                  T.C. Summary Opinion 2005-156



                     UNITED STATES TAX COURT



                BRENDA NASH-MILTON, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 318-04S.             Filed October 26, 2005.


     Brenda Nash-Milton, pro se.

     Miriam C. Dillard, for respondent.



     PANUTHOS, Chief Special Trial Judge:   This case was heard

pursuant to the provisions of section 7463 of the Internal

Revenue Code in effect when the petition was filed.   The decision

to be entered is not reviewable by any other court, and this

opinion should not be cited as authority.   Unless otherwise

indicated, all subsequent section references are to the Internal

Revenue Code in effect at relevant times, and all Rule references

are to the Tax Court Rules of Practice and Procedure.
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     Respondent determined a deficiency of $833 in petitioner’s

Federal income tax for 2001.    The issues for decision are:     (1)

Whether petitioner received and failed to report unemployment

compensation for the year in issue; (2) whether petitioner is

entitled to a deduction for contributions to an Individual

Retirement Account (IRA) for the year in issue; and (3) whether

petitioner is entitled to deduct Schedule C, Profit or Loss From

Business, expenses claimed on a Form 1040X, Amended U.S.

Individual Income Tax Return, submitted to respondent.

                              Background

     Some of the facts have been stipulated, and they are so

found.   The stipulation of facts and the attached exhibits are

incorporated by this reference.    Petitioner resided in Orlando,

Florida, at the time the petition was filed.

     This case was called for trial at a trial session of the

Court in Tampa, Florida, on September 20, 2004.      Counsel for

respondent appeared at trial; however, there was no appearance by

or on behalf of petitioner.    Respondent advised the Court that

petitioner and respondent had executed a stipulation of facts,

and, accordingly, this stipulation with attached exhibits was

filed and made part of the record.      Petitioner provided no

explanation for her failure to appear at the trial session.        By

order dated September 20, 2004, the Court deemed the matter
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submitted as fully stipulated.    See Rule 149(a).    Respondent’s

trial memorandum was filed on the same date.

     On October 1, 2004, respondent filed a Notice of Proceeding

in Bankruptcy advising that petitioner had filed a petition with

the U.S. Bankruptcy Court for the District of Arizona under 11

U.S.C. chapter 13 on June 3, 2004.1      By order dated October 18,

2004, the Court stayed all proceedings under 11 U.S.C. section

362(a)(8) and vacated the pertinent part of the September 20,

2004, order in which the case was deemed submitted.

     On February 1, 2005, the bankruptcy court confirmed

petitioner’s chapter 13 plan which provided for 60 monthly

payments.   On July 30, 2005, the bankruptcy court granted

respondent’s motion to modify the automatic stay to permit the

Tax Court proceeding to continue.

     By order dated August 31, 2005, petitioner was given until

September 22, 2005, to file an objection, if any, to submission

of this case fully stipulated.    Petitioner did not file an

objection, and on October 5, 2005, the Court deemed this case

submitted fully stipulated.

     As previously noted, petitioner failed to appear or present

argument, and, accordingly, the factual background is based on

the stipulation of facts and exhibits submitted to the Court.

During the taxable year 2001 petitioner received wages of $15,808


     1
         The petition was filed on Jan. 7, 2004.
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and unemployment compensation from the State of Arizona of

$3,485.

Tax Return and Notice of Deficiency

     Petitioner timely filed a Form 1040, U.S. Individual Income

Tax Return, for 2001.   A copy of the return was not made part of

this record, but the parties did attach a copy of a RTVUE, which

is a type of Internal Revenue Service electronic transcript

reflecting relevant information from the 2001 return.2

Petitioner did not report, on the 2001 return, the $3,485 of

unemployment compensation received from the State of Arizona.

Petitioner also claimed an IRA deduction in the amount of $2,000.

In an amended return, Form 1040X (stamped received by the IRS on

April 29, 2004), petitioner attached a Schedule C wherein she

reported gross receipts of zero and claimed expenses of $5,302.

     In the notice of deficiency, respondent determined that

petitioner received unreported unemployment compensation income

of $3,485.    Respondent further disallowed the claimed IRA

deduction.3


     2
        The Court notes that the RTVUE reflects wages of $17,808.
The stipulation of facts reflects wages of $15,808. The record
does not explain this discrepancy. The Court’s findings are
premised on the stipulation of facts.
     3
        The Schedule C, Profit or Loss From Business, deduction
of $5,302 was not claimed by petitioner until after the notice of
deficiency was issued and after the petition was filed.
Accordingly, the claimed deduction is considered by the Court as
if properly raised by amendment to petition.
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                             Discussion

     Petitioner did not assert or present evidence or argument

that she satisfied the requirements of section 7491(a).        We

conclude that the burden of proof does not shift in this case.

Petitioner failed to appear in this case to present any argument

or evidence that the adjustments made in the notice of deficiency

are incorrect.    Further, petitioner presented no evidence to

support the Schedule C expenses claimed on the Form 1040X.          The

fact that this case was submitted on the basis of the stipulated

record does not change the burden of proof.      Rule 122(b);

Borchers v. Commissioner, 95 T.C. 82, 91 (1990), affd. on other

issues 943 F.2d 22 (8th Cir. 1991).

     Section 61 provides that all income, from whatever source

derived, is includable in gross income unless specifically

excluded by another provision.    See Commissioner v. Glenshaw

Glass Co., 348 U.S. 426, 431 (1955).      “In the case of an

individual, gross income includes unemployment compensation.”

Sec. 85(a).    “[T]he term ‘unemployment compensation’ means any

amount received under a law of the United States or of a State

which is in the nature of unemployment compensation.”      Sec.

85(b).   “The amount of any item of gross income shall be included

in the gross income for the taxable year in which received by the

taxpayer”.    Sec. 451(a).
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     Deductions, which are strictly construed, are a matter of

legislative grace, and the burden of clearly showing the right to

the claimed deduction is on the taxpayer.        INDOPCO, Inc. v.

Commissioner, 503 U.S. 79, 84 (1992).       Section 219 permits,

subject to limitations, a deduction for a qualified retirement

contribution.   Section 162 permits a deduction for ordinary and

necessary expenses paid or incurred in carrying on a trade or

business.

     There is no evidence in this record indicating that a

contribution was made to a qualified retirement plan during the

year in issue or that petitioner paid or incurred expenses in

carrying on a trade or business.    There are neither documents nor

testimony to establish entitlement to the claimed deductions.

Accordingly, petitioner is not entitled to the claimed $2,000

deduction for a contribution to an IRA or the claimed $5,302

deduction on Schedule C of the amended return.

     In conclusion, we find in favor of respondent on all issues.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing,


                                         Decision will be entered for

                                 respondent.
