-37-
[sic] counsel may raise. Petitioners believe they
should prevail.
We sustain respondent’s determination that petitioners are not
entitled to deduct these claimed expenses (except for $3,668 that
respondent concedes is deductible).
2. 1998
Of the Schedule C expenses (other than home office
deduction) disallowed for 1998, petitioners do not challenge any
of those expenses.
3. 1999
Of the Schedule C expenses (other than home office
deduction) disallowed for 1999, petitioners challenge only the
expenses for lease ($7,476), travel ($4,129), and meals ($9,789).
a. Lease Expense
Petitioners argue that the $7,476 claimed as a lease expense
was actually a legal expense that is deductible as such. We do
not find that any of that amount is deductible. Petitioners’
entire argument in brief as to this point is that “The amount
listed on Schedule C for lease expense was misclassified. The
$7,476 amount related to legal fees related to a tax litigation
matter and should be fully deductible (TR2-130:1-12; TR 225:17-
227:14)”. The reference to “TR2-130:1-12” is to the following
testimony by LeBloch on direct examination:
There is a mistake on the Schedule C attached to
the 1997 [sic] return, and the mistake is a
misclassification. There was listed an amount on the
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