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deductions are a matter of legislative grace, and the taxpayer
bears the burden of proving that he or she is entitled to any
deduction claimed. Rule 142(a); INDOPCO, Inc. v. Commissioner,
503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292
U.S. 435, 440 (1934); Welch v. Helvering, supra. Section 6001
requires the taxpayer to keep records sufficient to show whether
or not the person is liable for tax. Where a taxpayer fails to
produce any records to substantiate his or her deductions,
disallowance of the claimed deductions is proper. Williams v.
Commissioner, T.C. Memo. 1986-195.
According to petitioner, the farming activity was a cash
operation. He testified that suppliers and laborers demanded to
be paid in cash. He claims that he was paid in cash for the sale
of crops and paid many, if not most, of the expenses claimed on
the Schedules F in cash. Petitioner did not maintain a checking
account for the farming activity. Although petitioner had a
personal account, he claims that he never deposited any of the
cash income he received from the farm into his personal account,
but rather used the cash to pay the farming expenses he allegedly
incurred. Petitioner produced absolutely no records to support
any claimed deductions. Petitioner testified that he kept
records of his farming expenditures but that such records were
now in the possession of his accountant. Petitioner presented no
bills, receipts, canceled checks, or other records to verify any
of his farming expenditures. Petitioner's testimony with respect
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