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$85,009. Petitioners are now claiming $86,040 for the business
bad debt deduction.
Petitioners contend that an amended return was sent to the
Internal Revenue Service claiming $86,040 for the business bad
debt on Schedule C and correcting the pension income. Respondent
has no record of receiving the amended return. Irrespective of
whether an amended return was filed, petitioners bear the burden
of showing the amounts of deductions. Specifically, petitioners
bear the burden of proving they are entitled to the deductions
claimed. See INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84
(1992); Higbee v. Commissioner, 116 T.C. 438, 440 (2001).
Respondent allowed an $85,009 business bad debt deduction in
the notice of deficiency. That allowance was $275 more than the
$84,734 petitioners claimed on their original return. At trial,
petitioner, by means of testimony and documents, substantiated
that the loans to KPS totaled $86,040. On the basis of this
evidence, we hold petitioners are entitled to a deduction for the
business bad debt in the amount of $86,040.
Addition to Tax and Accuracy-Related Penalty
Respondent determined an addition to tax under section
6651(a)(1) and an accuracy-related penalty under section 6662(a).
Section 7491(c) requires the Commissioner to carry the burden of
production in any court proceeding with respect to the liability
of any individual for any penalty, addition to tax, or additional
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