Law Essay Example: Storey Versus Commissioner

The case focuses on making a judgment about Lee Storey and her film production career of creating documentaries. The main aim of the paper is to provide a short analysis of the petitioner, and evidence as to whether she was involved in the business for profit. With the primary aim being to prove whether her election under section 181 was adequate to expense for her production costs and decide whether the petitioner is subject, under section 6662, to orders for the years at issue.

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Findings

Legally it's the obligation, of the taxpayers to determine whether the petitioner was in line with the law while conducting his or her trade. According to the results, the petitioner performed her production activity with regularity and continuity. Nevertheless, being a taxpayer, she was expected to act with the requisite intent for it or profit motive to identify whether it's a business or trade which in this case was not clear (Aubin et al 1931). Because of the lack of clarity the commission maintains that she was not engaged in any business or profession. Hence all expenses for the production of "smile till it hurts are not related to market according to section 162(a). As a result, the commission is against all costs spent on the making of the movie.

Facts available, prove that the making of smile till it hurts aimed at making a profit which is a contradiction to what the commission states (Garcia 2008). By profiting from the making of the film the commission stands corrected in that, the production was carried out in a business-like manner (Aubin, Charles Walter Duret, et al 1931). During her creations, the petitioner maintained continued support from expertise as required under section 1. 183-2(b) (2). She also spent a significant amount of time engaged with learning more about the production activity as required under sec.1.183-2(b)(3). Her commitment towards the field nullifies all statement by the commission which terms her to be of a negligent character and not devoted.

The respondent states that the petitioner had a fulltime job preventing her from rising to the level of a business or trade (Aubin et al 1931). However, the petitioner existed only as a partner to the firm allowing her to achieve flexibility around her filmmaking activity. According to the respondent and as per Aubin et al (1931) the market has been experiencing large downturns for the past few years. Their demands and expectations towards the petitioner are yet to be met. Instead, the company has experienced a vast number of losses. According to them the petitioner is using the downturns as a cover point which is unacceptable but, regarding the current market situation at that time the petitioner claims that she has put in a high amount of effort and claims that her hard work will be recognized and rewarded substantially in due time (Garcia 2008).

Conclusion

As stated under section 181, taxpayers are responsible for deciding on the deduction of production costs. According to the evidence presented, the respondent failed to raise the petitioner's validity properly. After taking into consideration, all findings the taxpayers can confirm that the petitioner took part in the business of film production legally and the election of section 181 are adequate to support her claims of innocence. In conclusion, the petitioner is not held accountable for the penalty of accuracy, and hence all argument put forward termed irrelevant and without merit.

Work cited

Aubin, Charles Walter Duret, et al. "INDEX TO VOL. LXXI, 1931."

Garcia, A. I. (2008). Topping v. Commissioner: An Example of How an Equestrian Taxpayer Can Utilize Single Activity to Preclude the IRS Hobby Loss Challenge. Ky. J. Equine Agric. & Nat. Resources L., 1, 97.