- 8 -
Helvering, 290 U.S. 111, 115 (1933). Moreover, deductions are a
matter of legislative grace, and petitioners 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).
A. Petitioners' Schedule C Expenses
It is well settled that a corporation is an entity distinct
from its shareholders. Moline Props., Inc. v. Commissioner, 319
U.S. 436 (1943); Dalton v. Bowers, 287 U.S. 404, 410 (1932).
Furthermore, the business of a corporation is separate and
distinct from the business of its shareholders. Moline Props.,
Inc. v. Commissioner, supra; Deputy v. DuPont, 308 U.S. 488, 494
(1940); Crook v. Commissioner, 80 T.C. 27, 33 (1983), affd.
without published opinion 747 F.2d 1463 (5th Cir. 1984).
Consequently, a shareholder is not entitled to a deduction for
the payment of corporate expenses. Deputy v. DuPont, supra at
494; Hewett v. Commissioner, 47 T.C. 483 (1967). Petitioner
incorporated ARA in Indiana in June 1999 and accordingly would
not be entitled to deduct ARA's expenses.
To the extent that the claimed deductions related to
petitioner's employment at the university and IIEM, they were not
substantiated, as petitioners failed to substantiate any of the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011