Kin L. Velinsky - Page 14

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          amounts disallowed by respondent were disallowed for lack of                
          substantiation.  As we stated in that case, "because petitioner             
          was unable to substantiate her husband's claimed deductions does            
          not mean the deductions had no basis in fact or law."  Douglas v.           
          Commissioner, supra at 763.  We hold that petitioner is not                 
          entitled to innocent spouse relief with respect to the disallowed           
          deductions.                                                                 
               Petitioner next contends that some of the deductions for Mr.           
          Velinsky's band management business are proper and were properly            
          substantiated.  Respondent's position is that petitioner has not            
          produced sufficient evidence to substantiate the claimed                    
          deductions in amounts in excess of those allowed by respondent or           
          conceded by respondent at trial.                                            
               The parties have stipulated into the record copies of                  
          documents kept by Mr. Velinsky.  However, since Mr. Velinsky was            
          deceased at the time of the trial of this case, we do not have              
          his testimony as to the validity of the deductions.  Petitioner             
          and Mr. Velinsky's return preparer, Mr. Paquette, testified with            
          respect to the claimed deductions.                                          
               Rev. Proc. 89-66, 1989-2 C.B. 792,4 provides optional                  
          mileage rates for employers and self-employed individuals.                  
          Section 162 allows as a deduction ordinary and necessary expenses           


          4  Since petitioner is allowed a greater deduction using the                
          standard mileage rate deduction, petitioner is not allowed a                
          depreciation deduction.  See Rev. Proc. 74-23, 1974-2 C.B. 476.             




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