Augusto & Maria Negret - Page 7

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               In general, the Commissioner’s determinations as to matters            
          of fact in the notice of deficiency are presumed to be correct,             
          and the taxpayers have the burden of proving otherwise.  See Rule           
          142(a);5 Welch v. Helvering, 290 U.S. 111, 115 (1933).                      
          Petitioners have not contended that section 7491 applies so as to           
          shift the burden of proof; on the record in the instant case, if            
          such a contention had been made, then we would have concluded               
          that the requirements of section 7491(a)(2) had not been met, and           
          so the burden of proof would not have been shifted.                         
               For convenience, we consider first the vehicle insurance               
          issue and then the depreciation issue.                                      
          A.  Vehicle Insurance                                                       
               Section 274(d)(4) provides that no deduction shall be                  
          allowed with respect to listed property (as defined in section              
          280F(d)(4)) unless certain substantiation requirements are met.             
          As best we can tell from the meager record, the vehicle Maria               
          used in her Avon business was a passenger automobile, within the            
          meaning of paragraphs (4)(A)(i) and (5) of section 280F(d).                 
               Section 1.274-5(j)(2), Income Tax Regs., authorizes the                
          Commissioner to “establish a method under which a taxpayer may              
          use mileage rates to determine the amount of the ordinary and               
          necessary expenses of using a vehicle for local transportation *            

               5 Unless indicated otherwise, all Rule references are to the           
          Tax Court Rules of Practice and Procedure.                                  

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