-13- or she is otherwise entitled, the Court may estimate the amount of such expense and allow the deduction to that extent. Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930). In making such an estimate, however, the Court may bear heavily against the taxpayer, whose inexactitude is of his or her own making. Id. Petitioners claim that in 1993 Mr. Hughes provided petitioner with a business proposal that petitioner used to obtain the Port lease. Petitioners also claim that Mr. Hughes provided them with various accounting and certification services. In return for these services, petitioners claim that they paid Mr. Hughes $1,300 in cash. At trial, petitioners were unable to recall when they paid Mr. Hughes or whether they paid him in installments. Moreover, petitioners introduced no copy of any invoice(s) from Mr. Hughes for the services that he performed in 1993. Petitioners testified that they had "a fire in our home in the last 2 or 3 years that did a substantial amount of damage in our basement, so some of the stuff got lost."4 Mr. Hughes appeared at trial and corroborated petitioners' testimony. However, Mr. Hughes was unable to produce any records detailing the services that he provided. Mr. Hughes testified 4 Petitioners did not present any evidence, such as an insurance claim or a fire department report, to substantiate this allegation.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011