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national of the United States unless such individual is a
resident of the United States or of a country contiguous to the
United States.”
During the taxable year in issue, petitioner’s mother was
neither a citizen or national of the United States, nor a
resident of the United States or country contiguous to the United
States. Therefore, petitioner’s mother is excluded from the
definition of “dependent” under section 152(b)(3). Unfortunately
for petitioner, she may not deduct the medical expenses she so
generously paid on behalf of her mother.
We now turn to the remaining claimed Schedule A deductions
for taxes, contributions, and miscellaneous expenses. Deductions
are strictly a matter of legislative grace. INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934). Taxpayers must substantiate
any deductions claimed. Hradesky v. Commissioner, 65 T.C. 87,
89-90 (1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976).
Taxpayers must maintain sufficient records to establish the
amount of claimed deductions. Sec. 6001; sec. 1.6001-1(a),
Income Tax Regs. Section 7491 is inapplicable because petitioner
has not complied with the requisite substantiation requirements.
Sec. 7491(a)(2)(A).
When a taxpayer fails to keep records, but a court is
convinced that deductible expenditures were made, the court
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