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A taxpayer is generally required to substantiate deductions
by keeping books and records sufficient to establish the amount
of the deductions. Sec. 6001; sec. 1.6001-1(a), Income Tax Regs.
Deductions are a matter of legislative grace, and generally the
taxpayer bears the burden of proving entitlement to any deduction
claimed. Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S.
79, 84 (1992). The burden of proof has not shifted to respondent
pursuant to section 7491(a). While examination of the tax
returns in issue commenced after July 22, 1998, petitioner has
not satisfied any of the criteria of section 7491(a)(2)(A) and
(B). Indeed, we found petitioner’s testimony to be questionable;
his testimony was at times vague, evasive, or inconsistent with
documents made part of this record.
1. Dependency Exemption Deductions
A taxpayer is allowed a deduction for a dependent over half
of whose support is provided by the taxpayer. Secs. 151(a),
(c)(1), 152(a). The term “dependent” includes a brother of the
taxpayer. Sec. 152(a)(3). The term “support” includes food,
shelter, clothing, medical and dental care, education, and the
like. Sec. 1.152-1(a)(2)(i), Income Tax Regs. The total amount
of support for each of the claimed dependents furnished by all
sources during the year in issue must be established by competent
evidence. Blanco v. Commissioner, 56 T.C. 512, 514 (1971). The
amount of support that the claimed dependent received from the
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Last modified: May 25, 2011