Douglas L. and Nancy H. Maxfield - Page 7

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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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