T .C. Su m m ary Op i n io n2 01 9 -3 1

UNITED STATES TAX COURT
BRENT KATUSHA, Pet i t i o n er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 6 8 7 9-1 7S. Fi l edOct o b er 1 0 , 2 0 1 9
.

Bren tKatu s h a, p ro s e. El i zab et h F. Ro d o n i an dVi ct o ri a Z. Gu , fo r res po n d en t .

SUM M ARY OPINION PANUTHOS, Sp eci al Tri al J u d g e: Th i s cas e was h eardp urs u an t t o th e p ro v is i o n s o f s ect i o n 7 4 6 3 o f t h e In t ern al Rev en u e Co d e i n effect wh en th e p et i t i o n was fi l ed
. 1 Pu rs u an t t o s ect i o n7 4 6 3(b ), th e d eci si on t o b e en t eredi s n o t

1 Un l es s o th erwi s e i nd i cat ed , s ect io nreferen ces are t o t h e In t ern al Rev en u e (co n ti n u ed ...)- 2
-

rev i ewab l e b y

an y o ther co u rt , an d t h i s o p i n i o ns h al l n o tb e t reat ed as p reced en t fo r an y o th er cas e. Res p o n d en td et erm i n eda d efi ci en cy o f $ 4 ,0 9 0 i n p et i t i o n er’ s Fed eral i n co m e t ax fo r t ax y ear 2 0 1 4 as a res u l t o f u nrep o rt edi n co m e. In a jo i n t
s t ip u l at i o n o f s et t ledi s s u es fi l edwi th th i s Co u rt , p et i t i on er ag reedth ath e d i dn o t rep o rt$ 1 0 ,0 8 1 o f n on em p l oy ee co m

p en s at i o n . Hav i n g ag reedt o the ad ju s t m en t fo r o m i t t edi n co m e, p et i t io ner n o w as s ert s h e i s en t it l edt o ad d i t i o n al ex p en s e d educt i o n s o n Sch edu l e C, Pro fi to r Lo s s Fro m Bu s i n es s . Th e s ol e i s su e fo r d eci s i o n i s wh et her p et i ti o n er i s en t i t l ed t o d edu ctcert ai np urp o rt ed b us i n es s
ex p en s es i n ex ces s o f t h o se res p o n d en tal l owed
. Back gro u n d So m e o f t h e fact s h av e b een s ti p u lat ed an dare s o fo u n d. Th e s t ip u l at i o n s o f fact an dth e at t ach ed ex hi bi t s are i nco rp o rat edh erei n b y th i s referen ce. Pet i t i o n er
res i dedi n Cal i fo rn ia wh en th e p et i t i o n was t i m el y fi l ed
. I. Pet i t i o ner’ s Bu s i n es s Act i v it y Pet i t i o ner h as wo rk edas a p ro fes s i o n al au t o m o bi l e raci n g m ech an i c i n Cal i fo rn i a s i n ce 1 9 9 9 , s p eci al i zi n g i ncar fab ri cat i o nan dm ai n ten an ce. Du ri n g t ax

1 (...co n t in u ed ) Co d e i n effect fo r t h e y ear i n i s s u e, Ru l e referen ces are t o th e Tax Co u rtRu l es o f Pract i ce an d Pro cedu re, an dd o l l ar am o un t s are ro u n d ed t o th e n eares td o l l ar.- 3
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y ear 2 0 1 4 p et i ti o n er wo rk ed as a co n tract race m ech an i c fo r s ev eral p ro fes s i o n al In dy Car raci n g t eam s . 2 He al s o wo rk edfo r an en g i n eeri n g fi rm wh ere h e b u i l t
ro b o ti c m ach in es fo r u s e i n v eh i cl e m an u fact u ri ng o v ers eas . In h i s wo rkfo r t h e raci n g t eam s p et i t i o ner at t en d edtrai ni n g d ay s an d“ race week en d s ” atv ari o u s raceway s i nCal i fo rn i a an del s ewh ere i n th e wes t ern Un i ted St at es . Hi s raci n g b u s i n es s co n s i s t edo f h au l i ng race cars t o an d fro m th e raceway s an dm ai n t ai n i n g th e cars b efo re, du ri ng , an daft er t h e races . Pet i t i o n er
es t i m at es th ath e wo rk edap p ro x i m at el y 2 0 race week en d s an d an ad d i ti o n al 3 0 t o 5 0 p ract i ce d ay s du ri n g 2 0 1 4 . Pet i t io n er reg ul arl y h adm eal s an dco ffee wi th
m em b ers o f race t eam s, i n cl u d i n g m ech an i cs an den g i n eers . He o ft en d i s cu s s ed h i s b u s i n es s act i v i ty

