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separate from its shareholders, and the business of the
corporation is separate and distinct from the business of its
shareholders. Moline Props., Inc. v. Commissioner, 319 U.S. 436,
438-439 (1943); Deputy v. du Pont, 308 U.S. 488, 494 (1940).
Thus, a shareholder generally is not entitled to a deduction for
the payment of corporate expenses, Deputy v. du Pont, supra;
Hewett v. Commissioner, 47 T.C. 483 (1967), and petitioner
accordingly would not be entitled to deduct NAFTA’s expenses.
We assume arguendo that petitioner is asserting that the
$17,000 expense was incurred in connection with OU rather than
NAFTA. Nevertheless, petitioner provided only vague,
uncorroborated testimony to substantiate the $17,000 expense at
issue, and we do not find petitioner’s testimony concerning this
issue to be reliable. Furthermore, we note that petitioner’s
description of the expense at trial does not appear to be
consistent with the description of the expense given on the
Schedule C. We conclude that petitioner has failed to
substantiate the disallowed deduction. See sec. 6001; sec.
1.6001-1(a), (e), Income Tax Regs. Respondent’s disallowance of
the deduction is sustained.
3. Accuracy-Related Penalty
Respondent determined that petitioner is liable for the
accuracy-related penalty under section 6662(a) with respect to the
portion of the underpayment attributable to the omission of the
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