Accordingly, the IRS disallowed the gambling loss deductions claimed by the taxpayer on Schedule A of his 1989 and 1992 returns. In its opinion, the court reaffirms the point of law that in income tax matters, the burden of proof is on you. This taxpayer did nothing to prove that he had sustained losses, other than his own testimony. The following excerpts from the case transcript highlight the logic applied by the court. Respondent determined that petitioner failed to substantiate deductions that he claimed for gambling losses on his 1989 and 1992 income tax returns.
Petitioner bears the burden of proving error in respondent's determination.
Specifically, petitioner bears the burden of establishing that he sustained the gambling losses that he claimed on his 1989 and 1992 income tax returns. If the trial record provides sufficient evidence that a taxpayer has incurred a deductible expense, but the taxpayer is unable to adequately substantiate the amount of the deduction to which he or she is otherwise entitled, the Court may, under certain circumstances, estimate the amount of such expense and allow the deduction to that extent. However, in order for the Court to estimate the amount of an expense, we must have some basis upon which an estimate may be made. Without such a basis, any allowance would amount to unguided largesse. We recognize that petitioner must have sustained some losses in view of his substantial gambling activity.