atth es e m eal s . He al s o at t en d ed o r arran g edv ari o u s
en t ert ai n m en tev en ts atwh i ch h e n et w ork edwi th cl i en ts an dco l l eag ues . II. Pet i t i o ner’ s Tax Retu rn an dRes po n d en t’ s Det erm i n at i o n Pet i t i o ner t i m el y

fi l eda 2 0 1 4 Fo rm 1 0 4 0 , U.S. In di vi dual In co m e Tax Retu rn . He h i red a p ro fes s io n al t ax retu rn p rep arer. On Sch edu l e C p et i t i o n er rep o rt edn o n em

pl o y ee co m

p en s at i o no f $ 6 1 ,3 99 an dex p en ses o f $ 1 3 ,1 4 6 rel at ed t o h i s s el f-em

p l o ym en t act i vi ty .

2 Pet i t i on er ex p l ai n edth atIn dy Car raci n g i s a d i s ci p l i n e o f car raci n g i nth e Un i ted St at es .- 4
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As i n d i cat ed , p et i ti o n er co n ced edth ath e recei vedan dd i dn otrep o rt $ 1 0 ,0 8 1 o f n o nem

p l o y ee co m

p en sat i o n . Pet i t io n er n o wco n t en d s th ath e i s
en t i t l edt o d edu ctb u s i nes s ex p en s es o f $ 7 ,3 5 5 i nex ces s o f t h o s e t hath e p rev i o u s l y rep o rt edo n the 2 0 1 4 Sch edu le C. Th e ad d i t io n al ex p en s es i n cl u d e $ 7 ,1 7 1 fo r m eal s an d en t ert ai n m en t , $ 6 9 fo r g ift s , an d$ 1 1 5 fo r o ffi ce. III. Pet i t i o ner’ s Bu s i n es s Reco rd s Pet i t i o ner h i reda cert ifi edp ub l i c acco u n t an t(C.P.A.) b as edi nSan ta Ro s a, Cal i fo rn i a, t o as s em

b l e t h e recei p t s an d o th er d o cu m en t s n eed edt o s ub s t an t i at e h i s b u s i n es s -rel at edex p en s es fo r t ax y ear 2 0 14 . M an y o f t h e d o cu m en t s were l o s t wh en th e C.P.A.’ s h o u s e was d es tro y edi na wi l d fi re i nOct o b er 2 0 1 7 . Becau s e o f th e d am ag e t o h i s b u si n es s an dh o m e, t h e C.P.A. was u n ab l e t o as s i stp et it i o n er i n
reco n s tru ct i n g an d as s em b l i n g d o cu m en t s n eed edt o s up p ortth e cl ai m ed ex p en s e d educt i o n s b efo re t ri al
. As a res u l t o f t h es e ev en t s p et i t i on er’ s b u si n es s ex pen s e reco rd s are l i m i t ed
. Th e Co u rtrecei v edi n to ev id en ce 4 9 p ag es o f m on thl y ch eck i n g acco u n t
s t at em en t s fo r 2 0 1 4 fro m W el l s Farg o Ban k , N.A. Th e ch eck i n g acco u n t
s t at em en t s p ro v i d e t h e n am e o f th e v en d o r, th e d at e, an dth e am ou n to f each ch arg e. Pet i t i o n er m ark edth e ch eck i n g acco u nts t at em en t s wi th h an dwri t t en ab b rev iat i o n s n o t i n g v ari o u s co m p an i es an di n d i v i du al s t h ath e wo rk edwi th i n th e- 5
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raci ng i n du s try , e.g ., “ SPT” fo r Sm al l Preci s i o nTo o l , “ Sen d -It ” fo r Sen d -It M o t o rs p o rt s , an d“ W o rl d sp eed ” fo r W orl dSp eedM o to rs p o rt s . Pet i t i o n er al s o p ro ducedan em ai l d at edFeb ru ary 1 8 , 2 0 1 4 , fro m

