- 50 - “coyotes” who transported the laborers from Mexico, and unsubstantiated trucking expenses, they are undermined by evidence that payments to “coyotes” and trucking expenses for which no receipts were obtained were recouped by deductions from wages paid to the employees. Finally, the amounts claimed are simply not credible. Petitioners seek to increase the deductions for labor costs by nearly doubling them for 1985 (adding $346,172 to $356,607.96 claimed on the original return) and adding an additional two-thirds of the amount claimed for 1986 (adding $325,229 to $482,581.18 claimed on the return). We are not persuaded that they had that much cash available, after diverting cash to their loan business and other personal uses, unless they had substantial amounts of unreported cash income as well. Nonetheless, in view of the nature of petitioners’ business during the years in issue and their use of imported labor and payments of those laborers in cash, it is likely that some expenses that would be deductible were paid in cash. Under these circumstances, we must weigh heavily against petitioners, whose inexactitude is of their own making. We also bear in mind that petitioners had some cash sales in undetermined amounts during the years in issue that were not included in respondent’s computation of unreported income. Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930). However, the Court must have some basis on which an estimate may be made. Williams v. United States, 245Page: Previous 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 Next
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