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All Rule references are to the Tax Court Rules of Practice and
Procedure.
Respondent determined deficiencies in petitioners' 1994 and
1995 Federal income taxes in the amounts of $990 and $473,
respectively, and accuracy-related penalties under section
6662(a) for the years 1994 and 1995 in the amounts of $198 and
$110, respectively.
After concession by both parties,1 the issues for decision
are: (1) Whether petitioners are entitled to claimed bad debt
deductions under section 166 for 1994 and 1995; (2) whether
petitioners failed to include interest income in their 1994
Federal income tax return; and (3) whether petitioners are liable
for the accuracy-related penalties under section 6662.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioners resided in
Baldwin, Michigan, when the petition in this case was filed.
All references to petitioner are to Clair Worthington.
1 Respondent conceded: (1) Petitioners are entitled to a
legal and professional expense deduction for the year 1994 in the
amount of $4,500; (2) petitioners did not receive taxable refund
income in the year 1995 in the amount of $828; (3) petitioners
are entitled to a tax preparation expense deduction for the year
1994 in the amount of $180, with $90 being allocated to Schedule
A and $90 being allocated to Schedule C. Petitioners conceded
that they are not entitled to the entire claimed legal and
professional expense deduction of $6,080 for the year 1995 but
are only entitled to such a deduction for that year in the amount
of $2,080.
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