- 25 -
deductions. In the petition, petitioners aver no facts
concerning such deductions, and, on brief, they have proposed no
fact, and made no argument, with respect to such deductions. At
best, we know that Rita Snyder prepared tax returns and may have
provided other business services. James Snyder testified that he
was in the “general computer business”, buying and selling
computers and doing service work and installations. While we
assume that James Snyder incurred costs in buying computers for
resale, we have no basis other than the self-serving figures on
the Complete Connections tax returns for estimating such costs.
We need not accept those figures. A taxpayer must keep
sufficient records to substantiate amounts, such as the cost of
goods sold, required to be shown on a return. See sec. 1.6001-
1(a), Income Tax Regs; e.g., Newman v. Commissioner, T.C. Memo.
2000-345. We likewise have no basis for estimating any business
expenses deductible under section 162(a), or any other section.
Indeed, we have found that petitioners paid personal expenses
from the J&R checking account. Without specific authority, no
deduction is allowed for personal, living, or family expenses.
Sec. 262(a). While it is within the purview of this Court to
estimate the amount of allowable deductions where there is
evidence that deductible expenses were incurred, Cohan v.
Commissioner, 39 F.2d 540 (2d Cir. 1930), we must have some basis
on which an estimate may be made. Vanicek v. Commissioner,
85 T.C. 731, 742-743 (1985); see also Norgaard v. Commissioner,
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