-10-
Deductions are a matter of legislative grace, and in general
taxpayers bear the burden of proving that they are entitled to the
deductions claimed. Rule 142(a); INDOPCO, Inc. v. Commissioner,
503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S.
435 (1934). Taxpayers must keep sufficient records to establish
the amount of their deductions. See sec. 6001; Meneguzzo v.
Commissioner, 43 T.C. 824, 831-832 (1965); sec. 1.6001-1(a), Income
Tax Regs. Moreover, a taxpayer who claims a deduction bears the
burden of substantiating the amount and purpose of the item
claimed. Hradesky v. Commissioner, 65 T.C. 87, 90 (1975), affd.
per curiam 540 F.2d 821 (5th Cir. 1976); sec. 1.6001-1(a), Income
Tax Regs.
Because petitioner failed to substantiate his purported travel
costs, we sustain respondent's disallowance of the $7,220 in
question. Moreover, insofar as the purported travel expenses
represent startup business costs, they would not be deductible in
1992 because petitioner's export business did not begin operations
until 1993. See sec. 195; Garrett v. Commissioner, T.C. Memo.
1997-231.
C. Insurance Expenses
Respondent disallowed the claimed insurance expenses on the
basis that petitioner failed to substantiate the business purpose
of the deduction. Petitioner claims the insurance expenses related
to his automobile insurance; respondent, on the other hand, asserts
petitioner told Revenue Agent Bank that the insurance was for his
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