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of the revenue agent who had examined petitioner’s returns and
direct testimony of petitioner. The second day of trial also
covered petitioner’s attempts to prove additional deductions
using amended returns for petitioner and the trusts.
More than 3 months after the second day of trial, and
shortly before posttrial briefs were originally due, respondent
and petitioner entered into a superseding stipulation of settled
issues that resolved many of the issues previously in dispute
between the parties. The parties stipulated that the trusts were
invalid for Federal income tax purposes, and that all the trust
income and deductions should be allocated to petitioner. In
addition, both petitioner and respondent made substantial
concessions regarding the deficiencies. The following table
shows the amount of Schedule C deductions and cost of goods sold
originally claimed, the amount that respondent has agreed to
allow, the disallowed amount that petitioner has conceded, and
the amount that remains in dispute:
1996 1997
Claimed $574,430 $619,094
Allowed (280,195) (426,551)
Disallowed (15,870) (192,543)
Disputed 278,365 ---
The parties also stipulated that petitioner failed to report
income of $62,061 in 1997, and that petitioner is entitled to
deductions on Schedule A, Itemized Deductions, of $21,929 for
1996 and $21,061 for 1997, subject to any statutory limitations
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