1 Amounts are rounded to the nearest dollar.

T.C. Memo. 2004-114

UNITED STATES TAX COURT

VICTOR WOODS, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 13056-02. Filed May 11, 2004.

Victor Woods, pro se.

Thomas Yang, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

HAINES, Judge: Respondent determined a deficiency of $3,438

in petitioner’s Federal income tax for 1999.1 The issue to be

decided is whether petitioner is entitled to deduct his claimed

Schedule C expenses for 1999.
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FINDINGS OF FACT

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

The stipulation of facts and the attached exhibits are

incorporated herein by this reference. At the time he filed the

petition, petitioner resided in Bloomingdale, Illinois. 

Petitioner is a self-employed motivational speaker.

Petitioner filed his Federal tax return for 1999, reporting

$16,020 in gross receipts and claiming the following deductions

on Schedule C, Profit or Loss From Business:

Expense Amount

Car and truck expenses $5,781

Insurance (other than health) 984

Legal and professional services 1,000

Office expense 250

Rent or lease

 a. Vehicles, machinery, and equipment 900

 b. Other business property 1,524

Other expenses

 a. Telephone 1,500

 b. Business supplies 1,500

 c. Credit card payments 1,200

 d. Cellular telephone 1,250

Total 15,889

On May 14, 2002, respondent issued a notice of deficiency to

petitioner for 1999 determining an income tax deficiency of

$3,438 after denying petitioner’s claimed deduction for Schedule

C expenses. On August 12, 2002, petitioner timely filed a

petition with the Court disputing respondent’s determination.
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2 We need not decide whether the burden of proof shifts to

respondent under sec. 7491(a) because petitioner failed to comply

with respondent’s reasonable requests for information. In any

event, we decide this case on the basis of the preponderance of

evidence on the record. 

3 Unless otherwise indicated, section references are to the

Internal Revenue Code in effect for the year in issue. 

OPINION

Deductions are a matter of legislative grace, and a taxpayer

bears the burden of proving that he has complied with the

specific requirements for any deduction he claims.2 See INDOPCO,

Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice

Co. v. Helvering, 292 U.S. 435, 440 (1934).

Under section 162,3 a taxpayer may deduct all ordinary and

necessary expenses paid or incurred during the taxable year in

carrying on any trade or business, if the taxpayer maintains

sufficient records to substantiate the expenses. Sec. 162(a);

see sec. 6001; Deputy v. duPont, 308 U.S. 488, 495 (1940); sec.

1.6001-1(a), Income Tax Regs. However, traveling expenses and

expenses paid or incurred with respect to listed property, i.e.,

a passenger automobile, computer or peripheral equipment, and

cellular telephones, are deductible only if the taxpayer meets

the stringent substantiation requirements of section 274. See

sec. 274(d); sec. 280F(d)(4); Sanford v. Commissioner, 50 T.C.

823, 827 (1968), affd. 412 F.2d 201 (2d Cir. 1969); sec. 1.280F6T(b), Temporary Income Tax Regs., 49 Fed. Reg. 42713 (Oct. 24,
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1984). In addition, under section 280A(c)(1)(A), deductions

arising from the use of a dwelling unit that was used by the

taxpayer as a residence are generally disallowed unless the

taxpayer proves a portion of the dwelling unit was used

exclusively and regularly as his principal place of business or

satisfies another of the exceptions in section 280A(c). 

On April 22, 2003, petitioner was served with a pretrial

order. Before the trial, petitioner did not cooperate in

informal discovery by providing respondent with any documentary

or written evidence to substantiate his claimed expenses and did

not identify any potential witnesses. In addition, petitioner

made no effort to keep respondent informed of his current address

and telephone number. Petitioner did not sign a stipulation of

facts until the day of trial. The stipulation of facts did not

address any of the substantiation issues for petitioner’s claimed

Schedule C expenses.

During the trial, petitioner presented a July 14, 1999,

Chicago Tribune newspaper article that discussed petitioner’s

background and motivational speeches as an evidentiary

submission. Petitioner presented no admissible documentary

evidence to substantiate any of the claimed expenses and gave

vague and general testimony. 

As to section 274 expenses, petitioner testified that he

could recall car payments of approximately $450 per month. 
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However, petitioner failed to produce records or documents to

substantiate the mileage and the amount, time, and business

purpose of the expenses paid or incurred for the car. Petitioner

also failed to produce records or documents to substantiate any

business travel, computer or peripheral equipment, or a cellular

telephone. Consequently, petitioner is disallowed a deduction

for any of these expenses. See sec. 274(d); Shea v.

Commissioner, 112 T.C. 183, 187 (1999); Smith v. Commissioner, 80

T.C. 1165, 1171 (1983); Gaylord v. Commissioner, T.C. Memo. 2003-

273; Boler v. Commissioner, T.C. Memo. 2002-155; Wilson v.

Commissioner, T.C. Memo. 2001-301; sec. 1.274-5T, Temporary

Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985). 

With respect to section 280A expenses, petitioner made only

uncorroborated approximations. Petitioner testified that he

recalled the rent to be approximately $1,150 per month, estimated

electricity bills at an average of $80 per month, gas bills

estimated at $54 per month, and an estimated $200 per month for

telephone bills. Petitioner admitted that these expenses were

for his residence but also claimed he did business out of his

home. However, there is no evidence in the record that any part

of petitioner’s home was used exclusively and regularly for

business or otherwise qualifies for an exception from the general

rule of section 280A disallowing expenses of a dwelling unit used

by the taxpayer as a personal residence. Therefore, petitioner 
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is not entitled to deduct any of the expenses relating to the use

of his personal residence. See Strohmaier v. Commissioner, 113

T.C. 106, 111 (1999); Krist v. Commissioner, T.C. Memo. 2001-140;

Verma v. Commissioner, T.C. Memo. 2001-132; Tokh v. Commissioner,

T.C. Memo. 2001-45, affd. 25 Fed. Appx. 440 (7th Cir. 2001).

The only other testimony petitioner gave was about legal

expenses. Petitioner testified that he incurred legal expenses

in a custody battle for his daughter. When the Court informed

petitioner that those legal expenses were not business expenses,

petitioner testified that he had also incurred legal expenses

when he had contracts and documents related to his speaking

engagements reviewed by an attorney. Petitioner failed to

provide the Court with any evidence of the amounts paid for these

legal expenses or any of the remaining expenses. In addition,

petitioner did not provide the Court with a basis from which we

could make any estimate under Cohan v. Commissioner, 39 F.2d 540,

543-544 (2d Cir. 1930). Vanicek v. Commissioner, 85 T.C. 731,

742-743 (1985); see Edwards v. Commissioner, T.C. Memo. 2002-169;

Caralan Trust v. Commissioner, T.C. Memo. 2001-241. 

Therefore, we hold that petitioner is not entitled to 

deduct any of the Schedule C expenses he claimed for 1999.
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 In reaching our holding herein, we have considered all

arguments made, and, to the extent not mentioned above, we

conclude that they are irrelevant or without merit.

Decision will be

entered for respondent.