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for research or experimentation undertaken directly by him but
also to expenditures paid or incurred for research or
experimentation carried on in his behalf by another person or
organization".
Deductions are a matter of legislative grace, and the
taxpayer has the burden of demonstrating that he is entitled to a
deduction. New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440
(1934). The burden of proof remains on the taxpayer even when
the case is submitted fully stipulated. Borchers v.
Commissioner, 95 T.C. 82, 91 (1990), affd. 943 F.2d 22 (8th Cir.
1991). Petitioners have adequately substantiated that they paid
$50,000 to RCC in 1992. To be entitled to the deduction,
however, they must demonstrate that the amount was actually spent
for research or experimentation conducted by them or on their
behalf in connection with their trade or business. See Grindle
v. Commissioner, T.C. Memo. 1993-297.
Petitioners' evidence consists of two documents. First, on
the Schedule C of their 1992 Federal income tax return, they list
RCC as petitioner's business. They describe its function as
"Manufacturing Recyclable containers" and indicate that
petitioner "materially participated". Plainly, petitioners'
Schedule C is self-serving, and hardly represents convincing
evidence on their behalf.
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