. (3) Ps are liable for the addition to tax under sec. 6653(a), I.R.C. 1954, for negligence.

P received wages in 1978, 1979, 1980, and 1981. P, as a tax protestor, filed Forms 1040 or 1040A for such years which disclosed only his name, address, and social security number. Held: A Form 1040 or 1040A which contained no information as to income and deductions did not constitute a properly executed Federal income tax return.

Held: (1) Deficiencies in income tax for 1980 and 1981 sustained. Held: Deficiencies in income tax for 1980 and 1981 sustained. (2) Additions to tax under sec. 6653(b), I.R.C. 1954, for fraud, and sec. 6654, I.R.C. 1954, for underpayment of estimated tax, sustained. (3) The United States is entitled to an award of damages under sec. 6673, I.R.C. 1954.

Held: (1) P is liable for the addition to tax for fraud for 1981 under sec. 6653(b), I.R.C. 1954. (2) The United States is entitled to an award of damages under sec. 6673, I.R.C. 1954. Held: P is liable for the addition to tax for fraud for 1981 under sec. 6653(b), I.R.C. 1954. (2) The United States is entitled to an award of damages under sec. 6673, I.R.C. 1954.

Held: (1) Deficiency in income tax for 1981 sustained as modified. (2) P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954. Held: Deficiency in income tax for 1981 sustained as modified. (2) P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954.

Held: (1) P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954. Held: P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954. (2) The United States is not entitled to an award of damages under sec. 6673, I.R.C. 1954, since the proceedings herein were not instituted or maintained primarily for delay, and P's position in such proceedings was not frivolous or groundless.

Held, P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954, for 1981. Held: P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954, for 1981.

Held: (1) P is not entitled to a deduction for Nontaxable receipts. (2) P is liable for the self-employment tax. Held: P is not entitled to a deduction for Nontaxable receipts. (2) P is liable for the self-employment tax. (3) Additions to tax under sec. 6653(b), I.R.C. 1954, for fraud, and sec. 6654, I.R.C. 1954, for failure to pay estimated tax, sustained. (4) The United States is entitled to an award of damages under sec. 6673, I.R.C. 1954.

Held, P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954, for 1981. Held: P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954, for 1981.

Held, S's rental of an A-frame house constituted an activity not engaged in for profit within the meaning of section 183. Held: S's rental of an A-frame house constituted an activity not engaged in for profit within the meaning of section 183. Held further, S is not entitled to claim travel expenses in excess of $646.64 for 1978. Held further, S is not entitled to claim a charitable contribution deduction in excess of $85.40 for 1978.

Held, because petitioners failed to carry their burden of proving that they actually made charitable contributions to an organization… Held: because petitioners failed to carry their burden of proving that they actually made charitable contributions to an organization organized and operated exclusively for religious purposes, no part of the net earnings of which inured to the benefit of any private individual, petitioners are not entitled to deductions for contributions…

Petitioner, a contract engineer, worked at jobs that generally lasted from three months to one year. The jobs he had in 1978 were in Michigan, Kansas, and Minnesota. Held: Cerro Gordo was not petitioner's home; his 1978 expenses for food, lodging, etc., are not deductible expenses incurred while traveling away from home. Sec. 162(a)(2), I.R.C. 1954.

Depreciation: Deductibility: Credits: Investment tax credit: Not-for-profit activity: Wind turbine: Chemical cell. -- Depreciation deductions and an investment tax credit were denied with respect to a taxpayer's purchase (primarily through nonrecourse financing) of a wind turbine and lease of a chemical cell. The taxpayer's primary objective was to obtain tax benefits that would shelter income from other activities from taxation rather than to make a profit.

Held: (1) P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954, for 1980 and 1981. (2) The United States is entitled to an award of damages under sec. 6673, I.R.C. 1954.

Held: (1) P's deductible transportation expenses determined. (2) P is liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954. (3) The United States is not entitled to an award of damages under sec. 6673, I.R.C. 1954.

