Kirk A. Keegan, Jr. - Page 3

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            1992, was postponed because petitioner was out of town on                                 
            business.  An Order to Show Cause scheduled for April 1, 1992,                            
            was postponed at the request of opposing counsel.                                         
                  On May 6, 1992, a Stipulation and Order to Show Cause was                           
            filed in the Superior Court of the State of California.  In the                           
            Stipulation and Order to Show Cause, the parties agreed that                              
            petitioner would make spousal support payments in the amount of                           
            $9,000 per month commencing June 1, 1992.                                                 
                  During 1992, petitioner made payments to, or on behalf of,                          
            Mrs. Keegan in the total amount of $96,100.  Of that amount,                              
            $34,306 was paid prior to the entry of the Stipulation and Order                          
            to Show Cause.  Petitioner deducted the entire $96,100 as alimony                         
            on line 29 of his Form 1040, U.S. Individual Income Tax Return,                           
            for 1992.                                                                                 
                  Respondent issued a notice of deficiency on December 7,                             
            1995.  Among other things, respondent limited petitioner's                                
            deduction for alimony to $61,794, which amount represents support                         
            payments made by petitioner to Mrs. Keegan subsequent to the                              
            filing of the Stipulation and Order to Show Cause.  Respondent                            
            also determined that petitioner was liable for an accuracy-                               
            related penalty under section 6662(a) for negligence in the                               
            amount of $1,740.  Respondent has since conceded that petitioner                          
            is not liable for this penalty.                                                           








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