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111, 115 (1933). With respect to the deductions claimed in
Schedule C of the unfiled Form 1040 for 1996, deductions are
strictly a matter of legislative grace, and petitioners bear the
burden of proving that they are entitled to any deductions
claimed. INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992).
We turn first to the contention of Mr. Dimon that the
$127,970 that he received during 1996 represented proceeds from
the sale of a business, and not nonemployee compensation. On the
record before us, we reject that contention. Mr. Dimon is deemed
to have admitted pursuant to Rule 90(c) that the $127,970 that he
received during 1996 was nonemployee compensation. In addition,
Schedule C of the unfiled Form 1040 for 1996 that petitioners
provided to respondent on January 10, 2002, showed that Mr. Dimon
received during 1996 $127,970 in gross receipts from his Schedule
C business. We are unwilling to accept Mr. Dimon’s general,
conclusory, and uncorroborated testimony at trial that those
admissions are wrong. On the record before us, we find that Mr.
Dimon has failed to satisfy his burden of showing that the
$127,970 that he received during 1996 represented proceeds from
the sale of a business, and not nonemployee compensation.5
5In the respective notices issued to Ms. Dimon and Mr.
Dimon, respondent increased Mr. Dimon’s nonemployee compensation
in the amount of $127,970 and increased Ms. Dimon’s income for
that year by one half of that amount, which respondent determined
to be community income. Similarly, in those respective notices,
respondent included in Ms. Dimon’s income for 1996 the full
(continued...)
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