George H. Richards - Page 6




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               Petitioner filed a 1997 Federal income tax return1 in which            
          he claimed, among other items, head-of-household filing status,             
          dependency exemption deductions for his three children, and an              
          alimony deduction of $2,515.                                                
               Petitioner filed an amended 1997 Federal income tax return             
          dated May 15, 2000, in which he increased the amount of his                 
          alimony deduction to $4,991.  With his amended return petitioner            
          included a Schedule C relating to his drafting activity on which            
          he reported gross income of $3,840 and a net loss of $1,548.                
          Petitioner deducted the following expenses on his Schedule C:               
          Expense                                                Amount               
          Car and truck                                         1$186                 
          Depreciation and sec. 179 expense                       3,485               
          Office expense                                          57                  
          Rent or lease--vehicles, machinery, and equipment       189                 
          Rent or lease--other business property                   1401               
          Repairs and maintenance                                 30                  
          Supplies                                                181                 
          Taxes and licenses                                        90                
          Utilities                                               289                 
          Other expenses (books)                                  16                  
          Expenses from business use of house                  464                    
          Total                                                   5,388               
                    1  The exact amount of this expense is unclear                    
               from the copy of the Schedule C but has been derived                   
               using the total.                                                       
               Ms. Richards filed a separate income tax return for the 1997           
          tax year.  On Schedule A, Itemized Deductions, attached to her              


               1  The return was electronically filed.  This is relevant              
          with respect to the issue of whether a waiver was attached to the           
          return, as will be discussed infra.  Sec. 152(e)(2)(B).                     





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