Eugene C. Joseph, Sr. - Page 4

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                  We begin by noting that, as a general rule, the                                     
            Commissioner's determinations are presumed correct, and the                               
            taxpayer bears the burden of proving otherwise.  Rule 142(a);                             
            Welch v. Helvering, 290 U.S. 111, 115 (1933).  Moreover,                                  
            deductions are strictly a matter of legislative grace, and the                            
            taxpayer has the burden of establishing entitlement to any                                
            deduction claimed on the return.  Deputy v. du Pont, 308 U.S.                             
            488, 493 (1940); New Colonial Ice Co. v. Helvering, 292 U.S. 435,                         
            440 (1934).                                                                               
                  The taxpayer's burden of establishing his entitlement to a                          
            deduction includes the burden of substantiation.  Hradesky v.                             
            Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam 540 F.2d                            
            821 (5th Cir. 1976).  The Court is not bound to accept                                    
            unverified, undocumented testimony of the taxpayer.  Id.                                  
            Accordingly, section 6001 and the regulations promulgated                                 
            thereunder require the taxpayer to maintain records sufficient to                         
            enable the Commissioner to determine the taxpayer's correct tax                           
            liability.  Meneguzzo v. Commissioner, 43 T.C. 824, 831-832                               
            (1965); sec. 1.6001-1(a), Income Tax Regs.                                                
                  As a general rule, the mere fact that a taxpayer cannot                             
            prove the precise amount of an otherwise deductible item is                               
            ordinarily not fatal because we may, if the trial record provides                         
            sufficient evidence, estimate the amount of the deductible                                
            expenses incurred.  Cohan v. Commissioner, 39 F.2d 540 (2d Cir.                           

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