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$610 for parking. Respondent also conceded that petitioner was
entitled to a deduction for supplies. That concession is not
clear because petitioner claimed a separate line item expense of
$2,310 for supplies on Schedule C of the return, and that amount
was not disallowed or adjusted in the notice of deficiency.
Since a Rule 155 computation will be necessary in this case, the
nature and amount of this concession can be taken into
consideration by the parties in determining the deficiency.
With respect to the expenses listed above for car and truck,
meals and entertainment, and travel, petitioner did not address
those at trial. Instead, petitioner offered into evidence
envelopes as to each of these expenses containing receipts that
he contends would substantiate the amounts claimed on the return.
The envelopes referred to essentially contain only receipts;
however, the substantiation requirements of section 274(d) appear
to be applicable to all the amounts claimed. No books and
records were offered to corroborate or otherwise satisfy the
strict substantiation requirements of section 274(d).
Petitioner, being a former auditor for the IRS, certainly knew
what is required for substantiation of expenses of this nature.
The Court, therefore, declines to consider the exhibits offered
as proof that the expenses claimed are deductible. Respondent,
therefore, is sustained as to those expenses.
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