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Following concessions, the issues for decision are:
1. Whether the statute of limitations bars assessment and
collection of petitioners’ tax for 1999. We hold that it does
not.
2. Whether petitioners bear the burden of proof relating to
issues other than fraud. We hold that they do.
3. Whether petitioners had a greater amount of (a) expenses
for William S. Fairey, Jr.’s (petitioner) consulting activity,
(b) unreimbursed employee business expenses, or (c) itemized
deductions than respondent allowed. We hold that they did not.
4. Whether petitioner is liable for the fraud penalty under
section 6663 for 2000. We hold that he is with respect to the
deficiency caused by the fact that he (a) deducted a purported
$7,500 payment three times on petitioners’ 2000 tax return which
they never paid; and (b) deducted $54,000 of loan repayments as
legal and professional fees.
5. Whether petitioners are liable for the accuracy-related
penalty under section 6662(a). We hold that they are to the
extent discussed below and as reduced by respondent’s
concessions.1
1 Respondent conceded that petitioners may deduct $92.49
paid to Media Week and $5,500 paid to Nelson Hesse in 1999, and
an Internet expense of $256.81.
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