W o rl d Sp eedM o t o rs po rt s th at d et ai ls th e 2 0 1 4 s ch edu le fo r i t s raci n g t eam . Pet i t i o ner as s ert s th at h e ei th er at t en dedt es t d ay s o r t h e race week en d s rel at edt o 5 o f t h e 1 0 raci n g ev en t s l i s t ed
o n th e W o rl dSp eedM o t o rs p o rt s s ch edu l e. To s up p o rtth is as s ert i o nh e o ffered d i g i t al co p i es o f race res u lt s an ds ch edul es rel at ed t o tho s e ev en ts i n t o ev i d en ce. Di s cu ss i o n I. Bu rd en o f Pro o f In g en eral , th e Co m

m i s s i o n er’ s d et erm i n at i o n s etfo rt h i n a n o t i ce o f d efi ci en cy

i s p res um edco rrect , an d t h e t ax p ay er b ears th e b u rd en o f p ro v i ng th at th e d et erm i n at i o n i s i n erro r. Ru l e 1 4 2 (a); W el ch v . Hel v eri n g, 2 9 0 U.S. 1 1 1 , 1 15 (1 9 3 3). Pu rs u an tt o s ect i o n 7 4 9 1 (a), t h e b u rd eno f p ro o f as t o fact ual m at t ers
s h i ft s t o th e Co m

m is s i o n er u n d er cert ai nci rcu m s t an ces . Pet i t io n er h as n o t
as s ert ed o r o th erwi se s h own thats ect i o n7 4 9 1 (a) ap p li es . See s ec. 7 4 9 1 (a)(2 )(A)
an d (B). Th erefo re, p et i t i o ner b ears th e b urd en o f p ro o f. II. Pet i t i o ner’ s Sch edu l e C Dedu ct i o n s Dedu ct i o n s are a m at t er o f l eg i s l at i v e g race, an dthe t ax p ay er g en eral l y b ears th e b urd en o f p ro vi ng h e i s en t i tl edt o an y d edu ct i o n cl ai m ed
. Ru l e 1 4 2 (a);- 6
-

INDOPCO, In c. v . Co m

m i s s i o ner, 5 0 3 U.S. 7 9 , 8 4 (1 99 2 ); New Co l o n i al Ice Co
. v . Hel v eri n g , 2 9 2 U.S. 4 3 5 , 4 4 0 (1 9 3 4 ). A t ax p ay er cl ai m i n g a d edu ct i o no na Fed eral i nco m e t ax return m u s td em on s trat e t h atth e d edu ct i o n i s al l o wab l e p u rs u an t t o s o m e s tatu t o ry p ro vi s i o nan dm

u s t fu rt h er s ubs t an t i at e t h atth e ex p en s e t o wh ich th e d edu ct i on rel at es h as b een p ai do r i n cu rred . See s ec. 6 00 1 ; Hrad es ky
v . Co m m i s s i o n er, 6 5 T.C. 8 7 , 8 9 -9 0 (1 9 75 ), aff’ dp er cu ri am , 5 40 F.2 d 8 2 1 (5 th Ci r. 1 9 76 ); M en eg u zzo v . Co m m i s s io n er, 4 3 T.C. 8 2 4, 8 3 1 -8 3 2 (1 9 6 5 ); s ec. 1 .6 00 1 -1 (a), In co m e Tax Reg s . A t ax p ay er m ay

d edu cto rd i n ary

an d n eces s ary

ex p en ses p ai di n co nn ect i o n wi th o perat i ng a t rad e o r b u s i n es s . Sec. 1 6 2 (a); Bo y dv . Co m m i s s i o n er, 1 2 2 T.C. 3 0 5 , 3 1 3 (2 0 0 4). Gen eral l y , n o d edu ct i o n i s al l owedfo r p ers o n al , l i v i ng , o r fam i ly
ex p en s es . See s ec. 2 6 2 (a). Th e t ax pay er m u s ts h o w th atan y

