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did not report any income from the contract labor on their return
for 1996. There were also checks written to petitioners’
daughter and checks written to the University of Kentucky where
petitioners’ daughter attended. Petitioner also deducted loan
payments as business expenses.
Petitioners used various delay tactics to avoid providing
the necessary substantiation. Petitioner failed to attend most
of the substantiation conferences that respondent’s revenue agent
scheduled with petitioner, and petitioner frequently failed to
notify respondent’s revenue agent in advance that he would be
unable to attend the conference. Petitioner would even miss
conferences that were scheduled at petitioner’s law office. When
the revenue agent appeared at petitioner’s office for a
substantiation conference, petitioner’s secretary told the agent
that petitioner was not in the office and that she did not know
where petitioner was or even if he was expected in the office
that day. Petitioner often had to reschedule the substantiation
conferences.
Respondent’s revenue agent testified that petitioner
rescheduled 13 different times. The excuses petitioner gave to
respondent were numerous and varied. Petitioner missed the
conferences or needed to reschedule the conferences for the
following reasons: (1) His mother was ill, (2) his father was
ill, (3) his college roommate was ill, (4) a close friend died,
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