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Zakihhah Saeed. Respondent issued a notice of deficiency
determining that petitioner was not entitled to deductions for
dependency exemptions, head of household filing status, and
earned income credit because she failed to provide substantiation
for her claims.
The first issue we address is whether petitioner is entitled
to deductions for dependency exemptions. Deductions are strictly
a matter of legislative grace, and taxpayers must satisfy the
specific requirements for any deduction claimed. See INDOPCO,
Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice
Co. v. Helvering, 292 U.S. 435, 440 (1934). Taxpayers are
required to maintain records sufficient to substantiate their
claimed deductions. See sec. 6001; sec. 1.6001-1(a), Income Tax
Regs.
Taxpayers generally bear the burden of proving that the
Commissioner’s determination is incorrect. Rule 142(a); Welch v.
Helvering, 290 U.S. 111 (1933). Under section 7491(a)(1),
however, the burden of proof shifts to the Commissioner if, among
other requirements, the taxpayer introduces “credible evidence
with respect to any factual issue relevant to ascertaining” his
tax liability. We find that the burden of proof does not shift
to respondent because petitioner has failed to comply with the
requirements of section 7491(a)(1).
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