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tasks other than routine family chores, the time sheet does not
provide a reasonable basis for applying the Cohan rule. See
Vanicek v. Commissioner, 85 T.C. at 742-743.
On the basis of all of the facts and circumstances, we
conclude that the payments to the daughters represent personal,
living, or family expenses. See sec. 262(a). Petitioners failed
to issue Forms W-2 and predetermined the amounts they would pay
their daughters. The daughters’ tasks were mostly in the nature
of routine family chores, and there was a lack of correlation
between the payments they received and the hours they worked.
Accordingly, petitioners cannot deduct the payments to their
daughters as wage expense. Respondent’s determination is
sustained.
4. Estoppel
Petitioners contend that at some point before or during
1998, they spoke to an employee of the Internal Revenue Service
(IRS) concerning their plan to hire their children as employees.
Petitioners contend the IRS employee indicated that petitioners
could deduct the compensation paid to their children.
Petitioners thus appear to argue that respondent is estopped from
disallowing their claimed deductions.
Equitable estoppel is a judicial doctrine that precludes a
party from denying his own acts or representations which induced
another to act to his detriment. Hofstetter v. Commissioner, 98
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