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Respondent determined a deficiency of $9,347 in petitioners'
1994 Federal income tax.
After a concession by respondent, the issues remaining for
decision are whether petitioners are entitled to claim car and
truck transportation expenses and telephone expenses as business
expenses on Schedule C.2
Some of the facts have been stipulated and are so found.
Petitioners resided in Yuba City, California, at the time they
filed their petition.
Background
During the taxable year Albert William Dehr III (petitioner)
was self-employed as a "financial litigation consultant", engaged
in "RICO investigations, [and] financial investigations in major
civil litigations" for attorneys in San Francisco, Denver,
Washington, and Florida. Petitioner's consulting activities
included reviewing financial records, conducting interviews,
assisting attorneys with depositions, locating individuals, and
drafting reports.
Petitioner was also a member of a real estate partnership,
Bakos & Dehr Realty (Bakos & Dehr). Mr. Bakos was "an attorney
2The parties agree that petitioners' gross receipts for the
year 1994 are $24,838 as reported on Schedule C of the return.
Respondent determined that petitioners are not entitled to claim
the earned income credit. This is a computational adjustment
that will be resolved by our decision on the other issues in this
case.
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