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burden of proof on the Commissioner. Sec. 7491(a)(1); Rule
142(a)(2). Credible evidence is “‘the quality of evidence which,
after critical analysis, [a] court would find sufficient upon
which to base a decision on the issue if no contrary evidence
were submitted’”. Baker v. Commissioner, 122 T.C. 143, 168
(2004) (quoting Higbee v. Commissioner, 116 T.C. 438, 442
(2001)). Section 7491(a)(1) applies only if the taxpayer
complies with substantiation requirements, maintains all required
records, and cooperates with the Commissioner’s requests for
witnesses, information, documents, meetings, and interviews.
Sec. 7491(a)(2). Although neither party alleges the
applicability of section 7491(a), we conclude that the burden of
proof has not shifted to respondent with respect to any of the
issues in this case.
Moreover, deductions are a matter of legislative grace and
are allowed only as specifically provided by statute. INDOPCO,
Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice
Co. v. Helvering, 292 U.S. 435, 440 (1934).
1. Dependency Exemption Deductions
Section 151 allows as a deduction an exemption for each
dependent of the taxpayer. Sec. 151(c). Section 152(a) defines
the term “dependent”, in pertinent part, to include a son or
daughter of the taxpayer over half of whose support for the
calendar year was received from the taxpayer. “[S]upport”
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