John D. Fairchild - Page 7




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               In his brief, petitioner contends only that his 1993                   
          liabilities were discharged in bankruptcy.  He does not address             
          any of the issues raised in the notice of deficiency.  We may               
          treat those issues as conceded by petitioner.  Rothstein v.                 
          Commissioner, 90 T.C. 488, 497 (1988); Burbage v. Commissioner,             
          82 T.C. 546, 547 n.2 (1984), affd. 774 F.2d 644 (4th Cir. 1985);            
          Reaves v. Commissioner, 31 T.C. 690, 721-722 (1958), affd. 295              
          F.2d 336 (5th Cir. 1961).  However, for reasons discussed next,             
          the result would be the same if we did not treat those issues as            
          conceded.                                                                   
          B.   Whether Petitioner May Deduct Expenses for Labor and Taxes             
               in Amounts Greater Than Respondent Allowed                             
               Petitioner deducted labor expenses of $63,000 on Schedule C            
          of his 1993 return.  Respondent determined that petitioner did              
          not substantiate $25,519 of those expenses.5  At trial,                     
          petitioner testified that he had no evidence to support his                 
          position, but he said that the Social Security Administration               
          does.                                                                       
               Petitioner deducted $29,978.80 for “Taxes and Licenses” on             
          his 1993 return.  Respondent determined that petitioner did not             
          substantiate $19,896 of that amount.6  Petitioner testified                 



               5  Respondent concedes that petitioner had labor costs of              
          $37,481.                                                                    
               6  Respondent concedes that petitioner paid taxes and                  
          licenses expenses of $10,082.80 in 1993.                                    





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