Held: (1) Petitioners are not entitled to a casualty loss deduction under section 165(c)(3), I.R.C. 1954, for 1978. Held: Petitioners are not entitled to a casualty loss deduction under section 165(c)(3), I.R.C. 1954, for 1978. (2) Petitioners are not entitled to a residential energy credit under section 44C, I.R.C. 1954, for 1978 and 1979. (3) Petitioners are not entitled to deduct patent licensing expenses for 1978 and 1979.

Held: (1) Petitioners in docket No. 3881-79 realized ordinary income on the exercise of stock options in 1973; (2) petitioner in docket Nos. 22777-81 and 22778-81 is entitled to a deduction for compensation upon the exercise of said options; and (3) petitioners in docket No. 9235-79 are taxable on the imputed interest on the stock reissued upon the exercise of said options to petitioners in docket No. 3881-79.

Fs sold a farm for $325,000. Fs and the purchasers entered into an agreement for warranty deed providing for periodic payments of principal and interest. Held: Fs are taxable on the interest income paid to the trust under the assignment of income doctrine. Helvering v. Horst,311 U.S. 112 (1940).

Decedent died holding shares of common stock in a closely held water utility company. Held: for Federal estate tax purposes, the date-of-death fair market value of the shares of stock held by decedent was $125.25 per share.

Held: The fair rental value of lodging furnished in a house owned by one of the petitioners (and not the mortgage payments made by that petitioner) is to be taken into account in determining which… Held: The fair rental value of lodging furnished in a house owned by one of the petitioners (and not the mortgage payments made by that petitioner) is to be taken into account in determining which petitioner furnished more support to each of petitioners' children.

Held: Partnership business of owning Film constituted activity engaged in for profit; petitioners may not include face amount of nonrecourse… Held: Partnership business of owning Film constituted activity engaged in for profit; petitioners may not include face amount of nonrecourse note in basis but may include actual cash outlay; petitioners may depreciate Film pursuant to income forecast method and depreciation determined thereunder; and petitioners are not entitled to…

Held: (1) The Commissioner's determination of deficiencies for 1972, 1973, and 1974 through means of net worth computations is sustained, as modified herein. (2) Part of the underpayment for each year was due to fraud on the part of Ps. (3) The statute of limitations does not bar the assessment and collection of the deficiencies. Sec. 6501 (c)(1), I.R.C. 1954.

Held: Petitioner's employment as a journeyman steamfitter was indefinite. Thus, a deduction for expenses to travel to and from work is not allowable under section 162(a)(2). Held: Petitioner's employment as a journeyman steamfitter was indefinite. Thus, a deduction for expenses to travel to and from work is not allowable under section 162(a)(2).

Held: Petitioner's employment as an electrician assignee was indefinite. Thus, a deduction for expenses to travel to and from work is not allowable under section 162(a)(2). Held: Petitioner's employment as an electrician assignee was indefinite. Thus, a deduction for expenses to travel to and from work is not allowable under section 162(a)(2).

Held: Petitioner's employment as a steamfitter-welder assignee was indefinite. Thus, a deduction for expenses to travel to and from work is not allowable under section 162(a)(2).

Held: Petitioner's employment as a journeymen pipefitter was indefinite. Thus, a deduction for expenses to travel to and from work incurred during 1981 is not allowable under section 162(a)(2). Held: Petitioner's employment as a journeymen pipefitter was indefinite. Thus, a deduction for expenses to travel to and from work incurred during 1981 is not allowable under section 162(a)(2).

Held: Petitioner's employment as a journeyman electrician was indefinite and thus, a deduction for expenses to travel to and from work incurred during 1980 are not allowable under section 162(a)(2). Held: Petitioner's employment as a journeyman electrician was indefinite and thus, a deduction for expenses to travel to and from work incurred during 1980 are not allowable under section 162(a)(2).

Held: Petitioner's employment as a journeyman electrician was indefinite. Thus, a deduction for expenses to travel to and from work is not allowable under section 162(a)(2). Held: Petitioner's employment as a journeyman electrician was indefinite. Thus, a deduction for expenses to travel to and from work is not allowable under section 162(a)(2).

In 1977, petitioner-wife was required by her employer to obtain a college degree in order to continue her employment as an office manager and a consultant. Held: By obtaining this initial bachelor's degree, petitioner-wife was qualified to pursue a number of different trades or businesses that required a bachelor's degree as a minimum entry-level qualification.