d edu ct ed ex pen s es were i n cu rredp ri m ari l y

fo r b us i n es s rat h er th anp ers o n al reas o n s. See Ru l e 1 4 2 (a); W al l i s er v . Co m

m i s s i o n er, 7 2 T.C. 4 3 3, 4 3 7 (1 9 7 9). A p ro x i m at e rel at i o n s h i p b et ween each d edu ct edex p en s e an dth e b u s i n es s i s req u ired . See W al l i s er v . Co m

m i s s io n er, 7 2 T.C. at4 37
. Th e t ax p ay er i s req ui redt o m ai n t ai n reco rd s s uffi ci en t t o s ub st an t i at e
ex p en s es u n d erl y i n g d edu ct i on s cl ai m edo nh i s retu rn . Sec. 6 0 0 1 ; s ec. 1
. 6 00 1
- 1 (a), (e), In co m e Tax Reg s .; s ee New Co l o n i al Ice Co . v . Hel v eri n g , 2 9 2 U.S. at- 7
-

4 4 0 . If th e t ax p ay er i s ab l e t o es t ab l i s h thath e p ai do r i n cu rreda d edu ct i b l e
ex p en s e b u t i s u n ab l e t o s ub s t an t i at e t h e p reci s e am o un t , th e Co u rtg en eral l y m ay ap p ro x i m at e t h e d edu ct ib le am o u n t , b u to nl y i f th e t ax pay er p res en t s s u ffi ci en t
ev i d en ce t o es t ab l i s h a rat io n al b as i s fo r m ak i n g th e es t i m at e. See Co h an v . Co m m i s s i o n er, 3 9 F.2 d5 4 0 , 5 4 3 -5 4 4 (2 d Ci r. 1 93 0 ); s ee al so Van i cek v . Co m m i s s i o n er, 8 5 T.C. 7 31 , 7 4 2 -7 4 3 (1 9 8 5 ). Th e fai l u re t o k eep an dp ro du ce ap p ro p ri at e reco rd s co un t s h eav i l y ag ai n s t a t ax p ay er’ s at t em p t edp ro o f. Ro g ers v . Co m m i s s i o n er, T.C. M em o . 2 0 1 4 -1 4 1 , at* 1 7
. Sect io n 2 7 4 (d ) i m

p o s es s tri ct er s ub s t an t iat i o nreq u irem en t s fo r cert ai nk i n d s
o f ex p en s es o th erwi se d edu ct i bl e u n d er s ect i o n 1 6 2 (a). No d edu ct i o n i s al l o wed fo r t rav el ex p en ses , g i ft s , m eal s, an d en t ert ai n m en t, o r fo r l i st edp ro p ert y as d efi n edb y

s ect i o n 2 8 0 F(d )(4 ), u n l es s th e t ax pay er s ub s tan t iat es b y ad equ at e
reco rd s o r co rro b orat es by s u ffi ci en tev i d en ce t he t ax p ay er’ s o wns t at em en t s as t o : (1 ) t h e am o u n t o f t h e ex p en s e, (2 ) t he t i m e an dp lace t h e ex pen s e was i n cu rred , (3 ) t h e b u s in es s p u rp o s e o f t h e ex p en s e, an d(4 ) th e reci p i en t ’ s b us i n es s rel at i o n s h i p fo r each ex pen d i ture. Sec. 2 7 4 (d ); s ec. 1 .2 7 4 -5 T(a), (b ), an d(c), Tem p o raryIn co m e Tax Reg s ., 5 0 Fed . Reg . 4 6 01 4 , 4 6 0 1 6 (No v . 6 , 1 9 8 5 ). Sect i o n 2 7 4 (d ) s ub s t an t i at i o n req u i rem en t s s up ers ed e t h e Co h an t es t . See San fo rdv .- 8
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Co m m i s s i o n er, 5 0 T.C. 8 23 , 8 2 7 -8 2 8 (1 9 6 8 ), aff’ d , 4 1 2 F.2 d 2 0 1 (2 dCi r. 1 9 6 9 );
s ec. 1 .2 7 4-5 T (a), Tem

