21- -
applications for automatic extensions of time to file
are null and void. The total tax liabilities shown on
the forms were not reasonable estimates of your correct
liabilities. Consequently, 20 percent of the tax is
added as provided by section 6651(a)(1) of the Internal
Revenue Code.
Accuracy-Related Penalties
In respondent's notice of deficiency, it was determined that
all underpayments of tax for the taxable years 1990 and 1991 were
due to negligence or disregard of rules or regulations, and that
petitioners had not shown that the underpayments were due to
reasonable cause.
OPINION
Most of the issues in this case are factual and involve
deductions claimed by petitioners. The burden of proof is on
petitioners, and respondent's determinations of the income tax
deficiencies, additions to tax, and accuracy-related penalties
are presumptively correct. Rule 142(a); Welch v. Helvering, 290
U.S. 111 (1933). Deductions are a matter of legislative grace,
and petitioners bear the burden of proving entitlement to any
claimed deductions. Rule 142(a); INDOPCO, Inc. v. Commissioner,
503 U.S. 79, 84 (1992).
I. Issues 1 Through 6. Claimed Casualty Loss Deductions
Section 165(a)3 allows as a deduction any loss sustained during
3SEC. 165. LOSSES.
(a) General Rule.--There shall be allowed as a
deduction any loss sustained during the taxable year
and not compensated for by insurance or otherwise.
(continued...)
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