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later, respondent presented such evidence at the trial on remand,
but the estate declined to do so.
As a general rule, the Commissioner’s determination bears a
presumption of correctness, and the burden of proof rests with
the taxpayer. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
(1933); Time Ins. Co. v. Commissioner, 86 T.C. 298, 313-314
(1986); cf. sec. 7491 (generally effective with respect to
examinations commencing after July 22, 1998). In the notice of
deficiency, respondent determined that the estate’s deduction for
Exxon’s claim against the estate was allowable in the amount of
$681,840, rather than $2,482,719, because “it has not been
established that any greater amount is deductible under the
provisions of the Internal Revenue Code.”
Deductions are a matter of legislative grace, and the
taxpayer bears the burden of proving the entitlement to any
deduction claimed. INDOPCO, Inc. v. Commissioner, 503 U.S. 79,
84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440
(1934). This burden includes establishing the amount of the
deduction claimed. Time Ins. Co. v. Commissioner, supra at 314;
Nichols v. Commissioner, 43 T.C. 135, 143 (1964) (citing Burnet
v. Houston, 283 U.S. 223 (1931)). In Sealy Power, Ltd. v.
Commissioner, 46 F.3d 382, 387 (5th Cir. 1995), affg. in part,
revg. in part, and remanding in part T.C. Memo. 1992-168, the
Court of Appeals for the Fifth Circuit held:
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