- 5 -
1930). However, the estimate must have some reasonable
evidentiary basis. Vanicek v. Commissioner, 85 T.C. 731, 743
(1985). The estimate must show that at least the estimated
amount was actually spent or incurred for the stated purpose.
Williams v. United States, 245 F.2d 559 (5th Cir. 1957).
However, in making an estimate, the Court may bear heavily on the
taxpayer whose inexactitude is of his own making. Cohan v.
Commissioner, supra.
Section 162(a) provides in relevant part that "There shall
be allowed as a deduction all the ordinary and necessary expenses
paid or incurred during the taxable year in carrying on any trade
or business". The regulations promulgated thereunder state that
only those ordinary and necessary business expenses "directly
connected with or pertaining to the taxpayer's trade or business"
may be deducted. Sec. 1.162-1(a), Income Tax Regs.
Whether an expense is "ordinary and necessary" is generally
a question of fact. Commissioner v. Heininger, 320 U.S. 467, 475
(1943). To be "necessary" within the meaning of section 162, an
expense need only be appropriate and helpful to the taxpayer's
business. Welch v. Helvering, supra at 113. To be an "ordinary"
expense, "the transaction which gives rise to it must be of
common or frequent occurrence in the type of business involved".
Deputy v. du Pont, supra at 495 (citing Welch v. Helvering, supra
at 114).
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