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distinct. The only evidentiary support provided by petitioners
for the disallowed deductions relates to the activities conducted
for Olray Corporation.
Ordinary and necessary expenses incurred in carrying on a
trade or business generally are deductible by the individual
engaged in the trade or business. Sec. 162(a).
A taxpayer generally must keep records sufficient to
establish the amounts of the items reported on his Federal income
tax return. Sec. 6001; sec. 1.6001-1(a), (e), Income Tax Regs.
However, in the event that a taxpayer establishes that a
deductible expense has been paid but that he is unable to
substantiate the precise amount, we generally may estimate the
amount of the deductible expense bearing heavily against the
taxpayer whose inexactitude in substantiating the amount of the
expense is of his own making. Cohan v. Commissioner, 39 F.2d
540, 543-544 (2d Cir. 1930). We cannot estimate a deductible
expense, however, unless the taxpayer presents evidence
sufficient to provide some basis upon which an estimate may be
made. Vanicek v. Commissioner, 85 T.C. 731, 743 (1985).
Section 274(d) supersedes the Cohan doctrine. Sanford v.
Commissioner, 50 T.C. 823, 827 (1968), affd. 412 F.2d 201 (2d
Cir. 1969). As relevant here, section 274(d) provides that,
unless the taxpayer complies with certain strict substantiation
rules, no deduction is allowable for expenses with respect to
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