-12-
basis that petitioner failed to provide substantiation for these
expenses. A substantial portion of the claimed expenses was for
foreign country calls that pertained to the startup of petitioner's
export business. However, a portion of the telephone expenses was
in connection with petitioner's insurance business.
Under certain circumstances, if claimed deductions are not
adequately substantiated, we may estimate them, provided we are
convinced that the taxpayer has incurred such expenses and we have
a basis upon which to make an estimate. Cohan v. Commissioner, 39
F.2d 540 (2d Cir. 1930); Vanicek v. Commissioner, 85 T.C. 731, 743
(1985). Based on the record presented, using our best estimate, and
giving consideration to section 262(b),4 we find, and thus hold,
that petitioners are entitled to a deduction for telephone expenses
in the amount of $1,500 for 1992. See, e.g., Velinsky v.
Commissioner, T.C. Memo. 1996-180.
E. Commissions Expenses
4 SEC. 262. PERSONAL, LIVING, AND FAMILY EXPENSES.
(a) General Rule.--Except as otherwise
expressly provided in this chapter, no
deduction shall be allowed for personal,
living, or family expenses.
(b) Treatment of Certain Phone
Expenses.--For purposes of subsection (a), in
the case of an individual, any charge
(including taxes thereon) for basic local
telephone service with respect to the 1st
telephone line provided to any residence of
the taxpayer shall be treated as a personal
expense.
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