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of a claimed business expense. Cohan v. Commissioner, supra.
The rule also allows the Court to bear heavily against the
taxpayer whose inexactitude is of his or her own making. At
trial, petitioners failed to provide any corroborating evidence,
besides their self-serving testimony, that payments were made.
The Court has discretion to disregard testimony which we find
self-serving. Niedringhaus v. Commissioner, 99 T.C. 202, 212
(1992). Petitioners could not recollect the number of jobs
completed in a particular year, the person or persons hired for a
particular job, or how the amount claimed as a deduction or cost
of goods sold was calculated. Petitioners did not call as
witnesses any of the purported subcontractors or workers who
rendered services for petitioners during the years in issue.
Under Vanicek v. Commissioner, supra, any estimation of business
expenses incurred by a taxpayer must be based on a reasonable
evidentiary basis. Petitioners failed to establish any
reasonable evidentiary basis.
Based upon the above, we find that petitioners failed to
substantiate, and therefore are not entitled, to Schedule C
deductions for labor expenses during the years in issue.
Respondent determined additions to tax as a result of
petitioners’ failure to timely file their respective tax returns
for tax years 1988 to 1992. Section 6651(a)(1) imposes an
addition to tax for failure to timely file a tax return. The
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