-10-
Helvering, 292 U.S. 435, 440 (1934). Taxpayers are required to
maintain records that are sufficient to enable the Commissioner
to determine their correct tax liability. See sec. 6001; sec.
1.6001-1(a), Income Tax Regs. Additionally, taxpayers bear the
burden of substantiating the amount and purpose of the item they
claimed as a deduction. See Hradesky v. Commissioner, 65 T.C.
87, 89 (1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976).
Petitioners rely on their own testimony to substantiate the
claimed expenses and deductions at issue.3 The Court is not
required to accept petitioners’ unsubstantiated testimony. See
Wood v. Commissioner, 338 F.2d 602, 605 (9th Cir. 1964), affg. 41
T.C. 593 (1964). We found petitioners’ testimony to be general,
vague, conclusory, and/or questionable in certain material
respects. On the record, we repeatedly noted Mr. Arnold’s lack
of credibility. Under the circumstances presented herein, we are
not required to, and generally do not, rely on petitioners’
testimony to sustain their burden of establishing error in
respondent’s determinations. See Lerch v. Commissioner, 877 F.2d
624, 631-632 (7th Cir. 1989), affg. T.C. Memo. 1987-295; Geiger
v. Commissioner, 440 F.2d 688, 689-690 (9th Cir. 1971), affg. per
3 Petitioners also may rely on the testimony of William
Ray. Apart from Mr. Ray’s testimony that he was paid $3,122.52
for services rendered during 2003, most of Mr. Ray’s testimony
was general, vague, and conclusory. With the exception of the
amount he was paid, he generally lacked sufficient knowledge
about the items/facts in issue. Mr. Ray’s testimony is not
sufficient to support petitioners’ assertions.
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