- 25 -
relationship between the claimed expense and the business. See
Walliser v. Commissioner, 72 T.C. 433, 437 (1979).
Where a taxpayer has established that he has incurred a trade
or business expense, failure to prove the exact amount of the
otherwise deductible item may not always be fatal. Generally,
unless prevented by section 274, we may estimate the amount of
such an expense and allow the deduction to that extent. See
Finley v. Commissioner, 255 F.2d 128, 133 (10th Cir. 1958), affg.
27 T.C. 413 (1956); Cohan v. Commissioner, 39 F.2d 540, 543-544
(2d Cir. 1930). In order for the Court to estimate the amount of
an expense, however, we must have some basis upon which an
estimate may be made. See Vanicek v. Commissioner, 85 T.C. 731,
742-743 (1985). Without such a basis, an allowance would amount
to unguided largesse. See Williams v. Commissioner, 245 F.2d 559,
560 (5th Cir. 1957).
Petitioner provided at trial copies of miscellaneous checks,
receipts, and invoices as substantiation for Schedule C expenses
for office expense, repairs and maintenance, and supplies for
1993. Respondent concedes that petitioner has shown his
expenditure in 1993 of $140 for professional licenses. In his
testimony, petitioner pointed out copies of checks and receipts
substantiating the expenditure of $1,106 for repair and
maintenance of a business computer in 1993.
Page: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 NextLast modified: May 25, 2011