6
is due to the loss of such records through circumstances beyond
the taxpayer's control, such as destruction by fire, flood,
earthquake, or other casualty, the taxpayer shall have a right to
substantiate such a deduction by reasonable reconstruction of her
expenditures or use. See sec. 1.274-5T(c)(5), Temporary Income
Tax Regs., 50 Fed. Reg. 46022 (Nov. 6, 1985).
Petitioner was unable to remember many details regarding her
claimed deductions. Although both petitioner and her witnesses
testified that petitioner had once possessed receipts
substantiating her 1994 Schedule C deductions, neither
petitioner, her accountant, nor her attorney attempted to
reconstruct petitioner's claimed expenditures by contacting
businesses or financial institutions with which petitioner
conducted business in 1994.
On the basis of the record, we find that petitioner did not
substantiate her claimed Schedule C expenses. Therefore, we hold
that petitioner is not entitled to claim Schedule C deductions
for the 1994 tax year. Respondent is sustained on this issue.
In any event, the expenses incurred would not be allowable
on Schedule C because petitioner was not in business for herself,
as explained hereafter.
In considering whether petitioner was an independent
contractor or an employee, we apply common-law rules. Courts
consider various factors to determine whether an employment
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