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the taxpayer to show that the determinations are incorrect. See
Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84
(1992); Welch v. Helvering, 290 U.S. 111, 115 (1933).7
A. Petitioner’s Schedule C Deductions
We begin with several fundamental principles that serve to
guide the decisional process.
First, deductions are a matter of legislative grace. Deputy
v. duPont, 308 U.S. 488, 493 (1940); New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934).
Second, a taxpayer bears the burden of proving that the
taxpayer is entitled to any deduction claimed. Rule 142(a);
INDOPCO, Inc. v. Commissioner, supra; Welch v. Helvering, supra.
Third, a taxpayer is required to maintain records sufficient
to substantiate deductions claimed by the taxpayer on his or her
return. Sec. 6001; sec. 1.6001-1(a), (e), Income Tax Regs.
Fourth, the fact that a taxpayer reports a deduction on the
taxpayer’s income tax return is not sufficient to substantiate
the deduction claimed on the return. Wilkinson v. Commissioner,
71 T.C. 633, 639 (1979); Roberts v. Commissioner, 62 T.C. 834,
837 (1974). Rather, a tax return is merely a statement of the
taxpayer’s claim; the return is not presumed to be correct.
7 Sec. 7491 does not apply in this case to shift the burden
of proof to respondent because petitioner neither alleged that
sec. 7491 was applicable nor established that she fully complied
with the requirements of sec. 7491(a)(2) with respect to any of
the issues before the Court.
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