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Although petitioner attached some documentation of these expenses
to his 2001 return, respondent has convincingly demonstrated that
the documentation was falsified and that several of the
signatures thereon were forged. In addition, respondent
introduced evidence at trial that petitioner admitted creating
some of the documentation attached to his 2001 return, and he
also convincingly established at trial that both of petitioner’s
employers had reimbursement plans to cover legitimate employee
business expenses during 2001. The record made by respondent and
the complete lack of credible evidence to substantiate
petitioner’s claimed employee business expenses convince us that
respondent has met his burden of proving by a preponderance of
the evidence that these expenses were properly disallowed.
With respect to the remaining miscellaneous expenses claimed
on Schedule A, respondent has adequately demonstrated that
petitioner has failed to substantiate the expenses as required by
section 6001 and related regulations. See sec. 6001; sec.
1.6001-1(a), (e), Income Tax Regs. Consequently, we sustain
respondent’s determination disallowing the expenses.
III. Disallowance of Schedule C Deductions
A. In General
In his notice of deficiency, respondent disallowed
petitioner’s 2001 Schedule C expense deductions and computed the
resulting income tax deficiency. When petitioner failed to
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