Chong-Kak and Sang-Ok Lee - Page 17

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          payments for:  (1) Wages of temporary employees, (2) meals                  
          provided to Hamalee's employees on its premises, and (3) fuel and           
          tolls.  Petitioners generally rely on the testimony of Ms. Chong            
          to support their allegations of these unreported expenditures and           
          the amounts thereof.  Hamalee has no records to support these               
          purported expenditures, and petitioners ask the Court to estimate           
          the expenditures' dollar amounts.                                           
               We decline petitioners' invitation to estimate the amount of           
          Hamalee's claimed expenditures.  Although petitioners are correct           
          in that we may estimate the amount of unsubstantiated expenses              
          when we have a basis to do so, Cohan v. Commissioner, 39 F.2d 540           
          (2d Cir. 1930), we do not have a sufficient basis to make an                
          estimate here.  See Vanicek v. Commissioner, 85 T.C. 731, 742-743           
          (1985).  In fact, the record does not even persuade us that                 
          Hamalee incurred the claimed expenditures, or, if it had, that              
          these expenditures were ordinary and necessary business expenses            
          under section 162.  Whereas petitioners would have us find, based           
          solely on the testimony of Ms. Chong, that Hamalee incurred the             
          purported expenditures in the amounts that she so claimed, we               
          refuse to do so.  Ms. Chong's testimony on this issue is                    
          unsupported by the record, and we find it to be somewhat                    
          incredible.  We will not rely on it.  LaBow v. Commissioner,                

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