- 8 - Memo. 2003-38 (Beery II). At issue in Beery II was the propriety of respondent’s decision to proceed with the collection of Federal income taxes and penalties for the taxable year 1994. This Court issued an opinion in Beery II on February 20, 2003, in which the Court upheld the validity of Beery I, holding that the 1975 NOL carryforward expired on December 31, 1980, and that this Court was not required to take any further action to enforce Beery I when the U.S. District Court issued its order lifting the bankruptcy stay. See id. Therefore, we find no merit in petitioners’ argument that Beery I is invalid because this Court entered the decision while the automatic stay provisions of the Bankruptcy Code were in effect. We also note that Mr. Beery made no effort at trial to prove the existence or amount of the 1975 NOL carryforward that he alleged was available to petitioners to deduct on their 1998 and 1999 returns. Deductions are a matter of legislative grace, and the taxpayer bears the burden of proving his entitlement to the deduction he claimed.7 Rule 142(a); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934); Welch v. Helvering, 290 U.S. 7Where the taxpayer produces credible evidence with respect to any factual issue relevant to ascertaining the tax liability of the taxpayer, the burden of proof shifts to the Secretary, but only if the taxpayer has complied with substantiation requirements, maintained all required records, and has cooperated with reasonable requests by the Secretary for witnesses, information, documents, meetings, and interviews. Sec. 7491(a). Petitioners do not contend that sec. 7491(a) applies to this case.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
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