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requirement in section 6214(a) that the Commissioner make a claim
for the increased deficiency is satisfied. See McGee v.
Commissioner, supra (citing Woods v. Commissioner, 91 T.C. 88, 93
(1988)); see also Pallottini v. Commissioner, 90 T.C. 498, 500
(1988).
Taxpayers generally bear the burden of proving that the
Commissioner's determinations are incorrect. Rule 142(a); Welch
v. Helvering, 290 U.S. 111, 115 (1933). However, the
Commissioner bears the burden of proof in respect of any new
matter or increases in deficiency. Rule 142(a); Powerstein v.
Commissioner, 99 T.C. 466, 473 n.4 (1992). The resolution of the
remaining issues does not depend on which party has the burden of
proof. The Court resolves those issues on the preponderance of
the evidence in the record; therefore section 7491 does not apply
here.
I. Petitioner's Employment Status and Liability for Self-
Employment Tax
Adjusted gross income generally consists of gross income
less trade or business expenses, except in the case of the
performance of services by an employee. Sec. 62. With
exceptions not relevant here, an individual performing services
as an employee may deduct expenses incurred in the performance of
services as an employee only as miscellaneous itemized deductions
on Schedule A and then only to the extent such expenses exceed 2
percent of the individual's adjusted gross income. Secs. 63(a),
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