p o raryIn co m e Tax Reg s ., s up ra. Sub s t an t i at i o n b y

ad equ at e reco rd s req u i res th e t ax p ay er t o m ai n tai nan
acco u n t bo o k , a d i ary , a l og , a s t at em en to f ex p en s e, t ri p s h eet s , o r a s i m i l ar reco rd p rep aredco n t em

p o ran eo u s l y wi th th e ex p en d i ture an dd ocu m en t ary ev i d en ce (e.g ., recei p t s o r p ai db i l l s ) o f cert ai nex p en d i tu res . Sec. 1
. 2 7 4 -5 (c)(2 )(i i i ), In co m e Tax Reg s .; s ec. 1 .2 7 4 -5 T(c)(2 ), Tem p o raryIn co m e Tax Reg s ., 5 0 Fed . Reg . 4 6 0 1 7 (No v. 6 , 1 9 8 5 ). Sub s t an t iat i o n b y o th er s u ffi ci en tev i d en ce req u i res th e p ro duct i o n o f co rro bo rat i v e ev i d en ce i ns upp o rt o f t h e t ax p ay er’ s s t at em en t
s p eci fi cal l y

d et ai l i ng th e req u i redel em en t s . Sec. 1 .2 7 4-5 T(c)(3 ), Tem p o rary In co m e Tax Reg s ., 5 0 Fed . Reg . 4 6 0 2 0 (No v . 6 , 1 9 8 5 ).

“ Wh ere t h e t ax p ay er es t ab l i s h es th atth e fai l u re t o p ro du ce ad equ at e reco rd s i s du e t o th e l o s s o f s u ch reco rd s th ro u g h ci rcu m s tan ces b ey on dth e t ax p ay er’ s
co n tro l , s u ch as d es tru ct i o n b y fi re, fl o o d , eart h qu ak e, o r o th er cas u al ty , th e t ax p ay er s h al l h av e a ri g h tt o s ub s t an t i at e a d edu ct i o nb y reas o n ab l e
reco n s tru ct i o n o f h is ex p en di tu res o r u s e.” Id . s ub p ara. (5 ), 5 0 Fed . Reg . 4 6 0 2 2
. Th e b urd en i s o n t h e t ax p ay er t o s h o w th atthe d o cu m en t at i o nwas actu al l y l o s to r d es tro y edb ecau s e o f ci rcu m s t an ces b ey o n dh is co n tro l . See M cCl el l an v . Co m m i s s i o n er, T.C. M em o . 2 0 1 4 -2 5 7 , at* 1 3
.- 9
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Th e Co u rtrecei v edcred i b l e ev id en ce t o co rro b orat e t h e fact that p et i t i o n er’ s C.P.A.’ s h om e was d es tro y edi n a wi l d fi re. Pet i t i o n er, h o wev er, d i d
n o tp ro v i d e ev i d en ce b y

m ean s o f t es t i m o n y

o r d o cu m en t s as t o h i s u s u al b u s i n es s
reco rd k eep i n g p ract i ces an ds p eci fi cal l y wh atreco rd s were d es tro y ed
. Pet i t i o ner co n ten d s th ath e s h o u l db e al l o w edd edu ct io n s fo r g ift s , m eal s , en t ert ai n m en t , an d o ffi ce ex p en s es rel at ed t o h i s b us i n es s as a race m ech an i c. He cl ai m s b u s i n es s ex p en se d edu ct i o n s fo r Ch ri s t m as g i ft s t o h i s b u s i nes s as s o ci at es . He al s o s eek s t o d educto ffi ce ex p en s es i nth e fo rm o f b o o k s , m ag azi n es , an d
m u si c h e p u rch as edfo r h i s m ech an i c’ s s h o p . Accep t i n g p et i t i o ner’ s t es t i m o n y th ath i s reco rd s were d es tro y edi na wi l d fi re, we rev i ew t hi s reco rdi n th e l i g hto f t h es e p art icu l ar ci rcu m s t an ces . Wh ere reco rd s h av e b een l o s tb ecau s e o f ci rcu m s t an ces b ey o n da t ax p ay er’ s
co n tro l , h e m

