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Deductions are a matter of legislative grace, and 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, 440 (1934).2 Taxpayers must also substantiate the
amount and purpose of the item claimed. Hradesky v.
Commissioner, 65 T.C. 87, 89-90 (1975), affd. per curiam 540 F.2d
821 (5th Cir. 1976). Taxpayers are required to maintain records
that are sufficient to enable the Commissioner to determine their
correct tax liability. See sec. 6001; Meneguzzo v. Commissioner,
43 T.C. 824, 831-832 (1965); sec. 1.6001-1(a), Income Tax Regs.
Under certain circumstances, however, if a taxpayer establishes
the entitlement to a deduction but does not establish the amount
of the deduction, the Court may estimate the amount allowable,
Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930), if
the taxpayer provides some rational basis on which an estimate
may be made. Vanicek v. Commissioner, 85 T.C. 731, 742-743
(1985).
For deductions arising from business travel, meals,
entertainment, and use of listed property defined in section
2 This case was decided without considering the changes in
burden of proof arising out of the Internal Revenue Service
Restructuring & Reform Act of 1998 (RRA 1998), Pub. L. 105-206,
sec. 3001, 112 Stat. 685, 726-727, because those changes apply
only "to court proceedings arising in connection with
examinations commencing after the date of the enactment of this
Act." RRA of 1998 was enacted on July 22, 1998.
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