James Luther Cochrane - Page 8

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          they paid to petitioner.  In response, petitioner stated that               
          respondent failed to identify "by statute and regulation any                
          activity for which petitioner would receive income from 'fees',             
          or a statute and regulation identifying any amount in question as           
          a 'fee'."                                                                   
               (7) In requests 34 through 39, respondent attached copies of           
          canceled checks and asserted that petitioner received these                 
          checks from clients of his tax return preparation and tax                   
          counseling business in exchange for services rendered.  In                  
          requests 40 and 41, respondent attached a copy of a receipt given           
          by petitioner to John Morales and asserted that the receipt was             
          given by petitioner in exchange for payment by Mr. Morales for              
          petitioner's income tax services.  Petitioner's response to each            
          of these requests was essentially the same:  "petitioner objects            
          to respondent's exhibit * * * as inconclusive of income, and                
          respondent fails to identify as income under any statute and                
          regulation, and is not identified as any income item by tax class           
          or other identification."                                                   
               (8) In request 18, respondent asserted that, when                      
          interviewed by Internal Revenue Service (IRS) special agents                
          concerning his income tax liabilities for the years in issue,               
          petitioner told the agents that he was not in business, and did             
          not own any interest in a business.  In response, petitioner                
          stated that he lacked "knowledge of any 'effectively connected              






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