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rigged specifically for harpooning tuna. Mr. Lamb obtained the
funds for this purchase in the form of a personal advance from
Marriner Lumber Co. Based upon his years of tuna fishing
experience, Mr. Lamb believed that he would be able to make a
substantial profit in the rising market.
On June 10, 1988, Mr. Lamb obtained a Federal Fisheries
permit, which allowed him to harpoon Atlantic bluefin tuna. This
permit allowed Mr. Lamb to harpoon an unlimited number of tuna
per day until a total of 50 tons was caught by the tuna fishing
community.
The tuna fishing season begins in mid-June and ends in late
September. From June 1 through July 2, 1989, Mr. Lamb was in
Africa on a big game hunt. When he returned to Maine on July 3,
the quota for tuna had already been filled. This was the first
time that the quota had been filled so early. Therefore, Mr.
Lamb was unable to do any tuna fishing for the remainder of the
season. Mr. Lamb did not report any income or claim any
deductions for his tuna fishing activity on his Federal income
tax return for 1989. Mr. Lamb’s accountant, Gerald P. Nadeau,
informed Mr. Lamb that he was entitled to a depreciation
deduction for the Lu-Joy for 1989, but Mr. Lamb refused because
of his failure to do any fishing for that year.
In an attempt to eliminate the quota problem he encountered
in 1989, on June 7, 1990, Mr. Lamb changed his Federal Fisheries
permit for Atlantic bluefin tuna to the “general category”. This
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