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Commissioner, 122 T.C. 143, 168 (2004) (quoting Higbee v.
Commissioner, 116 T.C. 438, 442 (2001)). Section 7491(a)(1)
applies only if the taxpayer complies with substantiation
requirements, maintains all required records, and cooperates
with reasonable requests by the Commissioner for witnesses,
information, documents, meetings, and interviews. Sec.
7491(a)(2). Although neither party alleges the applicability of
section 7491(a), we conclude that the burden of proof has not
shifted to respondent with respect to the issue in the present
case.
Moreover, deductions are a matter of legislative grace and
are allowed only as specifically provided by statute. INDOPCO,
Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice
Co. v. Helvering, 292 U.S. 435, 440 (1934).
1. ND and BD
Section 151(a) authorizes deductions for the exemptions
provided by that section. In particular, section 151(c)(1)
provides an exemption for each of a taxpayer’s dependents, as
defined in section 152, who is a child of the taxpayer and who
has not reached the age of 19 by the close of the taxable year.
Sec. 151(c)(1)(B).
3(...continued)
Commissioner, T.C. Memo. 2004-199.
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