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portion of an adjustment in the notice of deficiency, and (2) in
the alternative, a motion to shift the burden of proof to
respondent on this adjustment if the Court denies the motion to
dismiss. Respondent filed a notice of objection to both motions.
Prior to the hearing on these motions, the Court ordered
petitioner to file a supplemental motion to dismiss for lack of
jurisdiction to clarify the factual premise on which the motion
to dismiss for lack of jurisdiction was based. Petitioner filed
the supplemental motion prior to the hearing.
In a notice of deficiency, respondent determined a
deficiency of $132,088 in Federal income tax for petitioner's
1991 calendar year. This deficiency is based upon respondent's
disallowance of $658,000 legal and professional fees that,
according to the deficiency notice, were claimed as ordinary and
necessary business expenses on petitioner's 1991 Federal income
tax return. The disallowed expenses consisted of the following
expenses listed in the notice of deficiency:
Legal advice $473,453
Legal advice 565
Accounting fees--comfort letter 17,350
Accounting fees--opinion 15,250 $506,618
Unidentified costs 151,382
Total disallowed expenses2 $658,000
2
Respondent also adjusted the environmental tax deduction and
the credit for prior year minimum tax. These adjustments are not
the subject of petitioner's motions and, therefore, are not
before the Court in this proceeding.
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Last modified: May 25, 2011