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The Notice of Deficiency
Following an examination of petitioners' 1993 return,
respondent issued a notice of deficiency disallowing all of the
deduction for unreimbursed employee business expenses and all but
$1,3004 of the deduction claimed for charitable contributions due
to lack of substantiation. Respondent also determined that
petitioners were liable for the accuracy-related penalty
authorized by section 6662.
OPINION
Deductions are a matter of legislative grace, and the
taxpayer bears the burden of proving that he or she is entitled
to the claimed deductions. See 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); Welch v. Helvering, 290 U.S.
111, 115 (1933). With this well-established proposition in mind,
we must determine whether petitioners have satisfied their burden
of proving that they are entitled to deductions for unreimbursed
employee business expenses and charitable contributions in excess
of the amount allowed by respondent.
4The parties stipulated that petitioners were entitled to a
charitable contribution in the amount of $750 (30 donations of
$25 each) to Calvary Chapel. According to respondent's
Memorandum of Law, that amount was included in respondent's
calculation of the $1,300 charitable contribution deduction
allowed for 1993 in the notice of deficiency.
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