Haas & Associates Accountancy Corporation - Page 9




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               On May 15, 1999, respondent’s trial counsel requested                  
          petitioners’ counsel to provide complete copies of portions of              
          the transaction documents that previously had not been provided             
          to respondent’s representatives.                                            
               On June 3, 1999, respondent rejected petitioners’ qualified            
          offer.                                                                      
               On June 16, 1999, the trial of the underlying substantive              
          tax issues in these consolidated cases was held in San Francisco,           
          California.                                                                 
               On June 21, 2000, we filed our Memorandum Opinion in Haas &            
          Associates Accountancy Corp. v. Commissioner, T.C. Memo. 2000-              
          183, and we held as follows:                                                

               (1) The $190,000 paid by Haas in connection with the                   
               separation of the accounting practice and a covenant not to            
               compete was amortizable as an ordinary business expense                
               deduction over 3 years as claimed by petitioners on their              
               respective Federal income tax returns;                                 
               (2) The $63,500 paid by Haas allegedly for consulting                  
               services represented a nondeductible startup expense that              
               required capitalization; and                                           
               (3) Because petitioners prevailed entirely on the treatment            
               of the $190,000 and because petitioners had a reasonable               
               basis for their claimed deduction for the $63,500 relating             
               to the consulting services, no accuracy-related penalties              
               were imposed on petitioners in connection with the above               
               Federal income tax returns that petitioners had filed.                 

               In their motion for litigation costs, petitioners seek the             
          recovery of the following fees and costs incurred after the                 







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