Kenneth Frank Diller - Page 5




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          expenses during 2002.  Petitioner submitted to respondent’s                 
          counsel on the morning of trial a Form 1040, U.S. Individual                
          Income Tax Return, for 2002, with an attached Schedule C, Profit            
          or Loss From Business, under the name KD Fabricating.  The                  
          Schedule C reported gross receipts of $53,826, total expenses of            
          $49,418 and a net profit of $4,408.  Petitioner included in the             
          gross income reported on Schedule C the recovery from his lawsuit           
          against Welding, the proceeds from the sale of a vehicle, and               
          other items.  Similarly, the expenses reported on Schedule C                
          include items from various sources.                                         
                                     Discussion                                       
               The Commissioner’s deficiency determinations are presumed              
          correct, and taxpayers generally have the burden of proving that            
          the determinations are incorrect.  Rule 142(a); Welch v.                    
          Helvering, 290 U.S. 111, 115 (1933).  Under certain                         
          circumstances, however, section 7491(a) may shift the burden to             
          the Commissioner with respect to a factual issue affecting                  
          liability for tax.  Petitioner did not present evidence or                  
          argument that he satisfied the requirements of section 7491(a),             
          and therefore, the burden of proof does not shift to respondent.            
               Taxpayers are required, under section 61(a), to include in             
          gross income “all income from whatever source derived” unless               
          such income has been specifically excepted from inclusion.  See             
          Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 430 (1955)                







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