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It appears to us that the computation of tax in the notice of
deficiency incorrectly adds the Schedule C gross receipts to the
total adjustments for both years. Respondent disallowed the
total Schedule C expenses for both years and then added the
Schedule C gross income to petitioners’ taxable income and
subtracted the same amounts as miscellaneous deductions on
Schedule A. The taxable income for 1995 and 1996 appears to be
overstated by $10,530 and $11,580, respectively. This can be
corrected in the Rule 155 computation.
2. Medical and Mortgage Interest Expenses
With regard to the disallowance of the deduction for medical
expenses for 1996, petitioners have the burden of establishing
that respondent’s determination is erroneous. Rule 142(a).
Section 7491 does not affect the burden of proof where the
taxpayer has not substantiated deductions. Higbee v.
Commissioner, 116 T.C. 438, 440-441 (2001). The deduction was
disallowed because petitioners had not substantiated the
expenditure. Petitioners presented no evidence from which the
Court could conclude that respondent’s determination was
erroneous, and we affirm that determination.
The determination with respect to the 1995 mortgage interest
is different. Petitioners claimed deductions of $6,764 for 1995
and $7,883 for 1996. Petitioners apparently substantiated the
1996 amount, but could substantiate only $4,101 of the 1995
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