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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).
Petitioner testified that his tax return preparer may have
erroneously characterized certain expenses, primarily related to
advertising, causing otherwise deductible expenses to be listed
on the return under the category of “supplies”. However,
petitioner was unable to provide any substantiation of either the
disallowed portion of the supplies expense or of any other
business expenses incurred but unclaimed on the returns. Because
petitioner has failed to provide any credible evidence regarding
the existence or amount of any such expenses, petitioner bears
the burden of proving respondent’s determination in the notice of
deficiency to be error. Sec. 7491(a)(1); Rule 142(a). Because
petitioner has failed to substantiate the expenses, we sustain
respondent’s disallowance of the deductions therefor.
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Last modified: May 25, 2011