- 10 -
Temporary Income Tax Regs., 50 Fed. Reg. 46022 (Nov. 6, 1985),
which allow taxpayers to reasonably reconstruct their business
expenses when original documents are lost or destroyed through no
fault of the taxpayers.
Respondent argues that petitioners failed to present
credible evidence to substantiate that they incurred business
expenses in excess of the amount allowed by the notice of
deficiency, and that petitioners have not provided the Court with
a sufficient basis on which to make a Cohan estimation. Also,
respondent argues that several of the claimed deductions were for
nondeductible, personal expenses. Finally, respondent argues
that petitioners have not met the heightened substantiation
burden imposed by section 274 for those deductions to which
section 274 applies.
At trial, petitioners managed to produce a smattering of
canceled checks, receipts, and other records from 1999.
Petitioners also presented exhibits containing reconstructions of
various categories of expenditures for 1999 that Dr. Rinker made
with the computer program Quicken (Quicken reports). In their
testimony, petitioners related to the Court their memories of
their financial activities during 1999, the transactions
underlying the source documents, and the way they arrived at the
amounts contained in their 1999 return and in the exhibits they
prepared in anticipation of trial.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011