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Petitioners are not entitled to estimate deductible car and
truck expenses without the substantiation of time, place, and
business purpose required by section 274(d). See also section
280F(d)(4) with respect to expenses relating to passenger
automobiles. Despite the volume of paper presented by
petitioners, they have failed to satisfy the strict
substantiation requirements of the applicable law. Even if we
could accept Mr. Jacobsen’s generalized testimony and assertions
that all of the mileage related to attempts to secure business
and to make contacts, the amount is unreasonable in view of his
testimony about the severity of Mrs. Jacobsen’s illness during
1997. On this record, no deduction for car and truck expenses or
meals and entertainment expenses may be allowed.
Legal Expenses
Respondent contends that there is no evidence substantiating
petitioners’ claim that they incurred legal expenses during 1997
that were deductible as business expenses. Again, petitioners
presented fragmentary documents that showed that certain payments
were made. Neither the documents nor Mr. Jacobsen’s testimony
adequately or persuasively explained how the expenses related to
his business. His testimony about the various matters discussed
with regard to the services provided by the lawyer to whom
payment was made suggests items that are not currently
deductible. Mr. Jacobsen testified:
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Last modified: May 25, 2011