Marcus V. and Polly A. Booker - Page 5

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          expense deductions for Mr. Booker’s business.  Respondent                   
          disallowed the claimed deductions for lack of substantiation.               
               Petitioners also untimely filed their 2000 Federal income              
          tax return on June 7, 2001.  On that return, petitioners claimed            
          a dependency exemption deduction for Mrs. Booker’s mother.                  
          Petitioners also claimed itemized deductions of $13,405 for                 
          charitable contributions and $19,998 for various trade or                   
          business expenses deductions in connection with Mr. Booker’s                
          business.  Respondent also disallowed these deductions for lack             
          of substantiation.                                                          
               Deductions are a matter of legislative grace, and the                  
          taxpayer bears the burden of proving entitlement to any                     
          deductions claimed.  Rule 142(a); INDOPCO, Inc. v. Commissioner,            
          503 U.S. 79, 84 (1992).  The taxpayer is required to identify               
          each deduction available and show that all requirements have been           
          met.  New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440                  
          (1934).  It is also the taxpayer’s responsibility to maintain               
          records sufficient to enable the Commissioner to determine the              
          correct tax liability.  Sec. 6001; Higbee v. Commissioner, 116              
          T.C. 438 (2001); sec. 1.6001-1(a), Income Tax Regs.  The taxpayer           
          must substantiate both the amount and purpose of claimed                    
          deductions.  Higbee v. Commissioner, supra.  As previously                  

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