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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
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