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Petitioner never commenced operation of the newsstand. On
his "amended return", petitioner reported a net loss of $11,900
for the business.
Discussion
A. Burden of Proof
The Commissioner's determinations are presumed correct, and
generally, taxpayers bear the burden of proving otherwise. Welch
v. Helvering, 290 U.S. 111, 115 (1933). Moreover, deductions are
a matter of legislative grace, and taxpayers bear the burden of
proving that they are entitled to any deduction claimed. New
Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934); Welch v.
Helvering, supra at 115. This includes the burden of
substantiation. Hradesky v. Commissioner, 65 T.C. 87, 90 (1975),
affd. per curiam 540 F.2d 821 (5th Cir. 1976).
The burden of proof may shift to the Commissioner under
section 7491(a). Because petitioner failed to comply with the
requirements of section 7491(a)(2), however, section 7491 is
inapplicable.
B. Petitioner's Income
Pursuant to section 61(a), gross income includes "all income
from whatever source derived" unless excludable by a specific
provision of the Internal Revenue Code. Petitioner does not
dispute that during 2000, he received wages of $73,210, gambling
winnings of $4,600, interest income of $298, and nonemployee
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