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merits of the tax dispute for the years in question. Rather,
this case concerns the substantiation of claimed deductions and
the applicability of the penalty under section 6662.
We first address the $1,000 deduction in 2000 for an alleged
payment to an SEP plan. Respondent finds the documentation for
this deduction to be inadequate. We disagree and find it to be
sufficient to sustain the deduction because the exhibit in the
record establishes the $1,000 payment.
The largest amounts in dispute in 2000 and 2001 are for
investment interest. The deduction of investment interest is
governed by section 163. Petitioner deducted $17,358 and
$46,792, respectively. Respondent allowed $4,007 and $3,731,
respectively. Section 163(d)(1) limits the investment interest
deduction to the net investment income for the year, which would
come into play for 2001. Nevertheless, the records submitted by
the petitioner are redacted, spliced together, and recopied.
Some of the records do not even relate to accounts owned by the
petitioner. We find the evidence offered by petitioner to be
inadequate to substantiate any investment interest in excess of
that allowed by respondent.
In each of the years in dispute, petitioner claimed a
miscellaneous business expense deduction under the words
“Computer”. Respondent allowed $650 for a computer maintenance
agreement in 2000, which was not claimed on the return. The
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