Kenneth Andrew Baratelle - Page 3




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          was earning a salary in excess of $243,000 per year.  Following             
          the termination of his employment, petitioner promptly began to             
          look for an income source to replace his lost income.  He                   
          ultimately decided to start a manufacturing consulting business,            
          KAB Consulting, and did so in 1994.  On Schedule C of his 1994              
          Federal income tax return, petitioner deducted expenses allegedly           
          paid in connection with KAB Consulting.                                     
               Respondent audited petitioner’s 1994 return and, in a notice           
          of deficiency dated February 19, 1998, proposed adjustments                 
          disallowing all of petitioner’s Schedule C deductions because               
          petitioner failed to substantiate them.  During the trial in this           
          case, respondent modified his litigating position and conceded              
          that the following adjustments to petitioner’s Schedule C                   
          deductions were appropriate:                                                
























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Last modified: May 25, 2011