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Insurance $ 600
Rent or lease of vehicles 15,333
Taxes and licenses 120
Total $16,053
Respondent disallowed the expenses on the ground that the
expenses related to travel and transportation, and petitioners
had failed to establish that the expenses were (a) incurred
during the taxable year, and (b) were ordinary and necessary
business expenses.
The determinations of the Commissioner in a notice of
deficiency are presumed correct, and the taxpayer bears the
burden of proving that the determinations are incorrect. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
The $15,333 item that petitioner claimed as an expense for
the rent or lease of vehicles represented the cost of a Mercury
Sable automobile petitioner purchased for cash on July 3, 1992.
That automobile was used exclusively in petitioner's Schedule C
activity by himself and his clients.4 Petitioners presented no
documentary information to substantiate the $600 claimed for
insurance and the $120 claimed for taxes and licenses.
4
Petitioner paid for the automobile by issuance of a check in
the amount of $15,313 payable to the dealer. No explanation was
advanced to account for the $20 difference between the amount of
the check, $15,313, and the amount claimed as an expense on
Schedule C, $15,333.
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