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professional services to GMAC and incurred $967.70 in
reimbursable expenses.
Petitioner also credibly testified, and provided
corroborating bank statements showing, that $19,282 and
$19,967.70 were debited from his account on February 13 and
March 27, 2003, respectively. On the basis of petitioner’s
testimony and corroborating evidence, we conclude that petitioner
was merely a conduit for the $39,249. Accordingly, we hold that
the $39,249 that petitioner received from GMAC and in turn paid
to Ms. Mulvey is not includable in petitioners’ gross income.
Regarding the nonreimbursed business expenses petitioners
seek to deduct, deductions are a matter of legislative grace.
INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992). The
taxpayer bears the burden of proving he is entitled to deductions
and must present adequate documentation to support any deductions
claimed. Welch v. Helvering, supra at 115; see also Nowland v.
Commissioner, 244 F.2d 450, 453 (4th Cir. 1957) (holding the
taxpayer bears the “burden of proving the amount of the
deductible expenses since deductions are a matter of statutory
privilege and must be shown by substantial evidence”). At trial
petitioner submitted numerous receipts and documentation
substantiating his business expenses for taxable year 2003. With
the exception of three automobile payments to Saab Financial
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