-15-
Commissioner, T.C. Memo. 2001-301; Joseph v. Commissioner, T.C.
Memo. 1997-447. If the taxpayer claims a deduction but cannot
fully substantiate it, we may estimate the allowable amount if
there is sufficient evidence in the record to provide a basis for
the estimate. Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d
Cir. 1930); see also Vanicek v. Commissioner, 85 T.C. 731, 742-
743 (1985).
Petitioner failed to substantiate the business expenses and
startup expenditures disallowed by respondent. At trial,
petitioner introduced only a brief summary of expenses and two
promissory notes purportedly issued as payment for professional
services. None of those documents established the dates,
description, or business purpose of the expenses. The evidence
offered was completely inadequate to substantiate petitioner’s
claimed expenses as required by section 6001 and related
regulations.
The complete absence of credible evidence in the record also
precludes us from estimating petitioner’s expenses under Cohan.
Petitioner did not offer testimony or documents to describe the
nature and amount of the startup expenditures and business
expenses that In Touch allegedly incurred during 2000, nor did
petitioner offer the Court any credible explanation for In
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: November 10, 2007