Carl J.D. Bauman and Margaret A. Bauman - Page 27

                                       - 27 -                                         
          precluded from taking such deductions because they have failed to           
          substantiate their entitlement to them.  We agree with                      
          respondent.                                                                 
               Deductions are a matter of legislative grace, and                      
          petitioners bear the burden of proving that they are entitled to            
          the deductions claimed.  Rule 142(a); New Colonial Ice Co. v.               
          Helvering, 292 U.S. 435, 440 (1934); Welch v. Helvering, 290 U.S.           
          at 115.                                                                     
               Petitioners argue that, because respondent had possession of           
          25 boxes of ERL’s records for a substantial period of time prior            
          to trial, it is incumbent upon respondent to come forward with              
          evidence establishing that the claimed deductions were not in               
          fact paid or incurred by ERL.  We reject such a contention and              
          decline to shift the burden of proof to respondent.  On brief,              
          petitioners claim entitlement to various expenses, but the                  
          exhibits and self-serving testimony on which they rely fail to              
          substantiate that the alleged expenses were in fact paid or                 
          incurred.  Consequently, respondent is sustained on this ssue.              
          Issue 6.  Section 6653(a) and Section 6653(a)(1) and (2)                    
               Respondent determined that petitioners are liable for an               
          addition to tax under section 6653(a) for 1980 and additions to             
          tax under section 6653(a)(1) and (2) for 1981 and 1982.                     
          Petitioners bear the burden of proof in establishing that they              
          are not liable for such additions to tax.  Rule 142(a).  Section            
          6653(a) for 1980 and section 6653(a)(1) for 1981 and 1982 provide           




Page:  Previous  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  Next

Last modified: May 25, 2011