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half of the figure claimed. Since the receipts and invoices
which supposedly substantiate petitioners’ “Other costs” total
only $5,476, we conclude that they have failed to prove their
entitlement to cost of goods sold in excess of what already
appears to be a generous allowance by respondent.
B. Wages Expense
On their Schedule C, petitioners designated $50,925 as cost
of labor and $6,721 as wages expense. These amounts add to a
total of $57,646 for compensation-related expenditures. During
examination, petitioners provided payroll invoices and receipts
for 1996 totaling $55,805.33. Respondent allowed as a deduction
wages expense of $78,100. Again, respondent would appear to have
been generous. Furthermore, to the extent that certain portions
of Mr. Mendez’s testimony and the written statement offered by
petitioners at trial can be interpreted to mean that additional
cash payments were made to employees, such representations are
insufficient to support a further deduction.
First, the record is entirely devoid of anything which could
corroborate the self-serving averments that cash payments were in
fact made during the year at issue. Second, even if we were
willing to accept that cash had been remitted, the record
provides no basis for a reasonable estimate of the deductible
amount. The oral testimony contains no numerical information
whatsoever, as to either the number or the amount of payments,
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