u s ts t i l l u n d ert ak e a “ reas o nab l e reco n s tru ct i o n ”, wh i ch i n cl ud es
s ub s t an t i at i o n th ro u g h s eco nd ary ev i d en ce. See, e.g ., Bo y dv . Co m m i s s i o n er, 1 2 2 T.C. at3 2 0 ; Pro b an d tv . Co m m i s s i o n er, T.C. M em o . 2 0 1 6 -1 3 5 , at* 2 8 (an dcas es ci t ed thereat ). Pet i t i o ner p res en t ed4 9 p ag es o f ch eck i n g acco u nts t at em en t s wi th n o t at io n s p ro v id i n g p art ial b ut i n ad equ at e d et ai l s o nthe b u s i n es s p u rp o s e o f each ex p en s e d educt i o n cl ai m ed . Pet i t i o ner’ s t es t i m o ny was v ag u e an du ns p eci fi c as t o t h e- 1 0 -

b u s i n es s ex p en s es fo r m eal s , ev en t s , g i ft s , an dp u rch as es fo r h i s m ech an i c’ s s h o p . Pet i t io n er’ s at t em

p ts t o s p eci fi cal l y

i d en ti fy p ers o n s an d b us i n es s p u rp o s es rel at ed t o the p u rp o rt edex p en s es were n o ts u ffi ci en t . Wh i l e p et i t i o n er i d en t i fi ed i n d i v i du al s wi th wh o m

h e d i nedan dat t en d eds o ci al ev en t s, h e l at er i n d i cat edth at h i s at t em p t s at i d en t i fi cat i o n were s pecu l at i v e an dackno wl ed g edth at h i s
reco n s tru ct i o n o f ex p en s es d i dn o ts p eci fi cal l y i d en t i fy the b u s i nes s co n du ct edo n th es e o ccas i on s. Li k ewi s e, p et i t i o ner’ s recal l o f p u rch as es fro m m u s i c s t o res , b o o ks t o res , an do ther v en d o rs was o n l y g en eral , an di twas n o t cl ear wh et h er t h e
ex p en d i tu res were i n cu rredp ri m ari l y fo r b u si n es s rat h er t han p ers o nal reas o n s . Pet i t io n er ackn o wl ed g edth e d i ffi cu l ty i n as s o ci at i n g an y ex p en s e p ai d i n2 0 1 4 wi th a s p eci fi c b u s i n es s p u rp o s e. Onnu m ero u s o ccas i o n s at tri al p et it i on er i n d i cat edth ath i s n o tat i o n s co ul db e i n accu rat e b ecau s e h e was at t em p t i n g t o p i ece t o g et h er h i s p u rch as es y ears aft er ch arg es were i n cu rred
. M o reo v er, p et i t i o n er’ s ch eck i ng acco un ts t at em en t s ap p ear t o co n trad i ctth e
em ai l d et ai l i n g th e W o rl dSp eedM o t o rs p o rt s race week en d s h e p urp o rt ed t o h av e at t en ded . Pet i ti o n er i n di cat edth ath e at t en d ed5 o f th e 1 0 race week en d s l i s t edi n th e em ai l : two atTh u n derh i ll Racewayi nW i l l o ws , Cal i fo rn i a, an d t h ree at Lag un a Seca Raceway i n Sal in as , Cal i fo rn i a. Pet i t i o n er’ s ch eck i n g acco u n t
s t at em en t s ap p ear t o i n d i cat e p et i t i o n er’ s i n v ol v em en ti n o n e race week en dat- 1 1 -

Lag un a Seca Raceway
. Fo r th atweek en d , M arch 2 8 th ro u g h 3 0, 2 0 1 4 , p et i t i o n er i n cu rred$ 4 7 o f ch arg es atv en do rs n ear t h e raceway . Fo r each o f t h e o th er race week en d s p et i ti o n er’ s ch eck i n g acco u n t s tat em en t s ei th er d o n o t refl ectan y ch arg es n o t edas b us i n es s ex pen s es o r s h o w m u l t i p l e ch arg es n ear p et i t i o n er’ s h o m e an dwo rk

