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statement. In addition to petitioner's and Mr. Bistodeau's
testimony, the record contains a handwritten log of petitioner's
activities with respect to respondent's criminal investigation of
Romer and with respect to Romer's clients. In addition, Karen
Coon, a certified public accountant who was associated with Romer
as an independent contractor, testified that petitioner generally
worked in the Minneapolis office 2 or 3 days each week during
1993. She also verified that he posted a monthly schedule in the
Minneapolis office which showed when he would be working in the
office. We find that this corroborative evidence is sufficient
to establish the time, place, and business purpose elements of
petitioner's traveling expenses and conclude that the arrangement
satisfies the section 1.62-2(e), Income Tax Regs., substantiation
requirement.
We have also considered respondent's broad assertion that
petitioner and Mr. Bistodeau conspired to label petitioner's
compensation from Romer as reimbursements under the arrangement
in order for petitioner to avoid income tax liability and for
Romer to avoid employment tax liability on the amount paid to him
during 1993. Based on our review of the record, we find that a
bona fide arrangement existed between petitioner and Romer during
1993. We reject respondent's conspiracy theory because he
offered absolutely no evidence in support of the alleged tax
avoidance scheme.
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