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2 For 1995, the total Schedule C expenses was $49,745.96.
Respondent allowed $11,023.03 and disallowed $38,722.93.
3 For 1996, respondent disallowed all the deductions claimed
on Schedule C.
As a result of these adjustments, respondent determined that
petitioners were liable for additional self-employment taxes and
the accuracy-related penalty under section 6662(a) for each of
the years in question.
In the stipulation of facts, respondent conceded an
unreported income adjustment of $26,335.72 for 1995. At trial,
respondent conceded that petitioners were entitled to Schedule C
deductions for meals and entertainment expenses (prior to the 50-
percent limitation) totaling $112.45 for 1994. On brief,
petitioners conceded that, during 1995 and 1996, petitioner’s
principal place of business or tax home was Los Angeles,
California.
The first issue is whether the tax home or principal place
of business of petitioner was Memphis, Tennessee, or Los Angeles,
California, during 1994.4 Petitioners contend the tax home
4 Since petitioners conceded that petitioner’s tax home
for 1995 and 1996 was Los Angeles, petitioners are not entitled
to the claimed deductions for away from home expenses relating to
petitioner’s employment in Los Angeles for those years. This
would include, for 1995, $13,240.00 apartment rental expenses and
an $8,400 per diem amount for meals (prior to the 50-percent
limitation), as well as approximately $863.80 of travel expenses
for car rental and air travel between Los Angeles and Memphis
(continued...)
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