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paid or incurred during the taxable year in carrying on a trade
or business. A self-employed individual may deduct the cost of
operating a passenger automobile to the extent that it is used in
a trade or business. Rev. Proc. 89-66, supra, states that
although section 274(d) provides that no deduction shall be
allowed under section 162 with respect to any listed property
(which includes a passenger automobile) unless the taxpayer
complies with the substantiation requirement of that section, the
section also provides that regulations may prescribe that some or
all of the substantiation requirements do not apply to an expense
that does not exceed an amount prescribed by such regulations.
The Revenue Procedure then states that section 1.274-5T(g),
Temporary Income Tax Regs., 50 Fed. Reg. 46014, 46030 (Nov. 6,
1985), in part, grants the Commissioner the authority to
prescribe rules under which such allowances, if in accordance
with reasonable business practices, will be regarded as
substantiation in accordance with section 274(d).
Petitioner offered as evidence numerous repair billings for
the 1984 Ford Thunderbird driven by Mr. Velinsky. Petitioner
deducted $9,569 on Schedule C for car and truck expenses and
$1,293 for depreciation. On the Form 4562 attached to
petitioner's return, petitioner indicated that the automobile was
used 96 percent for business purposes. To substantiate the
gasoline, lube and oil expenses of $1,560, petitioner offered as
evidence copies of her husband's credit card statements for the
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