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dispute exists between the parties concerning whether the expense
is properly characterized as contract labor expense or wage
expense subject to employment taxes. Although petitioners raised
this as an issue in their petitions to this Court, the parties
stipulated that respondent had not issued a notice of
determination concerning this issue and that it is not currently
before this Court. See sec. 7436. As such, only the amounts
paid to the individuals in 1996--not the characterization of the
payments--is at issue. The amount of the payments was not
addressed at trial, however, and nothing was produced to
substantiate any such payments in excess of what respondent
determined had been made.
Petitioners have failed to substantiate any of the above
alleged expenses as business expenses deductible under section
162(a). Sec. 6001; sec. 1.6001-1(a), (e), Income Tax Regs. We
therefore sustain respondent’s disallowance of the deductions
therefor.
Finally, petitioner argues that he is entitled to an
additional deduction which he claimed on an amended return form
which he filed for 1995. Petitioner intended to use an amended
return to make a variety of changes to amounts of income and
deductions reported on the original 1995 return. These changes,
resulting in a reduction of petitioner’s reported adjusted gross
income from $80,867 to $11,582, were not accepted by respondent
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