Rodolfo Garcia, Jr. and Penny A. Garcia - Page 4

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               (2) Whether section 274(a)(3) precludes Mr. Garcia from                
          deducting golf club membership fees5 as ordinary and necessary              
          business expenses under section 162(a).  We hold it does.                   
          Some of the facts have been stipulated and are so found.                    
          The stipulation of facts and accompanying exhibits are                      
          incorporated by this reference.  Petitioners resided in La Porte,           
          Texas, at the time they filed the petition.                                 
               In 2000, Mrs. Garcia was an English teacher, and Mr. Garcia            
          was the head golf coach at Deer Park High School in Houston,                
          Texas.  Petitioners claimed deductions for employee business                
          expenses on Schedule A, Itemized Deductions, of their 2000                  
          Federal income tax return in connection with Mrs. Garcia’s                  
          employment as a high school English teacher and Mr. Garcia’s                
          employment as a high school golf coach.                                     
               Mrs. Garcia claimed expenses for movies, theater tickets,              
          videos, supplies, film and film developing costs, drycleaning,              
          book and periodical subscriptions, gifts, and travel.  The $365             
          movie expense included movie theater admission tickets for Mrs.             
          Garcia to see 73 movies she deemed relevant in teaching English.            


               5In the stipulation of settled issues, the parties still               
          dispute $144 for supplies, $35 for cell phone expenses and $3 for           
          meals regarding expenses Mr. Garcia claimed in addition to the              
          country club membership fees of $1,628.  Because petitioners                
          failed to address the expenses other than the country club fees             
          during trial or on brief, petitioners are deemed to have conceded           
          these disputed amounts.  The only expenses still at issue                   
          regarding expenses Mr. Garcia claimed are the $1,628 country club           
          membership fees.                                                            




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