- 24 -
Accordingly, we conclude that “lumber services” were, in
fact, within the scope of section 162(a), as helpful to the
development of Mr. Nwankwo’s business insomuch as they enabled
him to save time and make a greater number of deliveries. If the
record provides sufficient evidence that the taxpayer has
incurred a deductible expense, but the taxpayer is unable to
adequately substantiate the amount of the deduction to which he
or she is otherwise entitled, the Court may estimate the amount
of such expense and allow the deduction to that extent. See
Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930); Green
v. Commissioner, T.C. Memo. 1989-599.
In this case, however, although we find Mr. Nwankwo’s
testimony credible to the fact that he did incur these expenses
on certain occasions, we must recognize that he provided neither
a total dollar amount nor the actual slips that he received from
these laborers, nor any other testimony upon which we could base
a Cohan estimation. See Vanicek v. Commissioner, 85 T.C. 731,
742-743 (1985). Accordingly, for lack of basic evidence, we must
sustain respondent’s determination with respect to these
expenses.
Section 6662(a) Penalty
As previously stated, respondent, in the notices of
deficiency, determined that petitioners are liable for accuracy-
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