A. Muhsin and B. Jackson Muhsin - Page 5




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          reported gross receipts from this activity in the amount of                 
          $3,121 and expenses of $7,923.  Petitioners also reported wages             
          of $30,322 and total itemized deductions of $13,734.  With                  
          respect to the itemized deductions, respondent disallowed $4,211            
          of claimed charitable contribution deductions and $8,173 of                 
          miscellaneous itemized deductions.  The above adjustments, which            
          caused an increase in the taxable income, resulted in a                     
          computational adjustment reducing the earned income credit to               
          zero.                                                                       
          Discussion                                                                  
               Petitioners, despite having been admonished by the Court,              
          did not present any evidence (documents or testimony) to support            
          entitlement to the claimed deductions.  As we have stated on many           
          occasions, deductions are a matter of legislative grace, and a              
          taxpayer bears the burden of proving that he is entitled to any             
          deductions claimed.  See INDOPCO, Inc. v. Commissioner, 503 U.S.            
          79, 84 (1992).  To the extent that petitioner suggests that the             
          IRS does not have the power to examine tax returns or that this             
          Court does not have jurisdiction, we see no need to refute such             
          arguments which have no colorable merit.  See Crain v.                      
          Commissioner, 737 F.2d 1417 (5th Cir. 1984).  The Court of                  
          Appeals for the Third Circuit indicated approval of Crain v.                
          Commissioner in Sauers v. Commissioner, 771 F.2d 64, 67 (3d Cir.            
          1985), affg. T.C. Memo. 1984-367; see also Matthews v.                      





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