- 56 -
(e) For 1989, petitioner documented salary payments of
$22,288.21 (Ex. 40-R, lines 509-532) and daycare expenses of
$1,591.80 paid for one of her employees (Ex. 40-R, lines 551-
571), the deductibility of which respondent has conceded.
(f) For 1990, petitioner documented salary payments of
$6,658.20 (Ex. 41-R, lines 98-116) and $18,707.32 (Ex. 41-R,
lines 856-873), the deductibility of which respondent has
conceded.
Although petitioner did not introduce all of her payroll
records into evidence, we are convinced that her failure to do so
was more likely than not the result of the sheer volume of
documentation with which she was dealing at trial and the lack of
attention paid by both petitioner and respondent to the actual
Schedule C categories. Petitioner, however, credibly testified
at trial that she paid salaries, a telephone allowance, life
insurance, health insurance, school and summer childcare
expenses, and automobile expenses (including car insurance, a gas
allowance, and car payments) to or for the benefit of her
employees during 1987, 1988, and part of 1989. We also note that
the documented amounts if annualized would generate an annual
figure consistent with, or larger than, the amounts claimed on
petitioner’s Schedules C for the years at issue. We shall apply
the Cohan rule to uphold petitioner’s wage and employee benefits
deductions for each of the years at issue.
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