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There must be sufficient evidence in the record, however, to
permit us to conclude that a deductible expense was paid or
incurred. Williams v. United States, 245 F.2d 559, 560 (5th Cir.
1957).
One “contractor”,2 Mandy Babyak, who worked for petitioner’s
nursing business in 2000 testified regarding petitioner’s nursing
business expenses. We found Ms. Babyak to be credible. We shall
rely on Ms. Babyak’s testimony to estimate petitioner’s nursing
business expenses under the Cohan doctrine.
1. Contractor Expenses
Petitioner claimed $23,100 in expenses for subcontractors
for 1999. For 1999, respondent allowed $575 in the notice of
deficiency and conceded an additional $8,550.77 on brief for a
total of $9,125.77. This $9,125.77 represents checks paid to
Carol Blank, Robert Shearer, and Kim Atkins. Petitioner has
failed to substantiate that any additional amounts were paid to
contractors in 1999. Accordingly, respondent’s determination, as
modified by his concession, is sustained.
Petitioner claimed $49,836 in expenses for subcontractors
for 2000. For 2000, respondent conceded on brief $58,528 in
contractor expenses. This concession represents amounts paid by
2 We use the term “contractor” for convenience only. We
make no findings whether the people who worked for petitioner’s
nursing business were independent contractors or employees.
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