-5-
payment made by petitioner to settle the lawsuit involving the
lease.
Petitioners’ 1997 return was prepared by Julie Brown, who
also had some responsibility for bookkeeping and check writing in
connection with petitioner’s law practice, but who has no
specialized training in accounting or bookkeeping. At trial, she
testified to the many errors and irregularities in connection
with the records of petitioner’s law practice, as well as items
shown on their 1997 return. Taking into account an extension to
file, that return was due to be filed on or before August 15,
1998,4 but it was not filed until October 16, 1998.
In the notice of deficiency that forms the basis for this
case, respondent allowed $62,501 of the rent deduction claimed on
the amended Schedule C. According to respondent, the portion of
the rent deduction not allowed ($98,471) is the amount that
duplicates rent with respect to the lease already deducted and
allowed on petitioners’ 1993, 1994, and 1995 Federal income tax
returns. Other adjustments made in the notice of deficiency have
been agreed to by the parties and need not be discussed.
4 The parties stipulated that the Apr. 15, 1998, normal
filing due date was extended at least until Aug. 15, 1998. No
explanation has been provided regarding the computation in the
notice of deficiency showing the due date as Apr. 15, 1998.
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