- 3 - 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 havePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011