T.C. Memo. 1999-274
UNITED STATES TAX COURT
WILLIAM ALLEN SIMPSON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 6165-98. Filed August 13, 1999.
William Allen Simpson, pro se.
Trevor T. Wetherington, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
LARO, Judge: William Allen Simpson petitioned the Court to
redetermine respondent's determination of a $43,858 deficiency in
his 1994 Federal income tax and additions thereto under sections
6651(a)(1) and 6654(a) of $6,840 and $2,227, respectively.
Following the parties' concessions, we must decide whether
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petitioner may deduct amounts for 1994 greater than those allowed
by respondent and whether petitioner is liable for the additions
to tax set forth above. We hold that petitioner may not deduct
any greater amount and that he is liable for the additions to
tax. Section references are to the Internal Revenue Code in
effect for the subject years. Rule references are to the Tax
Court Rules of Practice and Procedure. Dollar amounts are
rounded to the nearest dollar.
FINDINGS OF FACT
Some facts have been stipulated. The stipulated facts and
the exhibit submitted therewith are incorporated herein by this
reference. Petitioner was self-employed during 1994 as a
computer engineer. He resided in Madison Heights, Michigan, when
he petitioned the Court.
Petitioner did not timely file a 1994 Federal income tax
return. Respondent determined petitioner's income tax liability
for 1994 and issued to him a notice of deficiency reflecting that
determination. Respondent later adjusted that determination to
take into account deductions raised and substantiated by
petitioner after the issuance of the notice of deficiency.
Petitioner asserts that, in addition to the deductions allowed by
respondent, he may deduct certain other amounts as business
expenses. Petitioner paid $3,600 to a personal acquaintance
(Elizabeth Helmboldt), $10,000 to his sister (Ruth Eileen
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Simpson), and $1,064 for a flying lesson. Petitioner asserts
that these payments were ordinary and necessary expenses of his
computer engineering business. Petitioner has never obtained a
pilot's license nor piloted an airplane in carrying on his
business.
OPINION
Petitioner must prove that respondent's determinations set
forth in the notice of deficiency are incorrect. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Petitioner
also must prove his entitlement to any deduction. Deductions are
strictly a matter of legislative grace, and petitioner must show
that his claimed deductions are allowed by the Code. See also
New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
Petitioner must maintain sufficient records to substantiate his
claimed deductions. See sec. 6001; sec. 1.6001-1(a), Income Tax
Regs.
Petitioner's burden of proof requires that he introduce
sufficient evidence to: (1) Make a prima facie case establishing
that respondent committed the errors alleged in the petition and
(2) overcome the evidence favorable to respondent. See Lyon v.
Commissioner, 1 B.T.A. 378, 379 (1925); see also Lawler v.
Commissioner, T.C. Memo. 1995-26. Petitioner relies mainly on
his testimony to meet his burden. We find his testimony
unpersuasive and incomplete. Petitioner provided no written
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documents establishing that the disputed expenses are related to
his business, nor did he call any witnesses to corroborate his
testimony. Because the record is devoid of evidence disproving
any of respondent's determinations, we sustain those
determinations in full. See Finesod v. Commissioner, T.C. Memo.
1994-66.
To reflect respondent's concessions,
Decision will be
entered under Rule 155.