- 9 - alleged in the petition are true, petitioner has failed to state a claim upon which he is entitled to relief. In general, the determinations made by the Commissioner in a notice of deficiency are presumed to be correct, and the taxpayer bears the burden of proving that those determinations are erroneous. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Deductions and credits are a matter of legislative grace, and taxpayers bear the burden of proving entitlement to any deduction or credit claimed on their returns. See INDOPCO, Inc. v. Commissioner, 503 U.S. 79 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). Section 32 provides a refundable tax credit for certain eligible taxpayers. Section 32(c)(2)(A) defines the term “earned income” broadly to include wages, salaries, tips, other employee compensation, and the taxpayer’s earnings from self-employment. However, section 32(c)(2)(B) excludes certain items from the definition of earned income. The dispute in this case centers on section 32(c)(2)(B)(iv), which provides in pertinent part: SEC. 32(c). Definitions and special rules.–-For purposes of this section-- (2) Earned income. * * * * * * * (B) For purposes of subparagraph (A)-- * * * * * * *Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011