UNITED STATES COURT OF APPEALS

                      FOR THE FIFTH CIRCUIT


                        __________________

                           No. 96-60470
                         Summary Calendar
                        __________________



     SALVADOR CHAVARRIA; IRENE CHAVARRIA, deceased,

                                         Petitioners-Appellants,

                              versus

     COMMISSIONER OF INTERNAL REVENUE,

                                         Respondent-Appellee.

         ______________________________________________

                 Appeal from the Decision of the
                     United States Tax Court
                            (3833-95)
         ______________________________________________
                           May 1, 1997

Before HIGGINBOTHAM, WIENER, and BENAVIDES, Circuit Judges.

PER CURIAM:*

     The taxpayer, Salvador Chavarria, appeals the tax court's

determination that he failed to meet his burden of proving the cost

of goods sold in connection with his used car business in Mexico

for the years 1990, 1991, and 1992.1     Chavarria owned a used car


*
 Pursuant to Local Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in Local Rule 47.5.4.
1
   The estate of Chavarria's late wife is also a party to this
appeal.
dealership in Juarez, Mexico, called Autos-Oti (Autos Oti-Juarez).

He also was a sixty percent shareholder in a Texas corporation that

operated a used car dealership in El Paso, known as Autos Oti, Inc.

(Autos Oti-Texas).

      Chavarria filed Mexican income tax returns for 1990, 1991, and

1992 that reported gross receipts, cost of goods sold, and expenses

for Autos Oti-Juarez. Those returns were prepared by an accountant

in Mexico named Francisco Javier Bencomo.     Chavarria, a resident

alien, did not, however, report any income or gross receipts from

Autos Oti-Juarez on his United States income tax returns for 1990,

1991, and 1992.

      The Internal Revenue Service (IRS) audited Chavarria and,

based on the gross receipts reported on his Mexican income tax

returns for Autos Oti-Juarez, assessed deficiencies in federal

income taxes of $7,875, $6,229, and $16,198, for the years 1990,

1991, and 1992.      The IRS also assessed penalties for the late

filing of two returns.2     Chavarria petitioned the tax court to

redetermine the deficiencies asserted by the IRS.    After a trial,

the tax court held that Chavarria failed to sustain his burden of

proving the cost of the cars sold at Autos Oti-Juarez.    The court

did estimate the amount of expenses incurred in preparing the cars

for sale and allowed deductions to that extent.      The tax court

"estimate[d] these expenses as $400 for 1990, $1,100 for 1991, and

$2,500 for 1992." The court further held that Chavarria was liable


2
    The penalties are not contested on appeal.

                                 2
for the penalties for late filing of returns.

     Chavarria now challenges only the tax court's holding that he

failed to prove the cost of the cars sold.        Agreeing with the tax

court, we affirm.3

     Chavarria, as the taxpayer, bears the burden of proving that

he was entitled to the claimed amount of cost of goods sold.

Portillo v. C.I.R., 

, 1134 (5th Cir. 1991).         We review

a tax court's determination that a taxpayer has failed to produce

sufficient evidence to support the amount of cost of goods sold for

clear error.     

Chavarria introduced his Mexican

income   tax   returns   to   demonstrate   the   cost   of   goods   sold.

Chavarria testified that his accountant in Mexico prepared his tax

returns for Autos-Oti Juarez.       He further testified that he gave

the accountant the receipts documenting the cost of goods sold and

that, although he requested that the documents be returned, the

accountant never complied with his request.         Upon questioning by

the tax court, Chavarria was unable to even approximate the amount

of vehicles he sold at the Juarez dealership in 1990, 1991, or

1992.

     The IRS agent who audited Chavarria testified that automobiles

that had been purchased in the United States by Autos Oti-Texas

were transferred from the Texas dealership to the inventory of


3
   For the first time on appeal, Chavarria argues that the notice
of deficiency was invalid and arbitrary and capricious. Chavarria
has not shown that the notice of deficiency was invalid or
arbitrary and capricious, 

; much less
plain error.

                                    3
Autos Oti-Juarez and that these transfers were not recorded in the

ledgers of Autos Oti-Texas.4

     The tax court found that Chavarria "offered nothing other than

the amounts . . . claimed on their Mexican returns."     The court

also expressly took into consideration the IRS agent's testimony

that some of the automobiles purchased in the United States were

driven to Mexico and Chavarria's inability to approximate how many

cars were sold at his Mexican business during the years at issue.

After considering the trial record, we conclude that the tax

court's determination that Chavarria failed to come forward with

sufficient evidence of his claimed amount of cost of goods sold is

not clearly erroneous.

       AFFIRMED.




4
  Specifically, the agent testified that the "[t]axpayer said that
he drove some vehicles purchased in the United States, some of the
salesman would drive the autos across a bridge to the business in
Mexico. And those vehicles were charged against the outstanding
debts to Autos in Juarez and also to the debt [of] the
shareholder."

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