Michael J. Rovell - Page 6

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               First, as to the issue of State and local taxes paid, we are           
          persuaded from our review of the entire record before us that the           
          $8,000 in canceled checks submitted at trial was paid to the                
          State of Illinois for personal taxes owed by petitioner and not             
          for those owed by his business.  We find petitioner’s testimony             
          credible that these checks were for State and local income taxes            
          personally owed to the State of Illinois.  We are further                   
          convinced by the check registry submitted at trial that the                 
          checks at issue were, in fact, paid for personal State income               
          taxes owed.  We believe petitioner’s testimony that his law                 
          practice was not operating as a corporation during the year in              
          issue and that these checks were not paid for any State or local            
          taxes on its behalf.  Finally, we note that the State and local             
          tax deduction at issue was claimed only on petitioner’s Schedule            
          A and not his Schedule C, Profit or Loss From Business, where               
          taxes paid for his business would be deducted.  Accordingly, we             
          hold that petitioner is entitled to an itemized deduction in the            
          amount of $8,000 for State and local taxes paid in 2001.                    
               With respect to petitioner’s deduction for tax preparation             
          fees, at trial, petitioner explained that these expenses were               
          primarily for legal services.  Although petitioner did submit two           
          letters from Mr. Moss listing the nature of the services provided           
          to petitioner, it is unclear, both from the letters and from                
          petitioner’s testimony what portion of these services was                   

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