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section references are to the Internal Revenue Code in effect for
1995.
The Kings, who resided in Wyndmoor, Pennsylvania, when they
filed their petition, owned and operated a newsstand business.
After concessions, the remaining issues are whether petitioners
are entitled to a $12,554 section 179, and a $1,845 depreciation,
deduction relating to newsstand construction. In support of
these deductions, petitioners presented the Internal Revenue
Service and the Court with canceled checks and an affidavit
purportedly from Leroy Lee, who, petitioners contended, did the
newsstand construction. The checks had been altered, and the
affidavit was false, handwritten by Mr. King, and signed “Lee
Leroy” rather than “Leroy Lee”.
When respondent mistakenly went to Mr. King’s business
address to serve a subpoena to Mr. Lee, Mr. King posed as Mr. Lee
and accepted service of the subpoena. In response to Mr. Lee’s
testimony that he had worked only on petitioners’ home and did
not give Mr. King an affidavit, Mr. King testified that “Lee
Leroy” rather than “Leroy Lee” had worked on the newsstands, and
that Mr. Leroy “wasn’t coming” to testify. Mr. King knowingly
submitted false and altered documents. In addition, his
testimony was deliberately misleading, evasive, and untruthful.
Petitioners are not entitled to the claimed deductions. In
addition, Mr. King intentionally underreported taxable income and
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