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Section 162(a) allows a deduction for the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on a trade or business. Whether an expenditure is
ordinary and necessary is a question of fact. Commissioner v.
Heininger, 320 U.S. 467, 475 (1943).
Section 274(d)(4) imposes stringent substantiation
requirements for the deduction of certain listed property as
defined under section 280F(d)(4), which includes a passenger
automobile. However, section 280F(d)(5)(B) provides that the
term "passenger automobile" does not include any vehicle used by
the taxpayer directly in the trade or business of transporting
persons or property for compensation or hire. Salami v.
Commissioner, T.C. Memo. 1997-347. Because petitioners' claimed
deductions are for petitioner's use of his Mercury Grand Marquis
as a limousine for hire, section 274(d)(4) is not applicable.
Nevertheless, a taxpayer must keep sufficient records to
establish the amount of the deductions. Meneguzzo v.
Commissioner, 43 T.C. 824, 831 (1965). When a taxpayer fails to
keep records but the Court is convinced that deductible
expenditures were incurred, the Court "should make as close an
approximation as it can, bearing heavily if it chooses upon the
taxpayer whose inexactitude is of his own making." Cohan v.
Commissioner, 39 F.2d 540, 544 (2d Cir. 1930). We cannot
estimate deductible expenses, however, unless the taxpayer
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