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estimate unless the taxpayer presents sufficient evidence to
provide a reasonable basis upon which the estimate is made.32
Vanicek v. Commissioner, 85 T.C. 731, 743 (1985).
Mr. Sowards testified that he and Ms. Cheryl Nunn (Ms.
Nunn), a financial planner, were working together on a few cases.
He testified that one day, Ms. Nunn came to his office and
mistakenly took two bankers boxes of documents from a chair.
According to Mr. Sowards’s testimony, Ms. Nunn took the boxes to
her cabin in the Santa Cruz mountains where they were destroyed
by a fire. Mr. Sowards testified that among those items
destroyed were the documents which substantiate the expenses
claimed on the returns and also documents concerning the alleged
loan between Mr. Strong and Mr. Sowards. For support, Mr.
Sowards introduced a fire department’s report that the fire
occurred.
The record before us is conspicuously devoid of any credible
evidence or testimony substantiating the alleged deductions
claimed. Petitioners presented no evidence (not even Mr.
Sowards’s testimony) substantiating any item of deduction. There
was no testimony as to what car and truck expenses were incurred,
32The Court’s ability to estimate reasonably the amount of a
deduction is curtailed in the case of certain classes of
expenses. Sec. 274(d) limits the Court’s estimating ability.
Sanford v. Commissioner, 50 T.C. 823, 827 (1968), affd. per
curiam 412 F.2d 201 (2d Cir. 1969); see Golden v. Commissioner,
T.C. Memo. 1993-602.
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