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Trial of this case began on January 28, 1998. At trial,
petitioner conceded the capital gain and loss issues for 1993 and
1995. However, petitioner was not prepared to go forward with
his case concerning the claimed business expenses on Schedule C
for 1993 and 1994. We continued the case to March 17, 1998, and
instructed petitioner to be prepared to present the facts of his
case along with the necessary documents and records. Despite the
Court’s warning, petitioner was not prepared to discuss the
substantiation issue, although some documents were stipulated
without explanation or elaboration.
Petitioner has a Ph.D. in electrical engineering. In 1993,
he quit his job as an aerospace engineer in order to pursue his
invention of a computer-controlled nozzle sprinkler system
(sprinkler system). The sprinkler system consisted of a
computer-driven rotating watering device for gardens and lawns.
Also in 1993, petitioner created a California corporation
called Computer Control Systems, Inc. (CCSI). CCSI filed its
articles of incorporation on April 6, 1993. Petitioner and his
wife were the only shareholders. According to petitioner, CCSI’s
business was to produce the sprinkler system to sell to
customers. Petitioner was named the vice president of
engineering, and his wife was named president of CCSI. A
separate checking account was opened in CCSI’s name.
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