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In 1991, petitioner paid medical expenses relating to his
daughters, to employees of his warehouse, and to his own medical
needs.
Petitioner often traveled in his automobile to meet with
customers and prospective customers. Petitioner provided
refreshments for customers at his warehouse, and occasionally
petitioner purchased lunch for employees, for customers, and for
himself during meetings at restaurants.
On his 1990 and 1991 Federal income tax returns, petitioner
claimed deductions for alleged expenses relating to his scrap
metal recycling business. The deductions claimed include alleged
miscellaneous expenses relating to petitioner's home office, rent
and utilities relating to petitioner's home office and to the
warehouse, employee wages, fines and losses from burglaries,
legal fees, employee benefits, medical expenses, travel expenses,
and meal and entertainment expenses.
Allegedly due to a loss of many of petitioner’s books and
records during the bankruptcy proceeding, the only records
relating to petitioner's scrap metal recycling business that
petitioner produced to respondent’s revenue agent during the
audit and at trial were: (1) Copies of the computer spreadsheets
reflecting alleged daily and monthly expenses by category for all
of 1990 and 1991 except for one month of 1990; and (2) some of
the daily cash reports and receipts for 1990 and 1991.
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