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health policy.7
Petitioners timely filed Form 1040, U.S. Individual Income
Tax Return, for their taxable year 2001. Petitioners’ 2001
Schedule C pertained to Mr. Eyler’s tiling business. In that
schedule, petitioners claimed, inter alia, a deduction of $5,066
for expenses for “Employee benefit programs”.
On July 12, 2005, respondent issued to petitioners a notice
of deficiency (notice) for their taxable year 2001. In that
notice, respondent determined to disallow the $5,066 deduction
that petitioners claimed in petitioners’ 2001 Schedule C for
“Employee benefit programs” because petitioners “did not estab-
lish that the health insurance expense incurred in 2001 qualifies
as a Schedule C deduction”. In the notice, respondent also
determined to allow petitioners a deduction of $3,040 for “Self-
Employed Health Insurance”.
OPINION
The parties submitted this case fully stipulated under Rule
122. That the parties submitted this case under that Rule does
not affect who has the burden of proof or the effect of a failure
of proof. Rule 122(b); Borchers v. Commissioner, 95 T.C. 82, 91
(1990), affd. 943 F.2d 22 (8th Cir. 1991).
The parties disagree over whether the burden of proof in
7The record does not disclose the capacity in which or the
method by which Mr. Eyler paid the $5,066 of premiums for Mr.
Eyler’s Wellmark health policy.
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Last modified: March 27, 2008