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When an employee has a right to reimbursement for
expenditures related to her status as an employee, but fails to
claim such reimbursement, the employee's expenses are not
deductible because such expenditures are not "necessary"; i.e.,
it is not necessary for an employee to remain unreimbursed for
expenses to the extent he or she could have been reimbursed.
Orvis v. Commissioner, 788 F.2d 1406 (9th Cir. 1986), affg. T.C.
Memo. 1984-533; Lucas v. Commissioner, 79 T.C. 1, 7 (1982).
Generally, when evidence shows that a taxpayer incurred a
deductible expense, but the exact amount cannot be determined,
the Court may approximate the amount. Cohan v. Commissioner, 39
F.2d 540, 543-544 (2d Cir. 1930). The Court, however, must have
some basis upon which an estimate can be made. Vanicek v.
Commissioner, 85 T.C. 731, 742-743 (1985). Section 274(d)
provides that no deduction under section 162 or 212 for travel
and meals and entertainment is allowed unless the taxpayer
substantiates by adequate records or by sufficient evidence
(A) the amount of the expense, (B) the time and place of the
travel or entertainment, (C) the business purpose of the expense,
and (D) the business relationship to the taxpayer of persons
entertained. The Cohan doctrine does not apply to such expenses.
Petitioner claimed employee expenses on Schedule A of her
1993 and 1994 Federal income tax returns in the total amounts of
$27,111 and $13,186, respectively.
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