                         T.C. Memo. 1998-431



                       UNITED STATES TAX COURT



      ALADAR AND ILONA G. STOLMAR, DECEASED, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 18812-96, 18057-97.          Filed December 8, 1998.



     Aladar Stolmar, pro se.

     Julia L. Wahl, for respondent.



                         MEMORANDUM OPINION


     CHIECHI, Judge:    Respondent determined the following defi-

ciencies in, and accuracy-related penalties on, petitioners'

Federal income tax for the years 1994 and 1995:
                                 - 2 -

                                         Accuracy-Related Penalty
         Year          Deficiency              Sec. 6662(a)1
         1994           $9,048                    $1,810
         1995            5,650                     1,130

     We must decide whether the determinations in the notices of

deficiency (notices) that have not been conceded by respondent

should be sustained.    We hold that they should.2

     Some of the facts have been stipulated and are so found.3

     Petitioners Aladar Stolmar (Mr. Stolmar) and Ilona G.

Stolmar, now deceased, resided in Canonsburg, Pennsylvania, at

the time the petitions in these cases were filed.

     Respondent determined in the notices, inter alia, that all

of the expenses which petitioners claimed in Schedules C of the

Federal income return (return) that they filed for each of the

years 1994 and 1995 "have been disallowed due to your failure to

     1
        All section references are to the Internal Revenue Code
in effect for the years at issue. All Rule references are to the
Tax Court Rules of Practice and Procedure.
     2
        Respondent issued a notice of deficiency to Aladar
Stolmar and Ilona G. Stolmar for each of the years 1994 and 1995.
They both filed a petition with respect to each of those notices.
There-after, Ilona G. Stolmar died, and the Court granted
respondent's motion to dismiss these cases for lack of
prosecution as to Ilona G. Stolmar, deceased. Pursuant to this
Opinion and the Court's Order dated Sept. 25, 1998, decisions
will be entered under Rule 155 as to each petitioner in the same
amounts for 1994 and 1995.
     3
        Respondent objected to certain of the stipulations of
fact on grounds of relevancy, and petitioner Aladar Stolmar
objected to certain other stipulations of fact on relevancy
grounds. We shall give the stipulations of fact whatever weight
we deem ap-propriate in deciding these cases.
                               - 3 -

provide supporting information."    According to Mr. Stolmar, he

was never contacted prior to the respective dates on which the

notices were issued, and therefore the statements in the notices

about petitioners' failure to provide "supporting information" to

respondent with respect to the expenses claimed in Schedules C of

the returns in question are false.     Mr. Stolmar claims that,

consequently, the notices are null and void.

     We disagree.   Regardless whether respondent requested "sup-

porting information" with respect to the Schedule C expenses at

issue before the notices were issued, a trial before this Court

is a proceeding de novo, and our determination as to Mr.

Stolmar's tax liability must be based on the merits of these

cases and not on any record developed at the administrative

level.   Greenberg's Express, Inc. v. Commissioner, 62 T.C. 324,

328 (1974).   We conclude that the notices are valid and are not

null and void.   See id.

     Mr. Stolmar has the burden to show that respondent's deter-

minations in the notices are wrong.     Rule 142(a); Welch v.

Helvering, 290 U.S. 111, 115 (1933).     Moreover, deductions are

strictly a matter of legislative grace, and Mr. Stolmar must meet

the statutory requirements for the Schedule C expense deductions

claimed in the returns in question.     INDOPCO, Inc. v. Commis-

sioner, 503 U.S. 79, 84 (1992).    Mr. Stolmar has not provided

this Court with any evidence showing his entitlement to the

Schedule C expense deductions that remain at issue or proving
                              - 4 -

that any of the other determinations in the notices that were not

conceded by respondent are wrong.4    Accordingly, we shall sustain

all of the determinations in the notices except those conceded by

respondent.

     To reflect the foregoing and the concessions of respondent,

                                      Decisions will be entered

                              under Rule 155.




     4
        Although the parties stipulated into the record a copy of
Mr. Stolmar's checkbook register for 1994, that document does not
establish that any of the entries therein was for an expenditure
that is deductible for Federal income tax purposes.
