William S. Fairey, Jr., and Susan R. Fairey - Page 6

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               Susan Fairey bought items for her classroom during the years           
          in issue from stores such as Target, Wal-Mart, K-Mart, Publix,              
          and Albertsons.  The record does not show the costs of those                
          items.  Petitioners paid the following amounts in 1999 to buy               
          items for personal use, Susan Fairey’s classroom, and                       
          petitioner’s business activities (the amounts for each are not              
          specified in the record):                                                   
               Seller                              1999       2000                    
               Target                             $945.51   $629.28                   
               Wal-Mart                           673.23    558.44                    
               Phar-Mor                           457.74    124.31                    
               Sam’s Wholesale Club               451.54    90.12                     
               Toys By Nature                     337.02    203.26                    
               Office Depot                       236.06    63.91                     
               Everything Educational             127.19    288.31                    
               Scholastic Books                   58.40     77.80                     
               Learning Depot                     30.97     19.68                     
               Albertson’s                        327.39    --                        
               Publix                             49.86     --                        
               Walgreen’s                         --        100.26                    
               K-Mart                             --        70.77                     
               Austin Fairey, petitioners’ daughter, attended Phillippi               
          Shores Elementary School during the years in issue.  Susan Fairey           
          bought various educational materials for Austin during those                
          years.                                                                      
          C.   Petitioners’ Income Tax Returns                                        
               Petitioner prepared petitioners’ income tax returns from               
          1988 through 2001 using computer spreadsheet and tax preparation            
          software.  Petitioner classified their checks into categories               
          such as business expenses, employee business expenses, and                  






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