After working overseas 10 years, petitioners moved from Athens, Greece, to Sacramento, California, in April 1977. Petitioner-husband's efforts to acquire a business fell through in September 1977. Held: Petitioners have failed to satisfy the 39-week employment requirement of section 217(c)(2), I.R.C. 1954, and so are not permitted to deduct the expenses of moving from Athens to Sacramento.

Held: Petitioners' transactions with Southern Star Land & Cattle Company, Inc., were not bona fide sales. Held: Petitioners' transactions with Southern Star Land & Cattle Company, Inc., were not bona fide sales. Thus, petitioners are not entitled to deductions for depreciation, interest, or maintenance fees relating to their purported cattle purchases. Hunter v. Commissioner,T.C. Memo. 1982-126.

Ys failed to report substantial amounts of income earned in connection with the transportation of marijuana from Mexico to the United States. Held: Ys are liable for additions to tax for fraud under section 6653(b).

P was in the oil business, and during the years at issue, he failed to report substantial amounts of income. Held: Deficiencies in income tax for 1976 and 1977 as to P, and as to X for its 1974 and 1975 taxable years, sustained. (2) Additions to tax under sec. 6653(b), I.R.C. 1954, for fraud as to both P and X sustained. (3) Addition to tax under sec. 6655, I.R.C. 1954, for failure to pay estimated tax as to X sustained.

Held: (1) Ps are not entitled to deduct amounts purportedly loaned to their children. (2) The statute of limitations does not bar the assessment and collection of the deficiency. Held: Ps are not entitled to deduct amounts purportedly loaned to their children. (2) The statute of limitations does not bar the assessment and collection of the deficiency.

Held: Petitioners received unreported income of $800 during 1979; petitioners are not entitled to a charitable contribution deduction; and petitioners are liable for an addition to tax under section… Held: Petitioners received unreported income of $800 during 1979; petitioners are not entitled to a charitable contribution deduction; and petitioners are liable for an addition to tax under section 6653(a).

During 1975 and 1976, J. C. Penney Properties, a wholly owned subsidiary of J.C. Penney Company, Inc., constructed a department store and an automotive center on land that it owned. Held: the transactions involving Penn-Centennial Associates did not lack economic substance. Held further, the interest expense paid in 1977 by Penn-Centennial Associates was not excessive; thus, no part of it represented prepaid interest.

Petitioners, both of whom were employed as full-time physical education teachers, paid for family memberships at four racquetball and handball facilities and the related costs for lessons and court time. Petitioners' children did not use these facilities through petitioners' memberships. Held: Amount of allowable education expense deduction determined. Sec. 162, I.R.C. 1954, and sec. 1.162-5(a), Income Tax Regs.; Cohan v. Commissioner,39 F.2d 540 (CA2 1930).

Held: Petitioners' wages are subject to tax; additions to tax are sustained; and damages are awarded to the United States pursuant to section 6673.

Held: Petitioners failed to carry their burden of proving that jewelry was stolen from their bank safe-deposit box. Petitioners' theft loss deductions are disallowed. Sec. 165(c)(3), I.R.C. 1954. Held: Petitioners failed to carry their burden of proving that jewelry was stolen from their bank safe-deposit box. Petitioners' theft loss deductions are disallowed. Sec. 165(c)(3), I.R.C. 1954.

Held: (1) The Commissioner's determination of deficiencies for 1977 and 1978 is sustained, as modified herein. (2) Part of the underpayment for each year was due to fraud on the part of Ps. Held: The Commissioner's determination of deficiencies for 1977 and 1978 is sustained, as modified herein. (2) Part of the underpayment for each year was due to fraud on the part of Ps.

In his pleadings, P alleged that refund checks issued by R and due to P were misappropriated by P's attorney. R's deficiency computation takes into account the refunds issued to P. P argues that the deficiency should be reduced to the extent that refund checks were issued to him but never received by him. R filed a motion for partial summary judgment on the premise that the Court does not have jurisdiction to consider the question of whether the amount of the deficiency should reflect refunds issued by R and not received by P. Held, it is within the Court's jurisdiction to consider the question of whether P should be credited with refunds issued by R in determination of a deficiency or overpayment. Accordingly, R's Motion for Partial Summary Judgment is denied.

