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$25,748.40, $15,827, $10,516, and $373,688.60 for the years in
issue, respectively. Additionally, respondent determined an
addition to tax under section 6651(a) of $93,422.15 for failure
to file timely for 1999. At the time of trial, respondent
asserted that the correct deficiencies were in the amounts of
$1,518,890, $119,466, $78,839, $113,255, and $1,865,426 for 1995,
1996, 1997, 1998, and 1999, respectively, with accuracy-related
penalties under section 6662(a) of $303,778, $23,893, $15,768,
$22,651, and $373,085 for the years in issue, respectively. The
correct addition to tax under section 6651(a) for failure to file
timely in 1999 was recomputed as $93,271.
After concessions by the parties, the issues for decision
are:
(1) Whether petitioner, a cash basis taxpayer, must report
the damages received under a release and settlement agreement
into which he entered with the State of Texas, and, if so, what
amounts must be reported as taxable income;
(2) whether deductions that petitioner substantiated are
allowable under section 162 or 212;
(3) whether respondent may amend the answer to include
petitioner’s attorney’s fees in his reportable gross income;
(4) whether petitioner is liable for section 6662(a)
accuracy-related penalties for each of the years in issue; and
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