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We begin by noting that Mr. Brown admitted that he had no
written records of these utilities expenses. He testified with
estimations as to the expenses of local and long distance
telephone service, a cellular telephone, computers, and an
internet connection. The cellular telephone and the computers
are subject to the more stringent substantiation requirements of
section 274(d), and deduction of these expenses is not allowable
based on testimony and estimations alone. See Murata v.
Commissioner, supra; Golden v. Commissioner, supra. Mr. Brown
testified that 25 percent of his home’s local telephone service
was used for his law practice. When any charge for basic local
telephone service is based on the first telephone line provided
to any residence of a taxpayer, it shall be treated as a personal
expense and is not deductible. Sec. 262(b).
Mr. Brown further testified to the exclusive use of the home
office for purposes of his law practice, but he presented no
evidence establishing the frequency or regularity with which the
home office was used, or the duties he performed there. Mr.
Brown testified that “potential clients” would sometimes meet
4(...continued)
(4th Cir. 1990), affg. 91 T.C. 686 (1988). Mr. Brown only had
one income-producing client during the year at issue, and that
was the business operated by his wife, Mrs. Brown. Given our
finding and conclusion, infra p. 10, that petitioners did not
substantiate the claimed amounts, we need not and do not address
the issue further.
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