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The allowances described above were based upon invoices and
receipts provided to respondent prior to trial and made a part of
the record in this case. At trial, Mr. Mendez spoke on behalf of
his parents (who apparently have minimal command of English). He
testified that EJX’s business deteriorated shortly after the year
at issue and closed in the fall of 1997. He also indicated that
no business records were retained and conceded that petitioners
could offer no further substantiation for their claimed costs and
expenses. In addition, he explained that efforts to locate the
bookkeeper who had prepared EJX’s business records as well as
petitioners’ 1996 return had been unavailing. In this
connection, the colloquy set forth below exemplifies Mr. Mendez’s
testimony on these matters:
THE COURT: Now, why don’t you tell the Court
anything you want to state in regard to your family’s
tax problems.
THE WITNESS: Yeah. The only thing I can say is
that we had--we were in this business quite a long time
and we were doing good, since my dad went to--you know,
like he got sick and almost everything of the business,
it went down like, you know, no--there were no--there
were my father not working. So the business, it was
not good.
So what I can tell is that I wish I can have all
the proofs we used to--we had for all the other years,
which is--you know, we used to do good things. You
know, keep the files, but since we decide not to work
with it anymore.
So we just--actually my dad--we don’t have no
proofs. We just we cannot come with that proof.
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