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purpose of the expenses. Sec. 274(d); sec. 1.274-5T, Temporary
Income Tax Regs., 50 Fed. Reg. 46006 (Nov. 6, 1985).
Petitioners have failed to substantiate any of the Schedule
C deductions or the employee business expense deductions
disallowed by respondent.4 Petitioners have failed to provide
evidence that the expenses were incurred, such as receipts, and
they have failed to sufficiently explain the underlying business
purposes. For example, petitioners claim to have traveled to
Hawaii in connection with the business of the sole
proprietorship. However, overlooking whether petitioners in fact
traveled to Hawaii primarily to sell table pads, they provided no
receipts for the travel, and their daily planner indicates that
their primary business-related activity was making phone calls--
calls which presumably could have been made from Colorado.
Petitioners assert that a flood destroyed many of the records
which would have provided substantiation. Even if this were the
case, however, petitioners have not adequately attempted to
reconstruct any destroyed records, by such means as obtaining
copies of bank or credit card records. Finally, petitioners have
not provided the Court with any basis upon which to estimate
expenses (with respect to those for which estimates may be made).
4Sec. 7491(a) does not shift the burden of proof to
respondent here because petitioners have failed to produce any
credible evidence with respect to the disallowed deductions.
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