- 20 -
showing how much he spent to travel to the festivals. Thus,
petitioner may not deduct more than $4,188 for travel expenses in
1994 and $0 for 1993 and 1995.
d. Other Expenses
Respondent determined that petitioner did not substantiate,
and therefore may not deduct, expenses for electricity,
telephone, sewage, water, labor, and transportation used in his
business. Petitioner asks us to estimate the amount of these
expenses under Cohan v. Commissioner, 39 F.2d 540, 544 (2d Cir.
1930); see also Bayou Verret Land Co. v. Commissioner, 450 F.2d
850, 858 (5th Cir. 1971), affg. 52 T.C. 971 (1969). The taxpayer
must present credible evidence that provides a rational basis for
our estimate. Vanicek v. Commissioner, 85 T.C. 731, 743 (1985).
Petitioner offers only the vaguest estimates of his costs. It is
not appropriate under Cohan for us to guess the amounts of his
expenses. Thus, petitioner may not deduct any amounts for
miscellaneous business expenses.
4. Conclusion as to Unreported Income
Petitioner has not shown that he had unreported income less
than $139,425 in 1993, $239,655 in 1994, and $375,637 in 1995, as
determined by respondent. Thus we sustain respondent’s
determination.
Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NextLast modified: May 25, 2011