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however, he did not have enough money to pay for the attorney’s
services.
Respondent disallowed all of the expenses listed on the
Schedules C for 1993, 1994 and 1995 except for the following:
(1) Car and truck expenses of $2,025 for 1995; (2) insurance
expenses of $4,125 (the full amount claimed) for 1994; (3) legal
expenses of $100 for 1993, 1994, and 1995; (4) office expenses of
$378 (the full amount claimed) in 1994; (5) supplies expenses of
$23,918 (the full amount claimed) for 1994 and $18,018 for 1995;
(6) utilities expenses of $998 (the full amount claimed) for
1994; and (7) all the taxes and licensing expenses claimed by Mr.
Furnish for 1993, 1994, and 1995. Additionally, although Mr.
Furnish deducted only $148,900 for labor expenses in 1994,
respondent disallowed $181,055 of labor expenses.
OPINION
As we observed in Diaz v. Commissioner, 58 T.C. 560, 564
(1972):
This case epitomizes the ultimate task of a trier of
the facts--the distillation of truth from falsehood
which is the daily grist of judicial life. He must be
careful to avoid making the courtroom a haven for the
skillful liar or a quagmire in which the honest
litigant is swallowed up. Truth itself is never in
doubt, but it often has an elusive quality which makes
the search for it fraught with difficulty. That this
is so is clearly illustrated by the situation herein.
* * *
I. Business Expense Deductions
The main issue to be decided in the instant case is whether
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