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action against the owner of the garage but recovered nothing; and
that no part of his loss was covered by insurance or was
otherwise reimbursable.
Discussion
We begin with two fundamental principles that serve to guide
the decisional process.
First, deductions are a matter of legislative grace, and the
taxpayer bears the burden of proving that he or she is entitled
to any deduction claimed. Rule 142(a); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); Deputy v. duPont, 308 U.S.
488, 493 (1940); New Colonial Ice Co. v. Helvering, 292 U.S. 435,
440 (1934); Welch v. Helvering, 290 U.S. 111, 115 (1933); cf.
sec. 7491(a) (applicable generally to court proceedings arising
in connection with examinations commencing after July 22, 1998).
Second, the fact that a taxpayer reports a deduction on the
taxpayer’s income tax return is not sufficient to substantiate
the deduction claimed on the return. Wilkinson v. Commissioner,
71 T.C. 633, 639 (1979); Roberts v. Commissioner, 62 T.C. 834,
837 (1974). A tax return is merely a statement of the taxpayer’s
claim; the return is not presumed to be correct. Wilkinson v.
Commissioner, supra at 639; Roberts v. Commissioner, supra at
837; see also Seaboard Commercial Corp. v. Commissioner, 28 T.C.
1034, 1051 (1957) (a taxpayer's income tax return is a
self-serving declaration that may not be accepted as proof for
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