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provided some documentation to respondent. The record does not
indicate what information was enclosed with this letter. By
letter dated January 10, 1995, petitioner's attorney provided
further documentation to respondent. Again, the record does not
indicate what information was provided in this letter. This
letter, however, indicated petitioner's inability to locate
documentation justifying the "auto expense", one of the
adjustments in the notice of deficiency that respondent
determined was taxable income.
On March 3, 1995, respondent sent a letter to petitioner's
attorney summarizing the issues in the 1988 and 1989 cases. In
the letter, respondent conceded the 1988 $40,415 community
property income adjustment as a result of the opinion in Sharer
v. Commissioner, supra. Respondent also conceded part of the
1988 $25,205 adjustment for additional earned income but
requested additional documentation as to the other parts of this
adjustment and the $20,000 adjustment for a payment received by
petitioner from a law firm during 1988. Petitioner claimed that
the $20,000 payment was a personal injury settlement, which was
not taxable under section 104(a)(2). Respondent requested
further information on this item because some of respondent's
documentation indicated that petitioner's claim included taxable
as well as nontaxable elements. Finally, respondent conceded the
adjustment for the State income refund, and also allowed
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