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petitioners’ checking account to a separate IRA account in
petitioner’s name in America First Credit Union.
Petitioners received no wages or salaries from employment in
2002. They were not engaged in any business in that year. They
did not file a Schedule C, Profit or Loss From Business, with
their income tax return for 2002. They had no earnings from
self-employment in that year.
In the notice of deficiency, respondent disallowed
petitioners’ claimed IRA deduction of $3,500 for the year 2002.
Discussion
A. IRA Deduction
In general, taxpayers have the burden of proving that the
Commissioner’s determinations are incorrect. Rule 142(a)(1);
Welch v. Helvering, 290 U.S. 111, 115 (1933). Section 7491(a)(1)
shifts the burden of proof of a factual issue to the Commissioner
under certain limited circumstances. Section 7491 does not
affect our analysis because our holding does not depend upon
which party has the burden of proof; the evidence in the record
establishes the facts and the resolution of the disputed IRA
deduction involves a matter of law.
Although respondent first contends that petitioners have not
substantiated the payment made to petitioner’s IRA account at
America First Credit Union for taxable year 2002, the evidence
contained in the record establishes that on March 30, 2003,
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