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from three sources in 2003. In 2001, petitioner and his former
wife reached an agreement that remained in effect during 2003
concerning “parenting time and other parenting issues, and
financial issues regarding the children” with regard to their two
minor children.
Petitioner filed a Form 1040, U.S. Individual Income Tax
Return, for 2003 in which he claimed the earned income credit
with two qualifying children. With his Federal income tax return
for 2003, petitioner filed a Schedule C, Profit or Loss From
Business, on which he claimed total business expenses of $48,557.
Respondent disallowed the earned income credit and claimed
business expenses for lack of substantiation.
Discussion
Generally, the Commissioner’s determinations are presumed
correct, and taxpayers bear the burden of proving otherwise.
Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Petitioner has not raised the issue of section 7491(a), which
shifts the burden of proof to the Commissioner in certain
situations. The Court concludes that section 7491 does not apply
here because petitioner has not produced any evidence that
establishes the preconditions for its application.
Schedule C Expenses
Section 162 generally allows a deduction for ordinary and
necessary expenses paid or incurred during the taxable year in
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