- 4 -
Respondent conceded that, while most of the material in
petitioner’s amended petition was irrelevant, the following three
sentences could be construed as stating a claim upon which relief
could be granted:
On December 15, 2005, or thereabout Barnes had received
a second Notice of Tax Deficiency from the IRS. It
disputed Barnes Tax Filings for Tax Year 2002.
* * * * * * *
All documents, receipts, and related paperwork deemed
necessary to substantiate reasonable deductions taken
by Mr. Edwards [petitioner’s tax return preparer] on
Barnes’ taxes had been provided to Joe Edwards.
After the hearing, the Court denied respondent’s motion and
struck all but the above three sentences from petitioner’s
amended petition. This case was tried in Washington, D.C., on
March 26, 2007.
OPINION
Section 161 provides for itemized deductions in computing
taxable income. However, deductions are a matter of legislative
grace, and a taxpayer bears the burden of proving that she is
entitled to the deductions.3 See INDOPCO Inc. v. Commissioner,
503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292
3 Under sec. 7491(a)(1), if the taxpayer introduces
credible evidence with respect to any factual issue relevant to
the taxpayer’s liability for tax, the burden of proof shall shift
to the Commissioner. The burden of proof does not shift to
respondent because petitioner did not maintain adequate records.
See sec. 7491(a)(2).
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Last modified: November 10, 2007