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Respondent disallowed the claimed business expenses for 1989
and 1990 as a result of petitioner's failure to substantiate the
expenditures and/or their business purpose. At trial, we held
that expenses respondent had found unsubstantiated were, in large
part, not allowable, reflecting the reasonableness of
respondent's position at least as to the inadequately documented
expenses.
Respondent conceded some deductions and admitted that
petitioner had substantiated some of the expenditures that had
been in controversy, although she maintained that such
expenditures lacked a business purpose. The Court substantially
sustained petitioner as to many of these expenses. Although
respondent has conceded that petitioner has not unreasonably
protracted the proceedings, we note that petitioner repeatedly
failed to respond adequately to respondent's requests for records
and documents, and refused to permit respondent the opportunity
to meet with Frances Byrne, petitioner's president, to explore
further the nature of its business and the purpose of the
corporation's expenditures. Moreover, correspondence between the
parties' counsel reveals that records introduced at trial were
not continually available to respondent's counsel and some were
produced as late as November 1994, one year after the petition
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