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OPINION
Deductions are a matter of legislative grace, and a taxpayer
bears the burden of proving that he has complied with the
specific requirements for any deduction he claims.2 See INDOPCO,
Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice
Co. v. Helvering, 292 U.S. 435, 440 (1934).
Under section 162,3 a taxpayer may deduct all ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on any trade or business, if the taxpayer maintains
sufficient records to substantiate the expenses. Sec. 162(a);
see sec. 6001; Deputy v. duPont, 308 U.S. 488, 495 (1940); sec.
1.6001-1(a), Income Tax Regs. However, traveling expenses and
expenses paid or incurred with respect to listed property, i.e.,
a passenger automobile, computer or peripheral equipment, and
cellular telephones, are deductible only if the taxpayer meets
the stringent substantiation requirements of section 274. See
sec. 274(d); sec. 280F(d)(4); Sanford v. Commissioner, 50 T.C.
823, 827 (1968), affd. 412 F.2d 201 (2d Cir. 1969); sec. 1.280F-
6T(b), Temporary Income Tax Regs., 49 Fed. Reg. 42713 (Oct. 24,
2 We need not decide whether the burden of proof shifts to
respondent under sec. 7491(a) because petitioner failed to comply
with respondent’s reasonable requests for information. In any
event, we decide this case on the basis of the preponderance of
evidence on the record.
3 Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the year in issue.
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Last modified: May 25, 2011