Gary Wilson - Page 15




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               The regulations provide a limited exception to the                     
          substantiation requirements of section 274(d).  Under section               
          1.274-5(c)(5), Income Tax Regs.:                                            
               Where the taxpayer establishes that the failure to                     
               produce adequate records 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 a deduction by reasonable                      
               reconstruction of his expenditures.                                    
          Petitioner testified that he kept records of his flights between            
          California and Idaho, but that those records have been lost.                
          Petitioner did not present any evidence as to how the loss of the           
          records occurred, or that the loss was due to “circumstances                
          beyond * * * [his] control”.  The limited exception does not                
          apply to the loss of petitioner’s records.                                  
          2. Miscellaneous Business Expense Deductions                                
               Petitioner also claimed miscellaneous business deductions of           
          $5,290 and $4,988 on his 1992 and 1993 returns, respectively.               
          According to petitioner’s testimony, the business expenditures              
          were for union dues, tools, work clothing, and boots.  Respondent           
          denied the miscellaneous business deductions on the grounds that            
          petitioner failed to establish that he incurred the expenses                
          claimed as deductions, and that he failed to maintain adequate              
          records to establish the specific amounts of the deductions as              
          required by section 6001.                                                   








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Last modified: May 25, 2011