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respondent tries to sweep the stage of all his deductions by
denying that petitioner’s playwriting is a trade or business.
The parties were unable to negotiate a very extensive
stipulation, and petitioner arrived at trial with an abundance of
documentation for his 1997 expenditures. This threatened to
force the Court into an item-by-item examination.12 To make
review more efficient, the parties were ordered to file a
supplemental stipulation.
Even with an extension, it became clear that the parties
would be unable to agree, so petitioner was ordered to file a
supplemental statement of facts organizing and explaining his
claimed expenses by category. Respondent was then ordered to
file comments.
We must address three issues:
1) Was petitioner’s playwriting an activity entered into
for profit?
2) If it was, did petitioner meet his burden in
substantiating each expense and its relationship to his
playwriting activities as required under the Code?
3) Does petitioner owe an accuracy-related penalty?
12 Such work has been known to spark a change in careers.
See I Wanna be a Producer on “The Producers” (Sony Classical)
(describing relative attraction of theater life to dealing with
accounting details).
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