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combined wages of $75,905 and $81,855, respectively, for 1999 and
2000.
Prior to the years at issue, petitioners' Federal income tax
returns were prepared by a commercial tax preparation service.
For the 2 years in question, however, petitioners' returns were
prepared by Robin Beltran upon the recommendation of several of
petitioners' friends.3 Petitioners had never previously claimed
itemized deductions on their Federal income tax returns. For
each year in question, Mr. Beltran advised petitioners that no
documentation was necessary to substantiate their claimed
itemized deductions. The itemized deductions claimed on the
returns were arbitrarily determined by Mr. Beltran.
For each of the years in question, petitioners claimed
itemized deductions on a Schedule A, Itemized Deductions, of
their Federal income tax return. For 1999, petitioners claimed
itemized deductions totaling $27,702, of which $19,755 was
disallowed by respondent. For 2000, petitioners deducted
$27,892, of which $11,028 was disallowed by respondent.
Petitioners, nevertheless, were allowed itemized deductions for
both years, since the total of their other claimed and allowed
deductions exceeded the standard deduction under section 63(c).
3 The Court notes that this case is one of numerous cases
heard by the Court involving tax returns prepared by Mr. Beltran,
which essentially involve the same deductions at issue here.
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