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the origins of the amounts claimed. In general, petitioner's
testimony focused on disputing Ms. Parsons' characterization of
the Corporate card and the Gold card charges. Other than the
claimed deductions related to the motor homes, petitioners have
offered no persuasive evidence in the record to account for the
amounts claimed on their 1994 return.
Respondent's determinations in the statutory notice of
deficiency are presumed to be correct, and petitioners bear the
burden of proving otherwise. Rule 142(a); Welch v. Helvering,
290 U.S. 111, 115 (1933). Moreover, deductions are strictly a
matter of legislative grace, and petitioners bear the burden of
proving their entitlement to any 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).
Section 162(a) allows a deduction for the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on a trade or business, including the trade or business
of being an employee. Commissioner v. Flowers, 326 U.S. 465
(1946). Taxpayers are required to substantiate amounts claimed
as deductions by maintaining the records needed to establish
entitlement to the deductions claimed. Sec. 6001; sec. 1.6001-
1(a), Income Tax Regs.
Disputed Credit Card Charges
Petitioners argue that the disputed credit card charges are
Tracstar's business expenses. The disputed charges highlighted
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Last modified: May 25, 2011