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(5) he needed to attend a closing, (6) he needed to attend a
closing for a friend, (7) he needed to attend a closing for his
law firm, (8) the weather was too bad, (9) he was working on a
political campaign, (10) he had to be in court, (11) he was too
busy with his law practice, and (12) he was stung by a wasp.
Because of petitioner’s excuses to reschedule the substantiation
conferences, this matter languished for more than 2 years in
Exams.
After 2-1/2 years of futile attempts at rescheduling
substantiation conferences with petitioners, respondent issued a
statutory notice of deficiency (Notice) on September 6, 2001. In
the Notice, respondent disallowed $67,906 claimed by petitioners
on Schedule C-15 as ordinary and necessary expenses incurred in
operating petitioner’s law practice, $22,828 claimed by
petitioners on Schedule C-26 as ordinary and necessary expenses
incurred in serving as a divorce referee, and $7,541 claimed in
Schedule E rental losses.7 Respondent also assessed an accuracy-
5 Regarding petitioner’s law practice, petitioner failed to
provide documentation to substantiate car expenses, utilities,
phone, travel expenses, taxes and licenses, contract labor, dues
and publications, office expenses, legal and professional
services, insurance, and filing fees.
6 Regarding petitioner’s divorce referee services,
petitioner failed to substantiate car expenses, contract labor,
insurance, interest, office expenses, and travel expenses.
7 Respondent also increased petitioners’ Schedule C gross
receipts by $88,587. Respondent subsequently conceded, however,
(continued...)
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