-4-
(f), by filing a Form 8857, Request for Innocent Spouse Relief
(request). Respondent denied Butler’s request, determining that
she signed the joint return despite knowing about the item giving
rise to the deficiency.
OPINION
A. Deficiency Determination
The burden of proof is on petitioners to show that
respondent’s determinations set forth in the notice of deficiency
are incorrect. Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111,
115 (1933). Deductions are strictly a matter of legislative
grace, and petitioners must show that their claimed deductions
are allowed by the Code. Rule 142(a); New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934); Welch v. Helvering, supra at
115.
In certain circumstances, if the taxpayer introduces
credible evidence with respect to a factual issue relevant to
ascertaining the taxpayer’s proper tax liability, section
7491(a)(1) places the burden of proof on the Commissioner. Sec.
7491(a)(1); Rule 142(a)(2). For the burden to be placed on the
Commissioner under section 7491(a)(1), the taxpayer, inter alia,
must comply with the substantiation and record-keeping
requirements of the Internal Revenue Code (Code). Sec.
7491(a)(2)(A) and (B). We conclude that the burden of proof is
not upon respondent because petitioners have failed to introduce
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