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failed to produce documents and provide answers to
interrogatories to explain why he reported less interest and
dividends for 1986 and 1987 than the amounts shown on the Forms
1099 issued by his payers, or to support his claim to deductions
in excess of the amounts allowed by respondent on audit. By
order of this Court, he was accordingly denied the opportunity to
present any such evidence at trial. Where it is clear from the
record that deductible expenses were incurred, but the taxpayer
cannot prove the exact amount thereof, under some circumstances
the Court may estimate. Cohan v. Commissioner, 39 F.2d 540, 544
(2d Cir. 1930). The so-called Cohan rule has no application,
however, where, as here, the record lacks any basis for
estimation. Williams v. United States, 245 F.2d 559, 560-561
(5th Cir. 1957); Vanicek v. Commissioner, 85 T.C. 731, 742-743
(1985). Respondent's determinations are therefore sustained.
Additions
Section 6651(a)(1) imposes an addition to tax for failure to
file a timely return, unless it is shown that the failure was due
to reasonable cause and not to willful neglect. The addition to
tax is calculated as a percentage of the amount of tax required
to be shown on the return, reduced by any part of this tax
liability that was paid within the prescribed time period. Sec.
6651(b). Petitioner filed his return for 1986 3 years late. The
Form 1040 he filed for 1987 was not signed under penalty of
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