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amounts were deducted from petitioner’s gross wages for the VAF.
On the other hand, as of April 30, 1994, $866 had been deducted
from petitioner’s gross income for the escrow balance.
Therefore, petitioners are entitled to a deduction of $866.
Petitioners claimed a deduction for fuel of $804.
Petitioner testified that he had to purchase fuel for the trucks
out of his own pocket. Ortega did not have a fuel pump on its
premises; therefore the drivers had to obtain fuel offsite.
Petitioners did not provide any documentation to support this
claimed expense deduction. However, petitioner was a credible
witness, and we find that this was an ordinary and necessary
expense which petitioner incurred. Therefore, petitioners are
entitled to a deduction for fuel in the amount of $500. Cohan v.
Commissioner, supra.7
The deduction for unpaid dispatch is the difference between
the dispatch total the company earned and the driver’s total
earnings. This amount was never included in petitioner’s gross
income, was not paid by petitioner, and is therefore not
deductible.
7 Typically, expenses for fuel, if purchased in connection
with listed property under sec. 280F(d)(4)(A)(i) and (ii), must
meet the strict substantiation requirements of sec. 274(d) and
Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930), cannot be
applied. However, that rule does not apply for “any property
substantially all of the use of which is in a trade or business
of providing to unrelated persons services consisting of the
transportation of persons or property for compensation or hire.”
Sec. 280F(d)(4)(C).
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