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DUI’s Claimed Business Expenses
Section 162 allows deductions for ordinary and necessary
expenses incurred in carrying on a trade or business. Deductions
are a matter of legislative grace, and taxpayers generally have
the burden of showing they are entitled to the deductions
claimed. Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S.
79, 84 (1992).
Where taxpayers are unable to fully justify their
entitlement to claimed business deductions, this Court may
approximate the amount of allowable business deductions, bearing
heavily against the taxpayer whose inexactitude is of his own
making. Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir.
1930). For the Cohan rule to apply, however, a basis should
exist on which an approximation can be made by this Court.
Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985).
Petitioner has not established any evidentiary basis
justifying an application of the Cohan rule, and petitioner has
not met his burden of proving his entitlement to additional
business expense deductions. We sustain respondent’s
determination of DUI’s allowable business expense deductions.
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Last modified: May 25, 2011