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We first examine the disallowed Schedule C deductions in
issue. On their 1991 return, petitioners claimed Schedule C
expenses related to Mr. Brown's tree stumping business in the
amount of $194,059. After concessions,3 respondent disallowed
$84,021 of those business expenses on the grounds that
petitioners failed to substantiate that the amounts were paid and
were for business purposes. At trial, petitioners testified that
they incurred certain expenses, as discussed infra. We are
satisfied by the testimony of petitioners that, in carrying out
his tree stumping business, Mr. Brown incurred expenses beyond
those allowed by respondent in the notice of deficiency. Because
petitioners have not established the precise amount of the
deductions, however, we shall make a reasonable approximation of
the amounts allowable, "bearing heavily" upon petitioners as
permitted by Cohan v. Commissioner, supra at 543.
Petitioners claimed interest expenses in the amount of
$9,390, which respondent allowed to the extent of $1,392.
Accordingly, the amount remaining in issue is $7,998. At trial,
petitioners provided neither documentary evidence nor testimony
to substantiate the additional $7,998 in interest expenses that
they claimed. Moreover, they failed to offer any reconstruction
of the amounts through third party records. Consequently, as
there is no rational basis to approximate those expenses, we
3 See supra note 1.
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