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Michael G. Moore, for petitioners.
Nancy L. Spitz, for respondent.
MEMORANDUM OPINION
HALPERN, Judge: By notice of deficiency dated May 13, 1998
(the notice), respondent determined a deficiency in petitioners’
Federal income tax for 1994 in the amount of $58,632 and an
accuracy-related penalty in the amount of $11,726.40.
Petitioners have conceded certain of respondent’s adjustments
giving rise to that deficiency. The issues remaining for
decision are (1) certain adjustments by respondent to deductions
claimed by petitioners for depreciation, office expenses, rental
expenses, and expenses for meals and entertainment, (2) certain
ancillary consequences of respondent’s adjustments, and (3)
petitioners’ liability for the accuracy-related penalty.1
Some facts have been stipulated and are so found. The
stipulation of facts, with accompanying exhibits, is incorporated
herein by this reference. We need find few facts in addition to
those stipulated and shall not, therefore, separately set forth
our findings of fact. We shall make additional findings of fact
1 The deficiencies also reflect adjustments to petitioners’
itemized deductions, personal exemptions, the credit for self-
employment taxes, and the sec. 164(f) deduction for one-half of
self-employment taxes, all of which derive from the principal
adjustment and are not directly disputed by petitioners.
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