Fatai O. and Mary T. King - Page 2

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          section references are to the Internal Revenue Code in effect for             
               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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