Efrain J. and Josefina Xuncax - Page 15




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          were charged $80 per occurrence for false alarms on February 1,1            
          May 12, June 28, and August 28, 1996.  The record also contains             
          delinquent status notices dated November 5 and December 3, 1996,            
          concerning the May and the August alarms, respectively.  The                
          bills and notices warn that operating an alarm system without a             
          permit is a misdemeanor.  Thus, additional impediments beyond               
          section 162(f) are present on these facts.  The delinquency                 
          notices call into question whether at least some of the charges             
          were paid in 1996, so as to be deductible by a cash basis                   
          enterprise in that year.                                                    
               Second, petitioners provided a “Garment Penalty Assessment             
          Order” from the State of California Department of Industrial                
          Relations, Division of Labor Standards Enforcement, for a                   
          violation of section 2678 of the California Labor Code.  Cal.               
          Lab. Code sec. 2678 (West 1989 & Supp. 2001).  The assessment was           
          issued on October 2, 1996, and the stated grounds involve a                 
          failure to maintain accurate records.  However, the evidence also           
          includes a letter from the agency dated April 18, 1997, stating             
          that the penalty had not been paid as of that date.  Petitioners            
          therefore are entitled to no deduction in 1996.                             




               1  Although the pertinent stipulation references Feb. 2,               
          1996, as the date of the alarm, the bill specifies an alarm date            
          of “02/01/96”.  The minor discrepancy is immaterial for our                 
          purposes.                                                                   





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