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were withheld, their pay was reported on a Form 1099, and the
1991 salary was paid in a lump sum to each. We conclude that
respondent properly treated the payments to Dominique and
Jonathan as nondeductible personal expenditures and indicia of
fraud.
Petitioner overstated deductions for travel, meals and
entertainment expenses and failed to provide credible evidence to
support such deductions at trial. During the examination of
petitioners’ taxable years 1991 and 1992, petitioners’
representative provided Agent McCarter with a travel log prepared
by Mr. Black which purported to show Mr. Black’s business travel
for taxable years 1991 and 1992. Agent McCarter returned the log
to petitioners’ representative because she could not read Mr.
Black’s handwriting and requested a legible copy of the log or
other documentation to support Mr. Black’s deductions. Neither
Mr. Black nor his representatives ever provided a new travel log
or any other evidence to support his deductions for business
travel, meals, or entertainment.
Agent McCarter concluded that, on the basis of the amounts
of claimed travel deductions and Mr. Black’s use of the standard
mileage rate, Mr. Black had to have driven 156,669 miles in 1991
and 181,692 miles in 1992, which averages 429 miles per day in
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