- 3 -
constituted gross income for 1991. Respondent further allowed a
home mortgage interest deduction of $15,600, thereby disallowing
$1,296 of the amount claimed by petitioner.2
The determinations of the Commissioner in a notice of
deficiency are presumed correct, and the burden is on the
taxpayer to prove that the determinations are in error. Rule
142(a); Welch v. Helvering, 290 U.S. 111 (1933). Moreover,
deductions are a matter of legislative grace, and the taxpayer
bears the burden of proving entitlement to any claimed deduction,
and that such deduction fits squarely within the ambit of the
statute providing the deduction. New Colonial Ice Co. v.
Helvering, 292 U.S. 435 (1934). 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). A taxpayer is
required to maintain records sufficient to establish the amount
of his or her income and deductions. Sec. 6001.
With respect to the State income tax refund, petitioner
claimed a deduction for State income taxes on his 1990 Federal
income tax return. During 1991, petitioner received a $1,738
refund of State income tax. Petitioner admitted receipt of such
refund; however, he failed to include this refund as income on
2 The State of Virginia reported to respondent that, in 1991,
it paid a State income tax refund of $1,738 to petitioner.
Further, Gulf States Mortgage Co., Inc. (Gulf States), reported
to respondent that petitioner had paid mortgage interest during
1991 in the amount of $15,600.
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011