- 10 -
Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930). The
estimate, however, must have a reasonable evidentiary basis.
Vanicek v. Commissioner, 85 T.C. 731, 743 (1985). Without such a
basis, such an allowance would amount to unguided largesse.
Williams v. United States, 245 F.2d 559, 560 (5th Cir. 1957).
In light of the complete absence of any documents or
reasonable evidence substantiating petitioner's claimed expenses,
the Court concludes that petitioner is not entitled to deduct any
Schedule C expenses for 2000.
D. Self-Employment Tax
Generally, a sole proprietor who derives income from a trade
or business is considered to have received self-employment
income. Secs. 1.1401-1(c), 1.1402(c)-1, Income Tax Regs.
Self-employed individuals are also liable for self-employment tax
pursuant to section 1401 as part of their Federal income tax
liability. Secs. 1.1401-1(a), 1.6017-1(a)(1), Income Tax Regs.
Subject to statutory exclusions, the amount of
self-employment tax an individual owes is based on his "net
earnings from self-employment". Sec. 1402(a). "Net earnings
from self-employment" include "the gross income derived by an
individual from any trade or business carried on by such
individual, less the deductions allowed" which are attributable
to the trade or business. Id.; sec. 1.1402(a)-1(a)(1), Income
Tax Regs.
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