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In Meredith, the taxpayer sought deductions for 1961
expenditures in connection with the 1960 suits. We summarized
the situation as follows (47 T.C. at 447):
While the petitioner’s first action undoubtedly arose
out of his business relationship with Deere, and the costs
of that suit were ordinary and necessary expenses of his
business, by the time he initiated the action against the
judge and filed the last suit against Deere, in violation of
the injunction, the original cause of action had ceased to
have significance. The controversy had become a personal
struggle, a vendetta, and the expenses incurred had no
proper relationship to the petitioner’s business.
The action brought against Judge Van Oosterhout related
to decisions of the Court of Appeals made in the
petitioner’s third suit against Deere and in Deere’s suit
for an injunction. The business issue had been decided
against petitioner long before these cases were initiated.
There was no business relationship to the expenses of the
action against the judge, which was a personal accusation
completely without merit.
For the reasons stated, we sustain the respondent’s
determination.
In contrast, the instant case is only the second one in
which petitioner has filed objections to the Trustee’s
accounting; petitioner proceeded only by way of the Objections
and only after the Trustee initiated an action; and the Trustee’s
accounting directly affected petitioner’s income from the Ivey
Trust. Our analysis and conclusions are not inconsistent with
the determinations of the California Court.
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