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As indicated, petitioners also claim that petitioner paid a
total of $65,676, not $59,498, in legal fees to her attorney
relating to the arbitration award that should be deductible.
Respondent argues that petitioner has substantiated only $59,498
(resulting in a difference of $6,178).
Generally, taxpayers bear the burden of proving that they
are entitled to deductions claimed. See New Colonial Ice Co. v.
Helvering, 292 U.S. 435 (1934); Hradesky v. Commissioner, 65 T.C.
87, 90 (1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976).
Petitioners herein offered no credible evidence to
substantiate that the legal fees paid in 2001 relating to the
arbitration award exceeded $59,498. The burden of proof with
respect to the additional $6,178 in legal fees is not shifted to
respondent and remains on petitioners. Sec. 7491(a)(1) and (2);
Rule 142(a).
Also, petitioners provided neither records nor any credible
evidence relating to the $8,250 in additional itemized deductions
claimed on their 2001 amended tax return. The burden of proof
with respect thereto remains on petitioners.
2(...continued)
as a deduction in computing adjusted gross income, with the
result that they are not subject to the AMT, and are not subject
to the 2-percent floor. Unfortunately for petitioners, however,
amended sec. 62(a) is not retroactive and does not apply to
petitioners’ 2001 Federal income tax. See Commissioner v. Banks,
543 U.S. 426, ___, 125 S. Ct. 826, 831 (2005).
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