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carrying on a trade or business. An "ordinary" expense is one
that relates to a transaction of "common or frequent occurrence
in the type of business involved", Deputy v. du Pont, 308 U.S.
488, 495 (1940), and a "necessary" expense is one that is
"appropriate and helpful for the development of the petitioner's
business", Welch v. Helvering, 290 U.S. 111, 113 (1933). Whether
an expenditure is ordinary and necessary is a question of fact.
See Commissioner v. Heininger, 320 U.S. 467, 475 (1943).
We are convinced that petitioner carried on an engineering
business under the business name of ADE during the taxable years
in issue. We are left to decide whether petitioners have
substantiated what petitioner claims to have paid for ordinary
and necessary trade or business expenses during 1993 and 1994 in
excess of the amounts allowed and conceded by respondent.
Taxpayers must generally keep sufficient records to
establish the amounts of claimed deductions. See sec. 6001;
Meneguzzo v. Commissioner, 43 T.C. 824, 831-832 (1965). To be
entitled to a deduction under section 162(a), a taxpayer is
required to substantiate his expenses through the maintenance of
books and records. With certain exceptions, in the event that a
taxpayer establishes that a deductible expense has been paid but
is unable to substantiate the precise amount, we may estimate the
amount of the deductible expense, bearing heavily against the
taxpayer whose inexactitude in substantiating the amounts of the
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