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With respect to the deficiencies determined by respondent,
the Court notes that, as a general rule, the Commissioner’s
determination of a taxpayer’s liability for an income tax
deficiency is presumed correct, and the taxpayer bears the burden
of proving that the determination is improper. See Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). Thus, petitioner
is incorrect that respondent bears the burden of proving the
existence of income tax deficiencies.5 Moreover, petitioner has
failed to demonstrate that any of the determined deficiencies are
improper.
III. Dependency Exemptions
Tax exemptions and deductions are a matter of legislative
grace. See Indep. Co-op Milk Producers Association v.
Commissioner, 76 T.C. 1001, 1014 (1981) (“Whether * * *
categorized as exclusions or deductions * * * it is axiomatic
that such provisions are a matter of legislative grace and must
be strictly construed.”). The taxpayer bears the burden of
proving entitlement to any claimed exemptions or deductions; the
5 In light of the fact that this case involves unreported
income, to the extent that respondent may bear some burden to
show a minimal evidentiary foundation for the asserted
deficiencies, respondent has done so because petitioner has
stipulated the amounts of unreported salary and dividend income
for the taxable years at issue. See Senter v. Commissioner, T.C.
Memo. 1995-311. Although petitioner did not stipulate the amount
of unreported income (short-term capital gain) resulting from his
sale of Intel Corporation stock in 2003, that amount is evidenced
by third-party records submitted by respondent as an exhibit in
this case.
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