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On this record, the Court sustains respondent on the
disallowance of petitioners' noncash charitable contributions for
the 3 years at issue. As to the cash contributions, the Court,
pursuant to its discretionary authority under Cohan v.
Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930), allows
petitioners cash contribution deductions of $200 for each year at
issue.
With respect to petitioners' unreimbursed employee business
expenses and other miscellaneous deductions, the following
amounts were claimed on their returns, prior to application of
the 2-percent limitation under section 67(a):
1997 1998 1999
Unreimbursed employee expenses $8,872 $11,325 $5,372
Tax preparation 200 400 500
Total $9,072 $11,725 $5,872
All of these expenses were disallowed by respondent in the notice
of deficiency. The Court notes that the unreimbursed employee
expenses equal 26.4 percent, 16.5 percent, and 14.4 percent of
6(...continued)
in question, it is evident from petitioners' testimony at trial
that their claimed noncash contributions, at least for some of
the years in question, were in excess of $500. It is evident to
the Court that petitioners' return preparer intentionally placed
the amounts of their noncash contributions on their returns at
under $500 to avoid compliance with sec. 1.170A-13(b)(3), Income
Tax Regs.
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