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entitled to a deduction for any of the claimed Schedule C expenses
for 1989 or 1990, except to the extent allowed in the statutory
notice of deficiency.
Miscellaneous Itemized Deductions
For 1990, petitioners claimed $7,176 of miscellaneous itemized
deductions. Petitioners provided no documentary evidence to
support their conclusory testimony that they incurred these
deductions. Although sworn testimony may suffice as proof, when it
is so general and conclusory in character (as it was here), it will
not be sufficient to satisfy petitioners' burden of proof. See
Hearn v. Commissioner, 36 T.C. 672, 673-674 (1961), affd. 309 F.2d
431 (9th Cir. 1962).
In addition, since the majority of these expenses are for
travel and entertainment, they are subject to the special
substantiation provisions of section 274(d), and hence normally can
not be substantiated by testimony alone. Consequently, we sustain
respondent's disallowance of petitioner's claimed deduction in 1990
for miscellaneous itemized deductions.
Accuracy-Related Penalty
Finally, we must decide whether petitioners are liable for the
accuracy-related penalty under section 6662(a) for 1989 and 1990.
Section 6662 imposes a penalty equal to 20 percent of the portion
of the underpayment that is attributable to negligence or disregard
of rules or regulations. Sec. 6662(a) and (b)(1).
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