In their pleadings, Ps alleged that refund checks issued by R and due to Ps were misappropriated by Ps' attorney. R's deficiency computation takes into account the refunds issued to Ps. Ps argue that the deficiency should be reduced to the extent that refund checks were issued to them but never received by them. R filed a motion for partial summary judgment on the premise that the Court does not have jurisdiction to consider the question of whether the amount of the deficiency should reflect refunds issued by R and not received by Ps. Held, it is within the Court's jurisdiction to consider the question of whether Ps should be credited with refunds issued by R in determination of a deficiency or overpayment. Accordingly, R's Motion for Partial Summary Judgment is denied.

On their tax returns for 1976, 1977, and 1978, petitioners reported income and expenses (net losses each year) from an advertising business on schedule C, as well as interest, dividends, capital… Held: 1978 income tax--since petitioner-husband's only trade or business was the advertising business and it produced net losses, no deductions are allowed for Keogh plan contributions. Sec. 404(e)(1), I.R.C. 1954 (before TEFRA 1982).

In 1973, Georgetown University purchased an apartment building known as Alban Towers to alleviate a critical shortage of on-campus dormitory housing for its students. Held: respondent properly disallowed petitioners' claimed deductions because Georgetown University, and not the partnership, was the owner of Alban Towers. The benefits and burdens of ownership of Alban Towers were not transferred to the partnership.

P was named Independent Executrix of her deceased husband's estate. Held: P carried on the oil and gas lease in her capacity as Independent Executrix and not in her individual capacity. Held further, P was not carrying on a trade or business within the meaning of section 1402(a), and consequently her one-half interest in income from the sale of oil and gas is not subject to self-employment tax.

Ps were members of an affiliated group which filed consolidated returns during the years in issue. Held: such payment was received by LFH in exchange for its stock in the corporations and therefore constitutes personal holding company income within the meaning of section 543. Held further, amounts allocated to LFH as interest income under section 482 constitute personal holding company income within the meaning of section 543.

Held, terms of a testamentary trust created a pre-1942 general power of appointment in petitioner's decedent which was unexercised at the time of her death. Held: terms of a testamentary trust created a pre-1942 general power of appointment in petitioner's decedent which was unexercised at the time of her death. Held further, income subject to an unexercised pre-1942 power of appointment is not includable in petitioner's decedent's gross estate.

Petitioner-husband accepted employment in Guatemala for a period of 24 months. Petitioners entered Guatemala on April 29, 1980. Held: Petitioners are not entitled to exclude certain foreign earned income because the foreign residence or presence provisions of sec. 911(a) I.R.C. 1954 may not be waived under sec. 913(j)(4) I.R.C. 1954 except where the Secretary of the Treasury, after consultation with the Secretary of State, has determined that war, civil unrest, or…

During 1980, G, an electrician, was employed by the Bechtel Corporation to work on the construction of the Palo Verde Nuclear Power Plant near Buckeye, Arizona. G commuted daily from his residence in Tempe, Arizona, to his jobsite. Held, G's employment was indefinite rather than temporary, and, therefore, he is not entitled to deduct transportation expenses incurred commuting between his residence in Tempe and his jobsite.

Petitioners' residence was in Titusville, Pennsylvania. From July 28, 1981, through November 4, 1983, petitioner-husband was employed as a boilermaker on the construction of a nuclear power plant at Perry, Ohio. Petitioner-husband drove the round trip between Titusville and Perry every working day. In the notice of deficiency, respondent determined that petitionerhusband's job became indefinite at the end of July 1982 and disallowed deduction of five months worth of petitioner-husband's 1982 daily transportation expenses. By amended answer, respondent asserts that the job was indefinite before the start of 1982 and seeks to disallow the entire 1982 daily transportation expenses. Held: (1) Respondent is not equitably estopped from asserting an increase in the deficiency. (2) Petitioners have the burden of proving that petitioner-husband's job continued to be temporary after July 1982; respondent has the burden of proving that petitioner-husband's job had become indefinite before August 1982. (3) Neither side has carried its respective burden of proof.