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Fuel 24,200
Lumber services 2,251
In the notice of deficiency for taxable year 2003,
respondent disallowed deductions for: all legal and professional
fees; all travel expenses; all employee benefit programs
expenses; $6,084 of the $15,210 claimed as repairs and
maintenance expenses; and $22,663 of the $37,771 deducted as
“other expenses.”
Discussion
In general, the Commissioner’s determination as set forth in
a notice of deficiency is presumed correct. Welch v. Helvering,
290 U.S. 111, 115 (1933). 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).
In pertinent part, Rule 142(a)(1) provides the general
rule that “The burden of proof shall be upon the petitioner”.
In certain circumstances, however, if the taxpayer introduces
credible evidence with respect to any factual issue relevant to
ascertaining proper tax liability, section 7491 places the burden
of proof on the Commissioner. Sec. 7491(a)(1); Rule 142(a)(2).
Credible evidence is “‘the quality of evidence which, after
critical analysis, the court would find sufficient * * * to
base a decision on the issue if no contrary evidence were
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