MEMORANDUM FINDINGS OF FACT AND OPINION

CHIECHI, Judge: Respondent determined deficiencies in, and additions to, petitioners' respective Federal income tax (tax), as follows:

Petitioner Virginia L. Dimon

Petitioner Charles F. Dimon

The issues remaining for decision ² are:

(1) Did Mr. Dimon receive $ 127,970 of nonemployee compensation during 1996? We hold that he did.

2002 Tax Ct. Memo LEXIS 109">*110 (2) Is Mr. Dimon entitled to deduct for 1996 the Schedule C expenses that he is claiming? We hold that he is not.

(3) Is each petitioner liable for 1996 for the addition to tax under section 6651(a)(1)? We hold that each petitioner is so liable.

(4) Is each petitioner liable for 1996 for the addition to tax under section 6654? We hold that each petitioner is so liable.

FINDINGS OF FACT

Some of the facts have been stipulated and are so found. Other facts have been deemed admitted pursuant to Rule 90(c).

At the time they filed the respective petitions in these cases, Ms. Dimon and Mr. Dimon, who were married throughout the entire taxable year 1996, resided in Irvine, California.

Neither Ms. Dimon nor Mr. Dimon filed a tax return (return) for taxable year 1996. On January 10, 2002, petitioners provided to respondent an original, signed Form 1040, U.S. Individual Income Tax Return, for 1996 (unfiled Form 1040). Petitioners included Schedule C, Profit or Loss From Business (Schedule C), in that unfiled Form 1040. In Schedule C of the unfiled Form 1040 for 1996, petitioners indicated that during 1996 Mr. Dimon was the proprietor of an executive2002 Tax Ct. Memo LEXIS 109">*111 recruiting business. Schedule C of the unfiled Form 1040 for 1996 showed gross receipts of $ 127,970 and claimed expenses of $ 57,064.

Neither Ms. Dimon nor Mr. Dimon made any estimated or other tax payments for 1996 except for $ 94 which was withheld from Ms. Dimon's wages.

During 1996, Mr. Dimon received $ 127,970 in nonemployee compensation.

OPINION

Each petitioner ³ bears the burden of showing error in the determinations that remain at issue in the respective notices issued to them. ⁴ See Rule 142(a); Welch v. Helvering, 290 U.S. 111">290 U.S. 111, 290 U.S. 111">115 (1933). With respect to the deductions claimed in Schedule C of the unfiled Form 1040 for 1996, deductions are strictly a matter of legislative grace, and petitioners bear the burden of proving that they are entitled to any deductions claimed. INDOPCO, Inc. v. Commissioner, 503 U.S. 79">503 U.S. 79, 503 U.S. 79">84 (1992).

2002 Tax Ct. Memo LEXIS 109">*112 We turn first to the contention of Mr. Dimon that the $ 127,970 that he received during 1996 represented proceeds from the sale of a business, and not nonemployee compensation. On the record before us, we reject that contention. Mr. Dimon is deemed to have admitted pursuant to Rule 90(c) that the $ 127,970 that he received during 1996 was nonemployee compensation. In addition, Schedule C of the unfiled Form 1040 for 1996 that petitioners provided to respondent on January 10, 2002, showed that Mr. Dimon received during 1996 $ 127,970 in gross receipts from his Schedule C business. We are unwilling to accept Mr. Dimon's general, conclusory, and uncorroborated testimony at trial that those admissions are wrong. On the record before us, we find that Mr. Dimon has failed to satisfy his burden of showing that the $ 127,970 that he received during 1996 represented proceeds from the sale of a business, and not nonemployee compensation. ⁵

2002 Tax Ct. Memo LEXIS 109">*113 We turn next to Mr. Dimon's claim that he is entitled to the deductions claimed in Schedule C of the unfiled Form 1040 for 1996 that petitioners provided to respondent on January 10, 2002. To support that claim, Mr. Dimon relies on his general, conclusory, and uncorroborated testimony that he incurred the Schedule C expenses at issue and is entitled to deduct them. We are not required to, and we shall not, rely on that testimony. On the record before us, we find that Mr. Dimon has failed to satisfy his burden of establishing that he is entitled to any of the deductions at issue.

We turn finally to the additions to tax under sections 6651(a)(1) and 6654 that respondent determined in the respective notices issued to Ms. Dimon and Mr. Dimon. Respondent concedes that respondent has the burden of production under section 7491(c) with respect to those additions to tax and contends that respondent has satisfied that burden. On the record before us, we agree with respondent. ⁶ On that record, we find that respondent has satisfied respondent's burden of production under section 7491(c) with respect to the additions to tax at issue in these cases. Petitioners have the burden of establishing2002 Tax Ct. Memo LEXIS 109">*114 that they are not liable for those additions to tax. See Higbee v. Commissioner, 116 T.C. 438">116 T.C. 438, 116 T.C. 438">446-447 (2001). Mr. Dimon testified that he did not file a return for 1996 because some unidentified person advised him that the $ 127,970 that he received during 1996 represented proceeds from the sale of a business, and not earned income. We shall not rely on Mr. Dimon's general, conclusory, and uncorroborated testimony as to the reasons why he did not file a return for 1996 or pay estimated tax for that year. On the record before us, we find that petitioners have failed to show that they are not liable for the additions to tax under sections 6651(a)(1) and 6654 that respondent determined in the respective notices issued to them.

We have considered all of the contentions2002 Tax Ct. Memo LEXIS 109">*115 and arguments of petitioners that are not discussed herein, and we find them to be without merit and/ or irrelevant.

To reflect the foregoing,

Decisions will be entered under Rule 155.