- 2 - FINDINGS OF FACT Some of the facts have been stipulated. We incorporate the stipulated facts into our findings by this reference. Petitioner resided in Pasadena, California, when his petition in this case was filed. Petitioner is a lawyer authorized to practice law in the State of California who, during the years at issue, was employed as an associate in a law firm. 1995 and 1996 Tax Liabilities Petitioner filed Form 1040, U.S. Individual Income Tax Return, for 1995 and 1996. On each return, petitioner reported his filing status as married filing separate and claimed three personal exemptions: One for himself, one for his wife, and one for his dependent son. Petitioner also claimed Schedule C, Profit or Loss From Business or Profession (Sole Proprietorship), business expenses of more than $50,000 on each of his 1995 and 1996 returns. In December 1997, respondent notified petitioner of changes to petitioner’s 1995 return as a result of an examination. The changes included the disallowance of two of three personal exemptions and all of the Schedule C business expenses claimed on petitioner’s 1995 return for lack of substantiation. In January 1998, petitioner sent letters to respondent requesting audit reconsideration and/or an Appeals conferencePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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