Ronald Berry v. Cir

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS NOV 2 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
RONALD GENE BERRY; LINDA No. 19-70684
KATHRYN BERRY,
Tax Ct. No. 14090-15
Petitioners-Appellants,
v. MEMORANDUM*
COMMISSIONER OF INTERNAL
REVENUE,
Respondent-Appellee.
Appeal from a Decision of the
United States Tax Court
Submitted October 26, 2020**
Before: McKEOWN, RAWLINSON, and FRIEDLAND, Circuit Judges.
Ronald Gene Berry and Linda Kathryn Berry appeal pro se from the Tax
Court’s decision, following a bench trial, upholding the Commissioner of Internal
Revenue’s determination of deficiencies and accuracy-related penalties for the
2011 tax year. We have jurisdiction under 26 U.S.C. § 7482(a)(1). We review de
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
novo the Tax Court’s conclusions of law and for clear error its factual findings.
Meruelo v. Comm’r, 691 F.3d 1108, 1114 (9th Cir. 2012). We affirm.
The Tax Court did not clearly err in determining that Phoenix Construction
and Remodeling, Inc. (“Phoenix”) did not overreport its gross income because the
Berrys failed to establish that the $60,000.00 cash deposit from petitioner Linda
Berry’s father to Phoenix was a loan. See 26 U.S.C. § 61(a) (defining gross
income); Welch v. Comm’r, 204 F.3d 1228, 1230-31 (9th Cir. 2000) (explaining
that the taxpayer must establish that income resulted from a nontaxable loan and
setting forth factors for determining whether a transaction is a loan). Contrary to
the Berrys’ contention, the Tax Court was not required to accept their proffered
documentary evidence of the alleged loan as true.
The Tax Court did not clearly err in determining that the Berrys failed to
produce sufficient evidence to demonstrate that Phoenix was entitled to further
deductions for car and truck expenses and cost of goods sold as business expenses.
See 26 U.S.C. §§ 162(a) (business expenses), 274(d) (vehicle expenses); 26 C.F.R.
§ 1.61-3(a) (cost of goods sold to be deducted from gross income to determine
business income); Sparkman v. Comm’r, 509 F.3d 1149, 1159 (9th Cir. 2007)
(taxpayer bears burden of clearly showing right to claimed deduction).
We do not consider arguments and allegations raised for the first time on
appeal. See Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009).
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We do not consider any contentions in the opening brief that are raised on
behalf of or by non-party Andrew Berry because they are outside the scope of this
appeal.
AFFIRMED.
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