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hearing, and we conclude that a hearing is not necessary. Rule
232(a)(3). We decide the matter before us based on the record.
In a statutory notice of deficiency dated November 1, 1994,
respondent determined a deficiency in petitioners' 1992 Federal
income tax in the amount of $7,888 and an accuracy-related
penalty pursuant to section 6662 in the amount of $1,578. In the
notice of deficiency, respondent disallowed the following
expenses claimed by petitioners on their 1992 return on the
ground that petitioners had not substantiated the claimed
deductions:
Schedule C Auto expenses* $7,583
Schedule C Supplies** 4,639
Schedule C Travel 1,745
Schedule C Meals and
entertainment 1,289
Schedule E Expense 10,908
Schedule E Depreciation 4,505
Schedule A Taxes 565
* This amount consists of auto expenses of $3,743 from
Primerica Schedule C and commissions of $3,840 from the
Product Wholesale Distribution Schedule C.
** This amount consists of $2,886 for supplies claimed
on the Primerica Schedule C and $1,753 for supplies
claimed on Product Wholesale Distribution Schedule C.
Respondent also increased a $5,248 tax on an early
distribution reported by petitioners on their return to $6,268,
resulting in an upward adjustment of $1,020.
Petitioners timely filed their petition on January 30, 1995,
in which they disagreed with each of respondent's above-mentioned
adjustments.
After the petition was filed, the case was assigned to an
Appeals officer in Tampa, Florida. Because the principal issue
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