Michael W. Allen - Page 10

          INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Welch v.             
          Helvering, 290 U.S. 111, 115 (1933).                                        
               Second, deductions are a matter of legislative grace, and              
          the taxpayer must show that he or she is entitled to any                    
          deduction claimed.  Rule 142(a); Deputy v. duPont, 308 U.S. 488,            
          493 (1940); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440            
          (1934); Welch v. Helvering, supra.  This includes the burden of             
          substantiation.  Hradesky v. Commissioner, 65 T.C. 87, 90 (1975),           
          affd. per curiam 540 F.2d 821 (5th Cir. 1976).                              
               A taxpayer must substantiate amounts claimed as deductions             
          by maintaining the records necessary to establish he or she is              
          entitled to the deductions.  Sec. 6001; Hradesky v. Commissioner,           
          supra.  A taxpayer shall keep such permanent records or books of            
          account as are sufficient to establish the amount of deductions             
          claimed on the return.  Sec. 6001; sec. 1.6001-1(a), (e), Income            
          Tax Regs.  The Court need not accept a taxpayer’s self-serving              
          testimony when the taxpayer fails to present corroborative                  
          evidence.  Beam v. Commissioner, T.C. Memo. 1990-304 (citing                
          Tokarski v. Commissioner, 87 T.C. 74,77 (1986)), affd. without              
          published opinion 956 F.2d 1166 (9th Cir. 1992).                            
               If a taxpayer establishes that he or she paid or incurred a            
          deductible business expense but does not establish the amount of            
          the deduction, this Court may approximate the amount of the                 
          allowable deduction, bearing heavily against the taxpayer whose             

          with petitioner.                                                            

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