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On October 13, 1993, a week before trial, petitioner filed
his pretrial brief in which, for the first time, petitioner
argued that the entire $20,075 reported as taxable income on his
1988 return had been mistakenly reflected as such by Dragna, who
had prepared petitioner’s 1988 return, and that the $20,075 in
reported taxable income actually represented nontaxable loan
proceeds. Trial of petitioner’s case was continued until January
of 1994 to allow petitioner time to corroborate further his new
claim as to the nontaxable nature of the $20,075.
In late December of 1993, respondent received from
petitioner documents that satisfied respondent’s representative
as to the nontaxable nature of the $20,075, and in January of
1994 petitioner’s case was settled on that basis. Petitioner
never established the deductibility of the $17,862 claimed
farming loss, and the settlement that was entered into did not
reflect any deduction with regard thereto.
Pursuant to the settlement, we entered a decision reflecting
no deficiency in income tax due from petitioner for 1988 and
reflecting no additions to tax. When petitioner filed the
instant motion for an award of administrative and litigation
costs, we vacated our decision pending the outcome of
petitioner’s motion for administrative and litigation costs.
Petitioner did not attach to his motion an affidavit, as
required by Rule 231(b)(5), supporting his claim that he satisfied
the net worth requirement of section 7430(c)(4)(A)(iii). Moreover,
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