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the taxable year and that the expense was ordinary and
necessary to your business, we have disallowed the
amount shown.
We are not allowing the amount on your return because
we did not get an answer to our request for information
to support your entries. You cannot claim deductions,
credits, exemptions, or other tax benefits unless you
can show that you meet all of the requirements to be
eligible for them.
Petitioners filed a timely petition in this Court.
Discussion
The Commissioner’s determinations in a notice of deficiency
are generally presumed correct, and the taxpayer bears the burden
of proving that the determinations are in error. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). Deductions are a
matter of legislative grace, and the taxpayer has the burden of
proving entitlement to any claimed deduction. Rule 142(a); New
Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934); Welch v.
Helvering, supra. This includes the burden of substantiation.
Hradesky v. Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam
540 F.2d 821 (5th Cir. 1976).
At the commencement of trial, petitioners filed a motion to
shift the burden of proof to respondent under section 7491(a),
contending that they had provided credible evidence to support
their Schedule C deductions for the year at issue as required by
section 7491(a)(2). Respondent objected to petitioners’ motion.
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