- 3 -
determined that petitioner received unreported interest income of
$13.
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.
In the event that a taxpayer establishes that a deductible
expense has been paid but 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).1
The first deduction in dispute is the deduction for mortgage
interest. Mortgage interest generally is deductible under
section 163(a), subject to the requirements of section 163(h).
Petitioner argues that the $1,023 disallowed by respondent
represents interest he paid on a second mortgage. Petitioner,
however, was unable to provide any substantiation for this second
1Where petitioner has failed to provide the required
substantiation, as discussed in detail below, the burden of proof
does not shift to respondent pursuant to sec. 7491(a) and instead
remains on petitioner. Sec. 7491(a)(2)(A); Rule 142(a).
Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011