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car and truck expenses and travel, meals, and entertainment
expenses.
With respect to the Schedule C utilities expenses disallowed
for 1999, petitioners produced substantiating records in the form
of utility bills and thereby met the requirements of section
274(d) and the regulations. Sec. 280F(d)(4)(A)(v). The Court is
satisfied from petitioners' records that they incurred ordinary
and necessary business-related utility expenses in excess of
those allowed by respondent. Mr. Viar's testimony with regard to
the number of telecommunications devices and services he utilized
for business was credible. Some of his utility bills were
missing, but petitioners based their deductions only on the bills
provided. Their receipts reflected over $2,400 in expenses, yet
petitioners only deducted one-half of these, adjusting downward
in part so as not to include their residential or other
nondeductible phone expenses. The Court is satisfied that the
business utilities expenses documented exceeded the amount
allowed by respondent, and that the amount claimed was
substantiated. Therefore, the Court allows petitioners to deduct
the full amount claimed for utilities on Schedule C of their
return for 1999.5
5 As noted earlier, respondent allowed the entire amount
of $1,300 claimed by petitioners for utilities expenses for the
year 2000.
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