- 13 -
For the Court to make such estimation "there [must] be sufficient
evidence to satisfy the trier that at least the amount allowed in
the estimate was in fact * * * incurred, for the stated purpose".
Williams v. United States, 245 F.2d 559, 560 (5th Cir. 1957);
Vanicek v. Commissioner, 85 T.C. at 742-743.
Petitioner produced only a few isolated receipts to
substantiate her remaining deductions and called no witnesses to
support her claim to those deductions. Petitioner herself did
not testify with regard to those expenses. Accordingly, there is
no reasonable basis for the Court to estimate the amount of
expenses incurred. Vanicek v. Commissioner, supra at 742-743.
Consequently, we deny those additional deductions.
Unreported Income
In determining the amount of the deficiencies for 1993 and
1994, respondent reconstructed petitioner's income using the
source and application of funds method, or cash method.4
If a taxpayer's books and records are inadequate for the
purpose of ascertaining the taxpayer's income, the Commissioner
is authorized to reconstruct the taxpayer's income by whatever
method will clearly reflect income. Sec. 446; Petzoldt v.
Commissioner, 92 T.C. 661, 686-687 (1989). The cash method is
designed to reconstruct the income of a taxpayer who consumes his
income during the year and does not invest it. Id. at 694. It
4 This method has been referred to by both names. See
DeVenney v. Commissioner, 85 T.C. 927, 930 (1985).
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