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produce records does not relieve the taxpayer of the burden of
proof.”). Certain expenses, e.g., interest, real estate taxes,
items paid by check or credit card, etc., can be substantiated by
records maintained by third parties. If the taxpayer’s own
records are not available, we expect the taxpayer to make some
attempt to obtain substantiating records from third parties in
those situations where it is reasonable to expect that third
party records exist. Cf. Gizzi v. Commissioner, 65 T.C. 342, 345
(1975); Cook v. Commissioner, T.C. Memo. 1991-590.
Petitioner admits that he has few, if any, records that
substantiate the deductions claimed on the Schedules C.
According to petitioner, most, if not all, of the records that
would substantiate the deductions here in dispute were seized in
the search of his residence. We note that the search of
petitioner’s residence occurred after petitioner’s 1988 return
had been examined and the resulting deficiency, additions to tax,
and interest had been assessed. Petitioner describes the
examination as “uncontested” and does not claim that
substantiating records were produced for respondent’s agent
during the course of that examination. Furthermore, to the
extent that substantiating records exist and were in his
possession at the time of the examination, he does not explain
why those records were not provided to respondent’s examining
agent.
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