- 10 - Petitioners assert that the Code does not detail specifically the records that must be kept by a sole proprietor like Mr. Harris and that section 469 was not meant to apply to a small business like Harris Enterprises. We agree with respondent that petitioners may not deduct the disputed amounts. First, we are unpersuaded that petitioners incurred or paid the amounts claimed for advertising, gravel parking lot, and water well replacement, or that petitioners had a depreciable basis in the buildings for which depreciation was claimed. The regulations mandate that taxpayers "shall keep such permanent books of account or records * * * as are sufficient to establish the amount of gross income, deductions, credits, or other matters required to be shown by such person in any return of such tax". Sec. 1.6001-1(a), Income Tax Regs. Petitioners did not comply with this mandate. They did not submit any credible record to support their claim to any of the disputed deductions. Nor did they submit canceled checks or bona fide receipts. Although Mr. Harris testified vaguely as to these expenditures, we decline to rely on this self-serving and uncorroborated testimony. Ruark v. Commissioner, 449 F.2d 311, 312 (9th Cir. 1971), affg. per curiam T.C. Memo. 1969-48; Clark v. Commissioner, 266 F.2d 698, 708-709 (9th Cir. 1959), affg. in part and remanding T.C. Memo. 1957-129; Tokarski v. Commissioner, 87 T.C. 74, 77 (1986). We hold that petitioners have failed toPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
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