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exception to the Cohan rule and prohibits the estimation of these
expenses. Sanford v. Commissioner, 50 T.C. 823, 827-828 (1968),
affd. per curiam 412 F.2d 201 (2d Cir. 1969); sec. 1.274-5T(a),
Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985).
The loss of tax records does not leave a taxpayer helpless
in meeting his substantiation burden. In general, when a
taxpayer's records have been lost or destroyed through
circumstances beyond his control, he is entitled to substantiate
the deductions by reconstructing his expenditures through other
credible evidence. Malinowski v. Commissioner, 71 T.C. 1120,
1125 (1979); Cook v. Commissioner, T.C. Memo. 1991-590.
Before we discuss each item of expenditure, we must briefly
comment on the history of this litigation. Subsequent to the
filing of the petition on April 25, 1996, this case was first
calendared for trial in Los Angeles, California, on March 10,
1997. On that date, petitioner husband appeared and requested a
continuance on the grounds that he was trying to obtain
“additional” records from the attorney who had been handling
petitioners’ litigation against the seller of JDB. The case was
continued and recalendared for trial for June 2, 1997. On May
28, 1997, petitioners moved for a continuance on the grounds that
they had served a subpoena on Wells Fargo Bank, the successor to
their bank, First Interstate, and that there would be a delay in
the bank’s compliance therewith. Petitioners’ motion was
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