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Number 1, and Friedmann Investors Number 2. It appears
that the business of these partnerships involved
investments in real estate. A number of clients of
petitioner's Schedule C business, including some clients on
behalf of whom the expenditures at issue in this case were
allegedly made, were investors in one or more of these
partnerships. Petitioner was also the sole owner and
employee of Friedmann Management Corp., which allegedly
provided management services to the partnerships.
In addition to the instant case, petitioner prosecuted
a suit in District Court for refund of taxes paid with
respect to his joint return for 1987. Friedmann v. United
States, 107 F. Supp. 2d 502 (D.N.J. 2000). In that case,
the court granted the Government's motion to dismiss one
count of the complaint on the ground that it raised issues
that had not been set forth in the claim for refund, and
the court granted summary judgment as to the other count
of the complaint, involving certain consulting fees that
petitioner claimed as an expense deduction on his Schedule
C, Profit or Loss From Business. According to the court,
the consulting fees were not deductible because petitioner
had admitted in his complaint that the consulting fees were
not income to, nor a business expense incurred by,
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