-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.
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Last modified: May 25, 2011