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management fees consisted solely of the vouchers that Benjamin
gave to petitioner.
Petitioner reported gross receipts in the amount of $2,250
on his 1993 Schedule C as management fees, representing the
vouchers he received from Benjamin. He claimed Schedule C
expenses related to Benjamin's racing activity in the amount of
$15,467, which produced a loss of $13,217. In the statutory
notice of deficiency, respondent disallowed the claimed loss on
the ground that the expenses paid or incurred in connection with
the racing activity were for an activity not entered into for
profit under section 183.
Respondent's determinations in the statutory notice of
deficiency are presumed to be correct, and petitioner 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 petitioner bears the burden of
proving his entitlement to any 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, 440 (1934).
Petitioner claims that during 1993 he was engaged in the
business of managing his 13-year-old son's motocross racing
career.3 He and Benjamin each testified that they had an
unwritten understanding that petitioner would take care of the
3 Benjamin turned 13 years old on April 14, 1993.
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