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j. Travel, Meal, and Entertainment Expenses
Petitioners claimed travel, meal, and entertainment expense
deductions in the amount of $6, subject to a 50 percent
limitation on Schedule C of their 1994 Federal income tax return.
Petitioners have not substantiated or explained this expense
deduction and have not shown that this expense was incurred in
carrying on a trade or business as required by section 162.
We find that petitioners have not complied with the
requirements of section 162 and hold that petitioners are not
entitled to claim meals and entertainment expense deductions for
the 1994 tax year.
2. Petitioners' 1995 Income
As previously found, petitioners failed to file a Federal
income tax return for the 1995 tax year. Using BLS data,
respondent determined that petitioners each earned income of
$19,775, as well as community interest income of $55 for the 1995
tax year.
At trial, petitioner admitted that for 1995 the restaurant
generated gross income in the amount of $83,083.90. Based on
petitioner's admission, we find that the $83,083.90 amount is a
more accurate measure of gross income than respondent's use of
BLS data, and, therefore, we find that petitioners earned total
gross income in the amount of $83,083.90 from the restaurant for
the 1995 tax year.
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