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longer challenge, respondent’s determinations that they are not
entitled to the medical and dental expense deduction. However,
they continue to challenge respondent’s other determinations.
Discussion
As a general rule, the Commissioner’s determinations in the
notice of deficiency are presumed correct, and the burden of
proving an error is on the taxpayer. Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933). However, pursuant to
section 7491(a), the burden of proof with respect to any factual
issue relating to ascertaining the liability for tax shifts to
the Commissioner if the taxpayer: (1) Maintained adequate
records; (2) satisfied the substantiation requirements; (3)
cooperated with the Commissioner’s agents; and (4) during the
Court proceeding introduced credible evidence with respect to the
factual issue involved. Petitioners did not meet the
substantiation requirements or introduce credible evidence
regarding the disallowed amounts; therefore, the burden of proof
does not shift to respondent.
It is settled law that deductions are a matter of
legislative grace, and the taxpayer must prove that he/she is
entitled to the claimed deductions. INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934). With these well-established
propositions in mind, we decide whether petitioners have
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