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Discussion
The nature of the issue in this case calls into question the
method of accounting used by petitioner in his law practice
during the year in issue, as well as the years 1993, 1994, and
1995. The stipulation of facts filed in this case is silent with
respect to the method of accounting used by petitioner in
computing the income and deductions shown on the Schedules C for
his law practice for those years. Given the nature of the
disputed issue in this case, the failure to stipulate what would
seem to be a fundamental point leads us to conclude that there is
no agreement between the parties with respect to it. In the
absence of an agreement between the parties regarding
petitioner’s accounting method, and in the absence of any
persuasive evidence as to petitioner’s accounting method,5 we
proceed without making any specific finding regarding the method
of account used by petitioner in computing the income and
deductions of his law practice, or whether that method changed
from year to year.
According to petitioners, petitioner is entitled to a
deduction for the $137,150 paid to the lessor in 1997 in
settlement of the lawsuit regarding the lease. Respondent agrees
5 According to the Schedules C, petitioner used the “cash”
method of accounting, but the many errors and irregularities on
the Schedule C included with petitioners’ 1997 return invite us
to ignore much of the information reported on the Schedules C.
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