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Edward A. Robinson III and Diana R. Robinson v. Commissioner

Filed September 5, 2002

Docket No. 9574-99


CHABOT, Judge: 

  Respondent determined a deficiency in Federal individual income tax for 1995 against petitioners in the amount of $ 29,879. 1The issue for decision is whether petitioners may deduct for 1995 the interest they paid in 1995 on their 1987 Federal individual income tax underpayment. 2


  Some of the facts have been stipulated; the stipulations and the stipulated exhibits are incorporated herein by this reference. 

  Petitioners Edward A. Robinson III (hereinafter sometimes referred to as Edward), and Diana R. Robinson resided in Louisiana when they filed their petition in the instant case. 

  A. Edward's Background  

  In 1970, Edward was graduated from Grambling State University, *** laude, with a double major in political science and English. In 1971, Edward received a master's degree in criminal jurisprudence from the State University of New York at Albany. In 1975, Edward received his law degree from Rutgers University. Edward also was awarded an honorary LL.D. from World University, in Tucson, Arizona. 

  After his Rutgers graduation, Edward worked as the chief administrator of the Louisiana Justice Department. Edward resigned from this position and opened his own law practice in 1979. Edward's law practice focused almost exclusively on personal injury cases. At all relevant times, Edward's law practice was operated as a sole proprietorship. 

  B. 1987 Return and Audit Thereof  

  During 1989, respondent audited petitioners' 1986 and 1987 joint tax returns. 3 

  On their 1987 tax return, petitioners reported $ 6,274 interest income and $ 60,677 net profit from Edward's law practice. On the 1987 Schedule C, petitioners reported $ 388,000 gross receipts, $ 18,500 cost of goods sold, and $ 308,823 deductions, leading to the $ 60,677 net profit. On the 1987 Form 1040, petitioners reported $ 3,866 chapter 1 income tax, $ 5,387 chapter 2 self-employment tax, $ 502 addition for underpayment of estimated tax, and no withholding or other payments, for a total of $ 9,755 owed. Petitioners timely paid this $ 9,755. 

  Respondent proposed adjustments to petitioners' 1987 taxable income, and a deficiency and additions to tax as shown in table 1.


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Tax Ct. Reg. Dec. (CCH) 54,863

Edward A. Robinson III and Diana R. Robinson v. Commissioner

Other History: [Appealable, barring stipulation to the contrary, to CA-5. -- CCH.]


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