Sheila Mae Howard - Page 9

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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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