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petitioners’ Schedule C gross receipts for each of the years at
issue.
Claimed Schedule C Deductions
Respondent disallowed petitioners’ claimed Schedule C car
and truck expenses for 1993, 1994, and 1995 in the amounts of
$11,550, $9,352, and $16,875, respectively.9
Deductions are strictly a matter of legislative grace, and
petitioners bear the burden of proving that they are entitled to
any deductions claimed. See 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
any trade or business. Section 274(d)(4) operates to disallow
any deduction otherwise allowable under, inter alia, section
162(a) with respect to, inter alia, any “listed property”, unless
the taxpayer satisfies the substantiation requirements of that
section.10 “Listed property” is defined in section 280F(d)(4) to
9Respondent did not disallow the remaining claimed Schedule
C car and truck expenses for 1993, 1994, and 1995 in the amounts
of $5,250, $5,438, and $5,625, respectively.
10Sec. 274(d) provides in pertinent part:
SEC. 274. DISALLOWANCE OF CERTAIN ENTERTAINMENT, ETC.,
EXPENSES.
(d) Substantiation Required.–-No deduction or credit
shall be allowed--
(continued...)
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