Robert L. Beck - Page 14

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               Deductions are strictly a matter of legislative grace;                 
          petitioners bear the burden of proving that they are entitled to            
          any deductions claimed.  INDOPCO, Inc. v. Commissioner, 503 U.S.            
          79, 84 (1992).                                                              
               Section 162(a) allows a deduction for ordinary and necessary           
          expenses paid or incurred during the taxable year in carrying on            
          a trade or business.  Taxpayers must maintain records sufficient            
          to establish the amount of their income and deductions.  Sec.               
          6001; sec. 1.6001-1(a), (e), Income Tax Regs.                               
               Dr. Beck has offered no credible evidence to establish that            
          he is entitled to deduct claimed Schedule C expenses greater than           
          the amounts that respondent has determined to be allowable.7                
          Consequently, we sustain respondent’s determinations disallowing            
          the claimed deductions.                                                     

               7 Dr. Beck claimed that his accounting records were stored             
          in a “black box” at his office and that this box was mistakenly             
          removed and disposed of by office cleaning people in February               
          1995.  Dr. Beck’s contention is not credible in light of his                
          deemed stipulations of fact.  The deemed stipulations indicate              
          that according to the office cleaning people involved in the                
          incident and the police officer who filed a report of the                   
          incident, the dimensions of the discarded box were approximately            
          9 by 12 by 4 inches.  The deemed stipulations also indicate that            
          Dr. Beck’s 1995 business and accounting records took up several             
          five-drawer filing cabinets.  In any event, Dr. Beck has not                
          attempted to substantiate his claimed deductions by                         
          reconstructing any expenditures through other credible evidence.            
          Cf. Watson v. Commissioner, T.C. Memo. 1988-29.                             

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