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Discussion
Deductions are a matter of legislative grace, and taxpayers
must maintain adequate records to substantiate the amount 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, 115 (1933).
Section 7491 does not apply here because petitioner has
failed to substantiate his deductions and provide evidence other
than his own testimony. See sec. 7491(a)(2).
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, a son or daughter of a sibling
of the taxpayer, or an individual other than a spouse, whose
principal place of abode is the home of the taxpayer and who is a
member of the taxpayer’s household “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
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Last modified: May 25, 2011