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tax liability. See sec. 6001; Meneguzzo v. Commissioner, 43 T.C.
824, 831 (1965). In the absence of persuasive corroborating
evidence, we are not required to accept the self-serving
testimony of interested parties. See Bose Corp. v. Consumers
Union of U.S., Inc., 466 U.S. 485, 512 (1984); Day v.
Commissioner, 975 F.2d 534, 538 (8th Cir. 1992), affg. in part,
revg. in part and remanding T.C. Memo. 1991-140; Tokarski v.
Commissioner, 87 T.C. 74, 77 (1986).
With those well-established propositions in mind, we must
determine whether petitioners have satisfied their burden of
proving that they did not receive the disputed income items and
that they are entitled to the disputed deductions.
Wages, IRA Deductions, and Medical Plan Expenses
Petitioner claimed wage expenses and medical plan expenses
on his Schedules C for the years in issue relating to payments
made to or on behalf of Mrs. Haeder allegedly in her capacity as
his employee. Mrs. Haeder reported the salary petitioner paid to
her as income from wages on petitioners’ joint tax returns for
those years and claimed deductions for contributions to an IRA
for the years in issue. Respondent disallowed the deductions for
wage expenses, IRA contributions, and medical plan expenses.
Respondent correspondingly reduced petitioners’ income from
wages.
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