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deliveries and claimed deductions for car expense of $1,728 and
for utilities expense of $372.
In the notice of deficiency, respondent disallowed
petitioners' claimed dependency exemption deductions in 1993 and
1994 with respect to petitioner's mother and sister. With
respect to the tax year 1993, respondent also disallowed a
portion of petitioners' deductions for car expense in the amount
of $994 and for phone expense in the amount of $293. Respondent
disallowed a portion of petitioners' claimed Schedule C
deductions in the amount of $576 for 1994. From the record, it
appears that this entire disallowance was attributable to the
claimed car expense. Respondent determined self-employment tax
in each of the years as a computational result of the adjustments
to petitioners' Schedule C deductions. Respondent allowed
petitioners a deduction with respect to this tax for each of the
years in issue.
Respondent's determinations are presumed correct, and
petitioners have the burden of proving them erroneous. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Deductions
are a matter of legislative grace, and petitioners must prove
entitlement to any deductions claimed. New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934). Taxpayers must maintain
adequate records to establish the amount of any deductions
claimed. Sec. 6001; sec. 1.6001-1(a), Income Tax Regs.
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