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Corp. & Subs. v. Commissioner, 110 T.C. 402, 414 (1998).
Deductions are a matter of legislative grace, and the taxpayer
bears the burden of proving that he is entitled to any deduction
claimed. Rule 142(a); New Colonial Ice Co. v. Helvering, 292
U.S. 435, 440 (1934). The taxpayer is required to maintain
records that are sufficient to enable the Commissioner to
determine his correct tax liability. See sec. 6001; sec.
1.6001-1(a), Income Tax Regs.
At trial, petitioner asserted that he incurred the following
expenses in connection with driving a taxi cab: (1) $28,100 for
leasing the cab; (2) $2,500 for gasoline; and (3) $1,100 for
cleaning and washing the cab.2 Petitioner credibly testified
that he leased a cab for an average of 4 or 5 days a week at a
cost of $70 to $80 a day. Petitioner also testified that he paid
for gasoline for each day he drove. Petitioner used cash to pay
the lease and to purchase gasoline.
Respondent disallowed the claimed expenses because of
petitioner’s failure to maintain records in accordance with
2 As mentioned above, petitioner claimed $28,600 of expenses
on Schedule C. This amount represents $28,100 of leasing expense
and $500 of bad debt expense. A notation on Schedule C suggests
that petitioner may have intended to claim the $500 as car and
truck expense. In any event, petitioner offered no testimony
with respect to the claimed deduction for $500, and we therefore
consider that petitioner has conceded this amount of the
adjustment. See Nicklaus v. Commissioner, 117 T.C. 117, 120 n.4
(2001). Petitioner did not claim any amount for gasoline or
cleaning and washing expenses on Schedule C.
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