Charles Edward Shepherd - Page 3

               Petitioner must prove that respondent's determination set              
          forth in the notice of deficiency is incorrect1.  Rule 142(a);              
          Welch v. Helvering, 290 U.S. 111, 115 (1933).  Petitioner must              
          also prove his entitlement to any claimed deduction.  Deductions            
          are strictly a matter of legislative grace, and petitioner must             
          show that his claimed deductions are allowed by the Code.  New              
          Colonial Ice Co. v. Helvering, 292 U.S. 435 (1934).                         
               The only documentary evidence on the record tending to                 
          establish petitioner's entitlement to itemized deductions                   
          consists of receipts for medical and dental expenses amounting to           
          $2,906.  In his testimony, petitioner alluded to the existence of           
          additional documentation and additional allowable expenses.                 
          However he never presented any such documentation to the Court.             
          Based on petitioner's somewhat confused and self-contradictory              
          testimony, we are unable to conclude that he is entitled to                 
          itemized deductions beyond those reflected in the stipulation of            
          facts.  Those amounts are less than the allowable standard                  
          deduction for the year at issue.  Respondent's determination that           

               1 The examination of petitioner's return began before                  
          July 23, 1998.  Therefore sec. 7491, which was added to the Code            
          by the Internal Revenue Service Restructuring and Reform Act of             
          1998, Pub. L. 105-206, sec. 3001(a), 112 Stat. 685, 726, and                
          which shifts the burden of proof to respondent in certain                   
          circumstances, does not apply to this matter.                               

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