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an expense must be both ordinary and necessary within the meaning
of section 162(a). Deputy v. duPont, 308 U.S. 488, 495 (1940).
Deductions are a matter of legislative grace, and the
taxpayer bears the burden of proving entitlement to any
deductions claimed. New Colonial Ice Co. v. Helvering, 292 U.S.
435, 440 (1934).3 Moreover, a taxpayer is required to maintain
records sufficient to establish the amount of his or her income
and deductions. Sec. 6001; sec. 1.6001-1(a), Income Tax Regs.
Under certain circumstances where a taxpayer establishes
entitlement to a deduction but does not establish the amount of
the deduction, the Court is allowed to estimate the amount
allowable. Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930).
In the case of travel expenses, however, specifically including
meals and lodging while away from home, as well as in the case of
entertainment expenses and expenses with respect to listed
3 The Internal Revenue Service Restructuring & Reform Act
of 1998, Pub. L. 105-206, sec. 3001, 112 Stat. 726, added
sec. 7491, which, under certain circumstances, places the burden
of production on the Secretary with respect to a taxpayer’s
liability for taxes, penalties, and additions to tax in court
proceedings arising in connection with examinations commencing
after July 22, 1998. The record is unclear as to whether the
examination of petitioner's return commenced before or after July
22, 1998. Nevertheless, the burden of proof with respect to the
items of deficiency did not shift to respondent because
petitioner did not provide substantiation and credible evidence
in connection therewith. Higbee v. Commissioner, 116 T.C. 438
(2001). Moreover, respondent has satisfied the burden of
production with respect to the accuracy-related penalty under
sec. 6662(a).
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