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T.C. 87, 89-90 (1975), affd. per curiam 540 F.2d 821 (5th Cir.
1976).1
Taxpayers are required to maintain records that are
sufficient to enable the Commissioner to determine the correct
tax liability. See sec. 6001; sec. 1.6001-1(a), Income Tax Regs.
Failure to prove the exact amount of an otherwise deductible item
may not always be fatal, because generally, unless precluded by
section 274, we may estimate the amount of such an expense and
allow the deduction to that extent. Finley v. Commissioner, 255
F.2d 128, 133 (10th Cir. 1958), affg. 27 T.C. 413 (1956); Cohan
v. Commissioner, 39 F.2d 540, 544 (2d Cir. 1930). In order for
the Court to estimate the amount of an expense, however, there
must be some basis upon which an estimate may be made. Vanicek
v. Commissioner, 85 T.C. 731, 742-743 (1985). Without such a
basis, an allowance would amount to unguided largesse. Williams
v. United States, 245 F.2d 559, 560 (5th Cir. 1957).
Section 274(d) provides, however, that no deduction shall be
allowed with respect to any "listed property", as defined in
section 280F(d)(4), unless the taxpayer substantiates by adequate
records or sufficient evidence to corroborate the taxpayer's own
testimony: (1) The amount of the expenditure or use based on the
1Petitioner has made no argument that the burden of proof
shifting provisions of sec. 7491 apply to this case, nor has he
offered any evidence that he has complied with the requirements
of sec. 7491(a)(2).
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