Haman v. Commissioner

1972 T.C. Memo. 118, 31 T.C.M. 466, 1972 Tax Ct. Memo LEXIS 142
United States Tax Court·Decided May 22, 1972·No. Docket No. 3169-70.·Unpublished

Opinion

Richard Haman and Beverly Haman v. Commissioner.
Haman v. Commissioner
Docket No. 3169-70.
United States Tax Court
T.C. Memo 1972-118; 1972 Tax Ct. Memo LEXIS 142; 31 T.C.M. (CCH) 466; T.C.M. (RIA) 72118;
May 22, 1972, Filed.
Richard Haman and Beverly Haman, pro se, 210 Sunnybrook Dr., Fortuna, Calif.Harry M. Asch and Joyce E. Britt, for the respondent.

FEATHERSTON

Memorandum Findings of Fact and Opinion

FEATHERSTON, Judge: Respondent determined deficiencies in petitioners' Federal income taxes for 1966 and 1967 in the amounts of $2,646.32 and $3,930.75, respectively, and additions to such taxes under section 6653(a) 1 in the amounts of $132.31 and $196.53, respectively. The issues for decision are:

1. Whether the issuance of the deficiency notice in the instant case violated petitioners' constitutional rights;

2. Whether, pursuant to sections 162(a) and 274, respondent properly disallowed portions of deductions claimed by petitioners for the following expenses assertedly incurred by them in their fishing business during 1966 and 1967:

(a) costs of provisions,

*146 (b) promotional expenses, including:

(1) restaurant meals for crew,

(2) Christmas parties for crew,

(3) entertaining business associates, and

(4) gifts to business associates,

(c) foreign port expenses,

(d) storage of gear and office space, and

(e) licensing fees and taxes;

3. Whether respondent properly disallowed a portion of the amount claimed as a deduction in petitioners' return for 1967 under section 167(a) for depreciation of shrimp gear;

4. Whether, under section 46(b), petitioner is entitled to carry an unused investment credit forward from 1965 to 1966 and 1967 without first carrying such credit back to prior taxable years; and

5. Whether any part of any underpayment of petitioners' income tax liabilities for 1966 and 1967 was "due to negligence or intentional disregard of rules and 467 regulations" within the meaning of section 6653(a).

Findings of Fact

Richard Haman (hereinafter referred to as petitioner) and Beverly Haman, husband and wife, were legal residents of Fortuna, California, at the time they filed their petition. They filed joint Federal income tax returns for 1966 and 1967 with the district director of internal revenue, San Francisco, *147California.

Petitioner is a commercial fisherman and has been engaged in this business for more than 20 years. He owns and operates a 60-foot fishing vessel named Mari-Joann. From this boat, petitioner fishes for tuna, shrimp, and crabs. When fishing for crabs, he usually makes daily deliveries to Eureka, the home port for his boat, located about 17 miles from his residence in Fortuna. When engaged in other kinds of fishing, petitioner is frequently at sea for extended periods. His pursuit of tuna, for example, may take him anywhere along the coast from Mexico to the State of Washington. The Mari-Joann, which is equipped for extended journeys, usually carries a crew of two or three men in addition to petitioner. During 1966 and 1967, petitioner's fishing business produced gross receipts of $66,055.62 and $100,060.12, respectively.

Petitioner, his wife, and, sometimes, members of his crew purchased substantial quantities of food and drinks for use on the boat while petitioner and his crew were working. The cash register receipts received on the purchase of these provisions were kept by petitioner's wife in a tin box which she used exclusively for that purpose. In addition, petitioner's*148 wife sometimes took to the boat food which she had prepared at home and food which she had purchased for use at home. A record of the costs of these items was kept by petitioner's wife in a diary. The cash register receipts and the diary indicate that the following amounts were expended for food and drinks to be used on the boat during 1966 and 1967:

Costs of
Provisions
19661967
FromFrom
PurchasedHomeTotalPurchasedHomeTotal
Jan.$ 174.12$167.50$ 341.62$ 373.32$ 59.00$ 432.32
Feb.176.2048.00224.20247.5954.00

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Haman v. Commissioner, 1972 T.C. Memo. 118, 31 T.C.M. 466, 1972 Tax Ct. Memo LEXIS 142 (tax 1972).

1972 T.C. Memo. 118 (Haman v. Commissioner) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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