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commenced in an attempt by petitioners to save business property
from seizure by the IRS. Mr. Nordbrock testified that the only
creditor in the bankruptcy was the IRS, and the debt to the IRS
resulted from $75,000 in preparer penalties. See United States
v. Nordbrock, 38 F.3d 440 (9th Cir. 1994). Respondent argues
that these expenses are personal expenses and not deductible
business expenses. Petitioners have not persuaded us that the
bankruptcy-related expenses were ordinary and necessary business
expenses and have not provided us with a basis for allocating the
fees between personal services and business services.
Petitioners presented copies of checks that were payable to the
attorney who filed the bankruptcy proceeding. They did not,
however, present any invoices that explained the services
provided by the attorney. See In re Collins, 26 F.3d 116 (11th
Cir. 1994); Dowd v. Commissioner, 68 T.C. 294, 303-304 (1977).
Some of the payments claimed as deductible were made to the
trustee in bankruptcy. Those payments relate to the preparer
penalties, inasmuch as petitioner testified that the only
creditor in the bankruptcy was the IRS and that the seizure of
property that he was trying to defeat was for $75,000 in unpaid
preparer penalties that were assessed against him. The nature of
the payments is not clear. If the payments were for monthly
fees, as petitioner testified, they suffer from the same
infirmity as the legal fees. If they were payments on account of
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