- 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
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