Hilary Harry Sax - Page 7

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          provided no substantiation.  At trial, petitioner offered no                
          substantiation for any of the deductions.  Petitioner did not               
          have any books, records, receipts, or other documents to                    
          substantiate expenses claimed on his Schedule C.  Petitioner also           
          candidly admitted that “We didn’t build anything in 1999" and               
          that we were “unable to raise the money to do business.”                    
               Petitioner acknowledged that he did not maintain a separate            
          bank account to pay expenses.  He did not maintain a business               
          office.  He operated out of his own apartment.  He had no                   
          business records, no books, no checks, and no receipts.  When               
          asked about these, he replied “No I did not keep them.”                     
               We conclude that petitioner did not prove that the claimed             
          deductions were his ordinary and necessary business expenses.  We           
          further conclude that petitioner failed to substantiate any                 
          Schedule C expenses claimed as deductions in 1999.  For these               
          reasons, the Schedule C expenses are disallowed in full.                    
               Contentions we have not addressed are irrelevant, moot, or             
          without merit.                                                              
               Reviewed and adopted as the report of the Small Tax Case               
                                                  Decision will be entered            
                                             for respondent.                          

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