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home. Ms. Evans knew where the records were kept, and she had
access to these records. Ms. Evans could have examined any of
the Evanses' financial records if and when she desired. She
chose not to review any of the Evanses' financial records.
OPINION
Petitioners must prove respondent's determinations wrong.
Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Petitioners also must prove their entitlement to any deduction.
Deductions are a matter of legislative grace, and petitioners
must keep sufficient records to substantiate any deduction that
would otherwise be allowed by the Code. Sec. 6001; New Colonial
Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
1. Reported Deductions
Respondent determined that petitioners' deductions of
$67,321, $85,604, and $81,096 for 1989 through 1991,
respectively, were improper because petitioners had failed to
prove: (1) The Evanses had not received the royalties, (2) the
Evanses were not the owners of the royalties, and (3) the
royalties were reported by the estate as claimed. Petitioners
argue that the royalties belonged to the estate. Petitioners
assert that Mr. Osherow loaned the royalty proceeds to Mr. Evans,
and that Mr. Evans later repaid these loans. Petitioners assert
that Mr. Osherow did not recognize that Mr. Evans considered the
royalties to belong to the estate.
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