Dale H. Sundby and Edith Littlefield Sundby - Page 17

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               Finally, we address a point petitioners raised at trial.               
          Petitioners assert that the explanation in the notice of                    
          deficiency regarding the disallowance of the Schedule C expenses            
          was too vague to allow for an adequate response.  We agree that             
          the explanation as a whole suffers from a certain lack of clarity           
          or specificity.  However, the notice of deficiency in effect sets           
          forth several alternative theories under which respondent                   
          determined that petitioners are not entitled to any of the                  
          Schedule C deductions.  The Commissioner generally is permitted             
          to set forth alternative grounds for adjustments in a notice of             
          deficiency, as well as to take alternative positions at trial.              
          Doggett v. Commissioner, 66 T.C. 101 (1976).  On account of our             
          holding, however, we need not address every such argument                   
          respondent raised in this case.                                             
               Reviewed and adopted as the report of the Small Tax Case               
                                             Decision will be entered                 
                                        for respondent.                               

          purchaser as “Edith Littlefield Sundby, SBMI Interiors”.  Another           
          invoice labeled “office decorative fabric for couch” listed the             
          purchaser only as “SBMI Interiors”, while numerous other invoices           
          for similar items list only petitioner wife as the purchaser.  No           
          mention is made of SBMI Interiors elsewhere in the record, and              
          petitioners have not argued that petitioner wife was engaged in a           
          trade or business of any type, other than with respect to the               
          $866 in income that she received from Personalized Workout of La            
          Jolla, Inc.                                                                 

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