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“Trk Rental”, “Equip. Pmts.”, “Legal”, “Lee Gale Livg Trst”,
“W2P”, “Ofc Rent & Acctg”, “Enttnmnt”, and “Pers”. The 1992
disbursements journal did not provide clear totals for each
category of expense, did not show which expenses made up the
$128,275 additional expense figure, and did not indicate which
expenses had already been reported on Schedule C or E of the 1992
individual return.
As a general rule, the taxpayer has the burden of proving
entitlement to deductions. United States v. Zolla, 724 F.2d at
809-810. The taxpayer must maintain records sufficient to prove
his entitlement to any deductions. Sec. 6001; sec. 1.6001-1(a),
Income Tax Regs.
In the cases at hand, petitioner has not substantiated his
entitlement to business expense deductions for any portion of the
remaining $93,275 which he claimed as a cost of goods sold in
1992. Thus, petitioner was required to substantiate the
disallowed balance of $93,275, which he has attempted to do by
referring us to his 1992 disbursements journal.
We told petitioner at trial that he must provide additional
evidence to support his trade or business expense deductions and
held the record open to give him an opportunity to do this.
Without such evidence, we have no assurance that deductions
already reported in other areas of petitioner’s 1992 individual
return (e.g., Schedule C other expenses of $25,939 and Schedule E
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