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OPINION
The Commissioner's determinations in a notice of deficiency
are presumed correct, and the taxpayer bears the burden of
proving that those determinations are erroneous. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). Moreover,
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); New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934); Welch v. Helvering, supra at
115. 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). In addition, section 6001 requires the
taxpayer to keep records sufficient to show whether or not the
person is liable for tax.
Charter Boat Service
In general, section 162(a) allows a deduction for all
ordinary and necessary expenses paid or incurred during the
taxable year in carrying on a trade or business. The term "trade
or business" is not precisely defined in the Internal Revenue
Code or the regulations promulgated thereunder.7 According to
the Supreme Court, in order for an activity to be considered a
7Some sections do define the term for specific purposes.
For example, sec. 7701(a)(26) provides as follows: "The term
'trade or business' includes the performance of the functions of
a public office."
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