p l ace an dare m ark edwi th a v ari et y o f d i fferen t n o t at i o n s i n ad d it i o n t o “ W o rl d s p eed ”. Onth e b as i s o f t h i s ev id en ce i t i s n o tp o s s i b l e fo r t h e Co u rtt o as cert ai n wh i ch o f p et i t i o n er’ s m eal s an den t ert ai n m en tex p en s es h e i n cu rredwh i l e at t en di ng W o rl d Sp eedM o t o rs po rt s races . W e n o te t h atth e In t ern al Rev en u e Serv i ce al lo wed$ 10 9 i n m eal s an d
en t ert ai n m en tex p en s es as o ri g i n al l y rep ort edo n th e 2 0 1 4 Sch edu l e C. Th i s
am ou n tex ceed s the $ 4 7 i n ch arg es th atp et i t i o ner h as b een ab l e t o s p eci fi cal l y
as s o ci at e wi th a raci n g ev en t . Pet i t i o n er was u n ab l e t o p ro du ce t es t i m o ny o r o th er
ev i d en ce as t o wh et h er an y b us i n es s ex pen s es reco rd ed o nh is ch eck i n g acco u n t
s t at em en t s rel at e t o am o u nt s p rev i o u s l y rep o rt edan d al l o wed . Th erefo re, we
can n otco n cl u de t h atan y g iv ench arg e fo r m eal s o r en tert ai nm en t i s an ad d i t i o n al b u s i n es s ex p en s e rat h er o n e p rev i o u s l y rep o rt ed an dal l o wed
. Pet i t i o ner was s im i l arl y

u n ab l e t o ad equ at el y

s ub s t an t i at e t h e rep o rt edg i ft
ex p en s e. Pet i t i on er was ch arg ed$ 6 9 fo r a p u rch as e atKen d al l -J ack s o n o n Decem b er 1 7 , 2 0 14 . Pet i t i o ner o ffered o n ly v ag u e t es t i m o n y

th atthe p u rch as e- 1 2 -

was fo r g i ft s wh i ch h e b o u g h tfo r “ al l th e g u y s ” fo r Ch ri s tm as . Th i s t es t i m o n y i s i n s u ffi ci en tt o p ro v e th atth e g i ft s were rel at edt o p et i ti o ner’ s b u s i n es s o r p u rch as edfo r an y s peci fi c b u s in es s co n tact . Fi n al l y , p et i t i o n er was u n ab l e t o ad equat el y s ub s tan t i at e t he cl ai m ed d educt i o n o f $ 1 15 fo r o ffi ce ex p en s es . He at t em p t edt o s ub s t an t i at e t h e ex p en s es b y i d en t i fy i n g ch arg es i n cu rredatBarn es & No b l e an dKen W at t s M u si c as i n d i cat edo n h i s ch eck i n g acco u n ts t at em en t s . Ho wev er, p et i t io n er o ffered o n l y
v ag ue t es t i m o n y

thatthes e ch arg es were fo r m u s i c, b o ok s , an dm ag azi n es th ath e p u rch as edfo r h i s m ech an i c’ s s h o p . Pet i t i o n er d idn o t p ro v i d e an y ev id en ce o r t es t i m o ny i n d i cat i n g t h ath e h adn o tp rev i o us l y i n cl u dedth e m

u s ic, b o o k, an d
m ag azi n e ex p en ses o n Sch edul e C. Al th ou g h the Co u rt i s s ym p at h et i c t o t h e fact th atm an y o f t h e b u s i n es s
reco rd s p et i t i o n er n eed ed t o s ub s t an ti at e h i s cl ai m edd edu ct io n s were d es tro y ed , h e h as no tu nd ert ak en a d et ai l edreco n st ru ct io no f th em . Acco rd i n gl y , we h o l d th atp et i t i o n er i s n o ten t it l edt o d edu ct ad d i t i o n al g i ft , m eal s , en t ert ai n m en t , o r
o ffi ce ex pen ses fo r t ax y ear 2 0 1 4
. W e h av e co n s id eredth e p art i es ’ arg u m en t s an d , t o th e ex t en t n o tad dres s ed h erei n , we co n cl u d e t h atth ey are m o o t , i rrel ev an t , o r wi th o utm eri t .- 1 3 -

To refl ectthe fo reg o i n g , Deci s i o n wi ll b e en t eredfo r
res p o nd en t .