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Discussion
The Commissioner’s determination in a notice of deficiency
is generally presumed correct, and the taxpayer has the burden of
proving that the determination is erroneous. See Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). Tax deductions are
a matter of legislative grace, and the taxpayer bears the burden
of proving entitlement to the deductions claimed on a return.
Rule 142(a)(1); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84
(1992).
Under certain circumstances, the burden of proof with
respect to relevant factual issues may shift to the Commissioner
under section 7491(a). Petitioner has neither alleged that
section 7491(a) applies nor established his compliance with the
requirements of section 7491(a)(2)(A) and (B) to substantiate
items, maintain records, and cooperate fully with respondent’s
reasonable requests. Therefore, the burden of proof does not
shift to respondent.
Respondent’s position is that petitioner cannot claim any of
the deductions related to the Bronx Boulevard house because he
was not the owner of the property. As we understand his
position, petitioner contends that he is entitled to claim these
deductions because he paid the mortgage payments and all of the
bills associated with the house.
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Last modified: November 10, 2007