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issues caused by his change of position. See Rule 142(a)(1).
Therefore, respondent bears the burden of proving which amounts
claimed by Lurie & Zepeda would not have been deductible if paid
without contest.
Respondent had an opportunity at trial to meet his burden of
proof. Respondent called the custodian of records for Lurie &
Zepeda to testify at trial. Respondent could have questioned the
custodian to determine the specific amounts claimed by Lurie &
Zepeda at the end of 1992, for which matters the amounts were
claimed, and whether each of the matters related to deductible
trade or business or investment matters or nondeductible personal
matters. Respondent failed to make the necessary inquiries.
It is undisputed that Lurie & Zepeda asserted a claim for
legal fees exceeding the United Ready Mixed settlement proceeds.
In connection with a later dispute between petitioner and Lurie &
Zepeda in May 1995 (after substantial payments had been made to
Lurie & Zepeda), Lurie & Zepeda recovered a judgment against
petitioner for $796,352.65.
The only amount claimed by Lurie & Zepeda that respondent
has established would not have been deductible if paid without
dispute was the $65,685.34 in legal fees and costs owing as of
1995 in connection with petitioner’s divorce. Legal fees
incurred in connection with petitioner’s divorce generally would
not be deductible. United States v. Patrick, 372 U.S. 53 (1963);
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