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deduction shall be allowed for personal, living, or family
expenses.” Sec. 262(a). Furthermore, section 274(d) provides
that no deduction shall be allowed, inter alia, with respect to
travel and entertainment expenses and “listed property (as
defined in section 280F(d)(4))” unless the taxpayer substantiates
by adequate records or by sufficient evidence corroborating the
taxpayer’s own statement (1) the amount of such expense or item,
(2) the time and place of the travel, entertainment, or use of
the property, (3) the business purpose of the item, and (4) the
business relationship to the taxpayer of the persons entertained
or using the property. Listed property includes passenger
automobiles. Sec. 280F(d)(4)(A)(i).
Petitioner claims to have two separate businesses operating
under the names of Galaxy and CSCI. Petitioner's testimony
concerning both was confusing. It is axiomatic that a taxpayer
must be engaged in a trade or business if any expense is
deductible under section 162. Respondent concedes that
petitioner was engaged in a trade or business, but, as far as we
can determine from this record, that concession is based on
petitioner’s activity as a hearing officer for the county.
Petitioner also claims that he “deals in legal issues”. We found
that his testimony concerning this activity was, at best,
confusing and contradictory. First, his testimony concerning
income from this activity was obtuse. He “went out to California
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Last modified: May 25, 2011