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ETCO did not provide sufficient substantiation to refute
respondent's determination of the automobile expenses as required
under section 274(d)(4). Although ETCO offered a mileage log,
which showed destinations, dates, and miles driven, ETCO did not
offer records to substantiate which of the two automobiles had
been driven on each date, the total odometer mileage for each
automobile, return dates, or the business purpose of each trip
they took in each of the automobiles. Added to the lack of
substantiation to determine accurately the business-use
percentage are the facts that the Lincoln was not designated as a
business-use automobile on the lease agreement and was designated
as a personal-use vehicle on the insurance contract. We find
that ETCO has not carried its burden to show that deductions in
excess of that determined in respondent's notice of deficiency
should be allowed.4
Respondent further argues that the amounts of the automobile
lease payments and the automobile insurance payments, paid by
ETCO and attributed to Mr. and Mrs. Thorpe's personal use, were
constructive dividends from ETCO to Mr. and Mrs. Thorpe.
Generally, section 61 provides that gross income includes income
from whatever source derived, including fringe benefits, gross
4In the notice of deficiency sent to ETCO, respondent also
determined that ETCO's income must be increased by $713 in fiscal
year 1990 due to the auto lease inclusion requirements. See sec.
280F. Petitioners do not contest this amount, either at trial or
on their briefs. Therefore, respondent's determination with
respect to this amount is sustained.
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