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other than his own testimony that he "feels" that he drove
approximately 20,000 miles a year for business purposes.
Section 274(d) provides that no deduction shall be allowed
with respect to any listed property (as defined in section
280F(d)(4)) unless the taxpayer substantiates by adequate records
or sufficient evidence corroborating the taxpayer's own statement
the amount of such expense, the time and place of the expense, the
business purpose of the expense, and the business relationship of
the expense. A passenger automobile is considered listed property.
Sec. 280F(d)(4).
Because petitioner failed to satisfy the record keeping or
other substantiation requirements of section 274(d), petitioners
are not entitled to the claimed employee business deductions for
automobile expenses for 1989, 1990, and 1991.
Issue 3. Statute of Limitations Defense
The next issue for consideration is whether respondent is
time-barred from amending her answer to increase the amount of the
deficiency for 1988 by recharacterizing the advances petitioner
received in 1988 as wages.
For 1988, petitioners reported a total gross income of
$82,034, consisting of wages ($77,388), interest ($3,318), and
unemployment compensation ($1,328). In addition, they reported the
sale of their home, but excluded the gain therefrom pursuant to
section 1034. The reported selling price for the home was $180,000;
the excluded gain was $14,050.
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