In Uncategorized on 05/14/2018 at 16:36

Stephanie Elizabeth Gentry, Docket No. 15580-17S, filed 5/14/18, gets plenty of sympathy from that Obliging Jurist, Judge David Gustafson, but IRS gets the deficiency it claims in this designated hitter off-the-bencher.

Steph merged her art consultancy expenses with her expenses for the boat-chartering business she thought she co-owned with her boyfriend, except she didn’t.

All her records didn’t go back to her parents’ house when she moved onto the boat she was renovating for the business. Instead, they remained on the boat, and were either lost in a “sailboat accident” (Transcript, at p. 11) or when, in the year after the year at issue, “…Ms. Gentry suffered serious burns from a mishap in the boat involving boiling water. She testified — and we assume — that in order to evade liability for her injuries, her boyfriend made false accusations against her, had her evicted from the marina, and obtained a protective order barring her from the boat on which she had been living. At that time she realized that her boyfriend had tricked her into paying expenses for and working in the business and that she did not really own any stake in it.” Transcript, at p. 6.

Howbeit, Judge David Gustafson has a legitimate concern about Steph’s recordkeeping. “…her account is not impossible, but we think it unusual that, when she moved from her studio apartment, she took her records with her onto a boat, not the most stable and secure storage situation — and a boat that she did not even own — rather than including those records with the personal effects that she stored at her parents’ house.” Transcript, at p. 11.

And while Steph tries to reconstruct expenses from her business bank account, expenditures therefrom seem to be personal as well as business. “The deductions include expenses for clothing. Ms. Gentry testified that there was no uniform required for her job, but explained that the employees were required to dress very well. However, the clothes that she bought were evidently not specialized but were suitable for use outside of her work environment – illustrated by the fact that she wore to her trial a pair of shoes for which she had deducted the expense for 2014.” Transcript, at p. 13.

She may have a theft loss claim for the money she paid to her (doubtless by now ex) boyfriend, but that probably only became worthless in a succeeding year to that at issue.

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: