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whether petitioners may deduct B&B expenses and writing activity
expenses. We first address who bears the burden of proof.
Petitioners bear the burden to prove that respondent’s
determination is wrong. See Rule 142(a); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering, 290
U.S. 111, 115 (1933). Moreover, deductions are a matter of
legislative grace, and petitioners bear the burden to prove that
they are entitled to the claimed deductions.5 See New Colonial
Ice Co. v. Helvering, 292 U.S. 435 (1934); Hradesky v.
Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam 540 F.2d
821 (5th Cir. 1976). In addition, where as here petitioners
failed to testify, we can presume that their testimony would have
been unfavorable. Wichita Terminal Elevator Co. v. Commissioner,
6 T.C. 1158, 1165 (1946) (citing Walz v. Fidelity-Phoenix Fire
Ins. Co., 10 F.2d 22 (6th Cir. 1926); Equip. Acceptance Corp. v.
Arwood Can Mfg. Co., 117 F.2d 442 (6th Cir. 1941); Bomeisler v.
M. Jacobson Trust, 118 F.2d 261 (1st Cir. 1941); Hann v. Venetian
Blind Corp., 111 F.2d 455 (9th Cir. 1940); Sears, Roebuck & Co.
v. Peterson, 76 F.2d 243 (8th Cir. 1935)), affd. 162 F.2d 513
(10th Cir. 1947).
5Petitioners did not move to shift the burden of proof to
respondent. Sec. 7491(a)(2)(A) and (B). Nor would petitioners
have qualified because they failed to present credible evidence,
substantiate their claimed expenses, or maintain adequate books
and records.
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