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disagree. Neither Hughs nor Zima had copies of all of
petitioners’ checks and bank statements at any time. Zima saw
about 15 checks which he included in the stipulation of facts.
Hughs saw 30 to 40 checks, but petitioner did not allow her to
copy or keep them. Those statements do not conflict.
We conclude that petitioners may not deduct any unreimbursed
employee business expenses for Susan Fairey for the years in
issue.
2. Petitioner’s Deductions for Employee Business Expenses
Petitioners contend that petitioner may deduct unreimbursed
employee business expenses for 1999. We disagree. Although
petitioner was an employee of TruGreen for a short time in 1999,
there is no evidence that he had any unreimbursed employee
business expenses in 1999.
3. Charitable Contribution Deductions and Other Itemized
Deductions
Petitioners have not shown that they are entitled to more
charitable contribution deductions or other itemized deductions
than respondent allowed.
E. Whether Petitioner Is Liable for the Fraud Penalty for 2000
1. Contentions of the Parties and Background
Respondent contends that petitioner is liable for the fraud
penalty under section 6663 for 2000 because petitioner
fraudulently deducted (a) $7,500, which he never paid, in three
places on the 2000 return, and (b) $59,727 for legal and
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