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discarded his records after petitioner Bui paid him. Dung later
testified that he retained his records until he filed his Federal
income tax return. Dung also testified that his work activity
records were destroyed after petitioner Bui paid him but that he
then created a new record reflecting the amount he was paid.
Dung further testified that this new record was discarded only
after he completed his tax return.
The testimony of both Duy and Thinh, though not as explicit
as is Dung's testimony, is equally obscure. In any event, no
records were produced. Further, all testimonial evidence is
tenuous in respect to the relevant points.
Petitioners correctly explain that in Eller v. Commissioner,
77 T.C. 934 (1981), this Court held that compensation is
deductible under section 162(a)(1) only if it is: (1) Reasonable
in amount; (2) provided for services actually rendered; and (3)
paid or incurred. But the burden is on petitioners to prove that
they are entitled to the deduction claimed. Rule 142(a); Welch
v. Helvering, supra. Even if we were convinced that petitioners
paid reasonable amounts to their sons for their involvement in
the enterprise, we remain unpersuaded as to the amount of
compensation paid.
Petitioners contend that the Cohan rule, Cohan v.
Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930), should be used
to bridge this gap. We disagree. According to the Cohan rule,
if the record provides sufficient evidence that the taxpayer has
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