Joe Nathan Bryant, Jr. - Page 5

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          reported by petitioner's returns, which are stipulated in                   
          evidence herein.                                                            
               2.  With respect to the itemized deductions (Schedule A) on            
          petitioner's return for the year 1992, respondent disallowed the            
          amount of $28,985 as deductions; petitioner, however, claimed               
          only $29,495 in itemized deductions on that return, of which                
          respondent has conceded $1,306.  We know of no basis for                    
          respondent's determination of a disallowed deduction in excess of           
          petitioner's claim, after allowing for respondent's concession.             
               3.  With respect to the year 1993, respondent disallowed               
          $28,526 of itemized deductions; petitioner had claimed $29,870,             
          and after respondent's concession of $1,344, the net disallowance           
          by respondent of $28,526 appears correct in accordance with the             
          present record.                                                             
               The above discrepancies with respect to the disallowances by           
          respondent as compared to the deductions as claimed by petitioner           
          in the 2 years in question will have to be reconciled in the                
          necessary computation herein under Rule 155.                                
               With regard to the penalties in tax for the years 1992 and             
          1993, determined herein by respondent, section 6662(a) imposes a            
          penalty in the amount of 20 percent of the portion of the                   
          underpayment attributable to negligence.  Petitioner is liable              
          for an accuracy-related penalty for negligence in the preparation           
          and filing of his 1992 and 1993 tax returns.  Petitioner failed             
          to substantiate any of the deductions taken on the 1992 and 1993            




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