Edward C. Rosa - Page 6

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               Where a taxpayer has established that he has incurred a                
          trade or business expense, failure to prove the exact amount of             
          the otherwise deductible item may not be dispositive.  Generally,           
          unless precluded by section 274, the Court may estimate the                 
          amount of such an expense and allow the deduction to that extent.           
          Finley v. Commissioner, 255 F.2d 128, 133 (10th Cir. 1958), affg.           
          27 T.C. 413 (1956); Cohan v. Commissioner, 39 F.2d 540, 543-544             
          (2d Cir. 1930).  In order for the Court to estimate the amount of           
          an expense, however, there must be some basis upon which an                 
          estimate may be made.  Vanicek v. Commissioner, 85 T.C. 731, 742-           
          743 (1985).  Without such a basis, an allowance would amount to             
          unguided largesse.  Williams v. United States, 245 F.2d 559, 560            
          (5th Cir. 1957).                                                            
               In this case, where petitioner presented no evidence in                
          support of his claimed business expenses, there is an                       
          insufficient basis upon which to estimate whether, and to what              
          extent, he incurred business expenses.                                      
          3. Addition to Tax Under Section 6651(a)(1)                                 
               Respondent bears the burden of production with respect to an           
          addition to tax.  Sec. 7491(c).  In order to meet this burden,              
          respondent must produce evidence sufficient to establish that it            
          is appropriate to impose the addition to tax.  Higbee v.                    
          Commissioner, supra at 446-447.  The parties agree that                     
          petitioner’s tax return was not filed until April 28, 2001.                 

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