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142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Moreover, 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).
In 1982, petitioner leased a parcel of land on which he and
his family ran a small produce stand out of a moveable type
structure. Petitioner contends that, despite his lease, a “group
of lawyers” wanted to build a motel on the land. Petitioner
claims that when he refused to move, “they took a truck in and
took everything that I had”. As a result, petitioner’s produce
stand was forced to shut down, and petitioner allegedly sustained
a business loss of $10,000.
On his 1982 return, petitioner claimed a business loss of
$10,000 for his produce stand. Petitioner’s testimony suggests
that he expected the Internal Revenue Service (IRS) to reimburse
him, in actual dollars, for the business loss claimed on the
return. When petitioner did not receive any form of response
from the IRS, he continued to claim a business loss of $10,000 on
each and every return that he filed with the IRS after 1982
because he wanted “a sense of fairness from the IRS.”
2(...continued)
because petitioner has not produced any evidence that establishes
the preconditions for its application.
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Last modified: November 10, 2007