Sony and Gwendolyn A. Jean Baptiste - Page 8




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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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