- 36 -
any argument on brief regarding the additional amount.
Accordingly, respondent’s determination on the remaining claimed
deduction is sustained.
d. Miscellaneous Expenses
As to SCC’s other deductions (i.e., entertainment,
insurance, and rent), Mr. Strong was not able to proffer any
documentation to substantiate that the purpose of these expenses
was for business. Mr. Strong attributes the lack of
substantiation to two fires that resulted in the loss of his
receipts, but his general attitude regarding Federal income taxes
and his lack of credibility leave us with no reason to believe
receipts were ever maintained.
Even if we were persuaded that some portion of these
expenses was for business purposes, Mr. Strong has not offered
any evidence that would support his allocation of expenses or
otherwise allow the Court to reach an alternate determination
under Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930).
Thus, with regard to these additional expenses for which there
are no adequate receipts, SCC’s claim fails for lack of
substantiation.
III. Constructive Dividends to Mr. Strong
Respondent argues that the unreported business income of
SCC, measured by the deposits into account No. 893315300, is
taxable to Mr. Strong as constructive dividend income because Mr.
Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 NextLast modified: May 25, 2011