Noel Colstock - Page 4

                                        - 3 -                                         
          substantiate his claims.                                                    

               Deductions are a matter of legislative grace, and taxpayers            
          must maintain adequate records to substantiate the amounts of any           
          deductions or credits claimed.  Sec. 6001; INDOPCO, Inc. v.                 
          Commissioner, 503 U.S. 79, 84 (1992); sec. 1.6001-1(a), Income              
          Tax Regs.  Taxpayers generally bear the burden of proving that              
          the Commissioner’s determinations are incorrect.  Rule 142(a);              
          Welch v. Helvering, 290 U.S. 111 (1933).  Section 7491 does not             
          apply because petitioner has failed to substantiate his                     
          deductions and provide credible evidence.                                   
          1.  Dependency Exemption Deductions                                         
               Section 151(c) allows a taxpayer to deduct an exemption                
          amount for each “dependent” as defined in section 152.  As                  
          relevant here, section 152(a) defines a dependent to include a              
          son or daughter of the taxpayer “over half of whose support, for            
          the calendar year in which the taxable year of the taxpayer                 
          begins, was received from the taxpayer (or is treated under                 
          subsection (c) or (e) as received from the taxpayer)”.                      
               To qualify for a dependency exemption deduction, a taxpayer            
          must establish the total support cost expended on behalf of a               
          claimed dependent from all sources for the year and demonstrate             
          that he provided over half of this amount.  See Archer v.                   

Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011