- 15 -
Hradesky v. Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam
540 F.2d 821 (5th Cir. 1976).
In addition, the Court is not bound to accept as gospel the
unverified and undocumented testimony of a taxpayer. Tokarski v.
Commissioner, 87 T.C. 74, 77 (1986); Hradesky v. Commissioner,
supra. Even when a taxpayer’s testimony is uncontroverted, we
are not required to accept it if it is improbable, unreasonable,
or questionable. Lovell & Hart, Inc. v. Commissioner, 456 F.2d
145, 148 (6th Cir. 1972), affg. T.C. Memo. 1970-335; MacGuire v.
Commissioner, 450 F.2d 1239, 1244 (5th Cir. 1971), affg. T.C.
Memo. 1970-89; Niedringhaus v. Commissioner, 99 T.C. 202, 212
(1992).12
We also observe that section 6001 and the regulations
promulgated thereunder require taxpayers to maintain records
sufficient to permit verification of income and expenses. See
sec. 1.6001-1(a), Income Tax Regs. As a general rule, if, in the
absence of such records, a taxpayer provides sufficient evidence
that the taxpayer has incurred a deductible expense, but the
taxpayer is unable to adequately substantiate the amount of the
deduction to which he or she is otherwise entitled, the Court may
estimate the amount of such expense and allow the deduction to
12 See also Diaz v. Commissioner, 58 T.C. 560, 564 (1972)
(describing “the ultimate task of a trier of the facts--the
distillation of truth from falsehood which is the daily grist of
judicial life”); Kropp v. Commissioner, T.C. Memo. 2000-148 (“As
a trier of fact, it is our duty to listen to the testimony,
observe the demeanor of the witnesses, weigh the evidence, and
determine what we believe.”).
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