Scott Owen Schubert & Amy K. Moore - Page 6

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          shifted to the Commissioner where the “taxpayer introduces                  
          credible evidence with respect to * * * such issue.”  Sec.                  
          7491(a)(1).  The burden will shift only if the taxpayer has                 
          complied with the substantiation requirements and has cooperated            
          with the Commissioner’s reasonable requests for witnesses,                  
          information, documents, meetings, and interviews.  Sec.                     
               Petitioners have not alleged or proven that section 7491(a)            
          applies; accordingly, petitioners must prove that they are                  
          entitled to the deductions.  See INDOPCO, Inc. v. Commissioner,             
          503 U.S. 79, 84 (1992) (stating that deductions are strictly a              
          matter of legislative grace, and taxpayers bear the burden of               
          proving that they are entitled to claim the deduction).                     
          II.  Unreimbursed Employee Business Expenses                                
               It is well established that an individual may be in the                
          trade or business of being an employee and that ordinary and                
          necessary expenses incurred in his trade or business are                    
          deductible subject to the limitations of section 67.3  See secs.            
          67(a) and (b), 162(a); Primuth v. Commissioner, 54 T.C. 374                 
          (1970); Christensen v. Commissioner, 17 T.C. 1456 (1952).                   

               3  Sec. 67(a) imposes a limitation on the deductibility of             
          an individual’s miscellaneous itemized deductions:  such                    
          deductions are allowable only to the extent that the aggregate              
          deductions exceed a floor of 2 percent of adjusted gross income             
          (AGI).  The term “miscellaneous itemized deductions” is defined             
          in sec. 67(b) as those itemized deductions that are not                     
          specifically enumerated therein.                                            

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