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7491(a). Accordingly, we conclude that pursuant to section
7491(a) the burden of proof does not shift to respondent.
II. Remaining Schedule C Expenses
Deductions are a matter of legislative grace, and
petitioners have the burden of showing that they are entitled to
any deduction claimed. See Rule 142(a); New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934). Petitioners presented no
evidence regarding the minimart’s expenses for 1995, 1996, 1997,
or 1998 that were not stipulated or conceded by respondent.
Accordingly, we sustain respondent’s determination regarding
these amounts.
III. Gross Receipts
Petitioners argue that the amounts of gross receipts listed
on their 1995, 1996, 1997, and 1998 returns overstated their
actual gross receipts because the amounts listed erroneously
included loans2 made to John Biazar (petitioner) that he
deposited into the minimart’s bank accounts.
Petitioner testified that he received the alleged loans as
checks and repaid the alleged loans via check. Other witnesses
testified that they provided petitioner cash, and he provided
them cash, not checks.
2 We use the term “loan” for convenience only. We make no
finding that the amounts third parties provided petitioner were
in fact loans. We note that one witness testified that no
interest was charged on the alleged loans, and no loan agreements
were ever executed.
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