John M. Schaefer - Page 15

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          for 1991 and 1992 by mid-April 1997, but he did not do so.                  
          Materials not provided in compliance with our pretrial orders may           
          be excluded from evidence.  Moretti v. Commissioner, 77 F.3d 637,           
          644 (2d Cir. 1996); Kodak v. Commissioner, T.C. Memo. 1991-485,             
          affd. without published opinion 14 F.3d 47 (3d Cir. 1993).  For             
          that reason we sustained respondent's objection.                            
          C.   Whether Petitioner Is Entitled to More Deductions Than                 
               Allowed by Respondent for 1991 and 1992                                
               Respondent's determinations in the notices 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); Rockwell v. Commissioner, 512 F.2d 882, 885 (9th           
          Cir. 1975), affg. T.C. Memo. 1972-133.  Deductions are a matter             
          of legislative grace; petitioner must prove that he is entitled             
          to any deductions claimed.  INDOPCO, Inc. v. Commissioner, 503              
          U.S. 79, 84 (1992).                                                         
               Petitioner deducted more Schedules C and E business expenses           
          than respondent allowed for 1991 and 1992.  Respondent disallowed           
          some of these deductions because petitioner did not substantiate            
          them or show that he had a business purpose for the expenses.               
               A taxpayer may deduct ordinary and necessary expenses paid             
          or incurred during the taxable year in carrying on a trade or               










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