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evidence to substantiate the claimed business expense deductions
disallowed by respondent. Although petitioners contend that they
incurred significant labor expenses during the years in issue,
they were able to provide no more than the names of four
employees and an estimate of weekly payments made to such
employees.6 The Court may estimate the proper amount of
deductible expense when a taxpayer establishes that he paid or
incurred the expense but does not establish the amount of the
deduction. Boyd v. Commissioner, 122 T.C. 305, 320 (2004).
For such an estimate to be proper, however, the record must
evidence that the taxpayer paid or incurred a deductible expense
at least of the amount allowed. Id. The record in the instant
case provides no such evidence. Consequently, we conclude that
petitioners have failed to meet their burden of proving that
respondent erred in disallowing claimed business expense
deductions of $61,796 for petitioners’ 2000 tax year and $85,746
for petitioners’ 2001 tax year.
Section 1401 imposes a percentage tax on the self-employment
income of every individual. Self-employment income is defined as
“the net earnings from self-employment derived by an individual *
* * during any taxable year”. Sec. 1402(b). The term “net
earnings from self-employment” is defined as “the gross income
6Petitioner estimated the amounts paid to each of the four
employees per week but provided no evidence as to the number of
weeks worked by such employees.
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