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deficiency, respondent allowed deductions of $122 for office
expenses and $672 for other expenses claimed on Schedule C.
Respondent disallowed the balance of the deductions claimed on
Schedule C for lack of substantiation.
Discussion
Generally, the Commissioner’s determinations in a notice of
deficiency are presumed correct, and the taxpayer has the burden
of proving that those determinations are erroneous. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). In some
cases the burden of proof with respect to relevant factual issues
may shift to the Commissioner under section 7491(a). Petitioner
did not present evidence or argument that he satisfied the
requirements of section 7491(a). Therefore, the burden of proof
does not shift to respondent.
Tax deductions are a matter of legislative grace with a
taxpayer bearing the burden of proving entitlement to the
deductions claimed. Rule 142(a)(1); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992). Taxpayers bear the burden
of substantiating the amount and purpose of any claimed
deduction. See Hradesky v. Commissioner, 65 T.C. 87 (1975),
affd. per curiam 540 F.2d 821 (5th Cir. 1976).
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