After being audited by the IRS, the Taxpayer received a Notice of Deficiency proposing additional income tax (including penalties) in the amount of $201,364.80. In the Notice of Deficiency, the IRS disallowed deductions for Schedule E rental expenses, Section 179 expenses, and micro-captive insurance expenses. DeWitt Law filed a Petition in U.S. Tax Court challenging the Notice of Deficiency. The Tax Court entered a Decision reducing the tax liability to $68,396.