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years in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
After concessions, the issues for decision are
whether petitioners are: (1) Entitled, pursuant to section 166,
to a business bad debt deduction relating to 1993; (2) entitled,
pursuant to section 162, to a business expense deduction
relating to 1994; and (3) liable, pursuant to section 6662(a),
for accuracy-related penalties relating to the deductions.
FINDINGS OF FACT
Mr. Martens, during adolescence, college, and law school,
worked at The Stork Shop, Inc. (the Stork Shop), a maternity wear
retail store owned by his mother, Estele Wooden. In 1966, she
gave him a joint tenancy with right of survivorship in the stock
of the Stork Shop. The store was located in Oklahoma City,
Oklahoma, approximately 200 miles from Dallas, Texas, where
petitioners, husband and wife, have resided and worked since
1982. Mr. Martens has been an attorney since 1974, and Ms.
Martens was a homemaker during the years in issue.
Ms. Wooden operated the Stork Shop until it ceased
operations in 1993. Mr. Martens made management decisions, and
Ms. Martens regularly bought apparel for and monitored inventory
levels at the store, but neither of them received any
compensation. Petitioners made a series of loans to the Stork
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