Robert and Cheryl McKeown - Page 13




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          year are deductible, but personal, living, or family expenses are           
          not deductible.  Secs. 162(a), 262.  Services performed by an               
          employee constitute a trade or business.  O’Malley v.                       
          Commissioner, 91 T.C. 352, 363-364 (1988); sec. 1.162-17(a),                
          Income Tax Regs.                                                            
               If a taxpayer establishes that he or she paid or incurred a            
          deductible business expense but does not establish the amount of            
          the deduction, we may approximate the amount of the allowable               
          deduction, bearing heavily against the taxpayer whose                       
          inexactitude is of his or her own making.  Cohan v. Commissioner,           
          39 F.2d 540, 543-544 (2d Cir. 1930).  For the Cohan rule to                 
          apply, however, a basis must exist on which this Court can make             
          an approximation.  Vanicek v. Commissioner, 85 T.C. 731, 742-743            
          (1985).  Without such a basis, any allowance would amount to                
          unguided largesse.  Williams v. United States, 245 F.2d 559, 560            
          (5th Cir. 1957).                                                            
               Certain business expenses may not be estimated because of              
          the strict substantiation requirements of section 274(d).  See              
          sec. 280F(d)(4)(A); Sanford v. Commissioner, 50 T.C. 823, 827               
          (1968), affd. per curiam 412 F.2d 201 (2d Cir. 1969).  For such             
          expenses, only certain types of documentary evidence will                   
          suffice.                                                                    










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