T.C. Mem o. 2 01 4- 20 3

UNITED STAT ES TAX COURT

THAD DE SHAW

N SMITH, Pet it io ne r v. COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 61 95 -1 3. Fi le d Oct ob er 2 , 20 14 .
Tha d Des ha wn Sm ith, p ro se. Nan cy M. Gil m or e, fo r res po nd en t.

MEMORANDUM FINDINGS OF FACT AND OPINION LAUBER, Ju dg e: W ith re sp ectto pe ti ti on er’s Fed eral in co m e ta x fo r 20 09 , th e In te rn al Rev enue Serv ic e (IR S o r res po nd en t) d et erm in eda de fic ie nc y of- 2 -

[* 2] $9 ,40 5 b as edon di sa ll owe d i te miz edde du ct io ns an d asec ti on66 62 (a) 1
accu racy-rela te d p en al ty of $1 ,88 1. Th e p art ie s n ow ag ree t ha t p et it io ne r is en ti tl edto it em iz edde du ct io ns of $ 4,6 19 forSta te an d l oc al tax es , $1 5,2 75 for ho m e m ortg ag e in te res t, an d $ 49 0 fo r no nc as h c ha rit ab le co nt rib ut io ns . The is su es forde ci si on are: (1) whet he r pe ti ti on er i s en ti tl edto anad di ti on al de du ct io n o f $2 7,2 77 forno nc as h c ha rit ab le co ntrib ut io ns (we h ol d tha t h e is no t); an d (2 ) whe th er p et it io ne r is li ab le forth e acc ur acy-rela te d p en al ty (we ho ldth at he is ). FINDINGS OF FACT So m e o f th e fac ts ha ve be enst ip ul at edan d a re s o fo un d. Th e st ip ul at io n o f fact s an d t he att ach edex hi bi ts are i nc or po rat edhe rei n b y

th is refe ren ce. Pet it io ne r res id edinMarylan d wh enhe fil edhi s p et it io n. Pet it io ne r ti m el y

fil eda Fed eral in co m e ta x re tu rnfor20 09 on whi chhe cl ai m edit em iz edde du ct io ns of $ 52 ,81 0. Onau di t, the IRS d et erm in edth at $3 5,2 38 of t he se de du ct io ns sh ou ldbe di sa ll owe d fo r la ckof s ub st an ti at io n. Whi le th e cas e was be in g c on si de redby the IRS Ap pe al s Off ic e, pe ti ti on er s ub
m it te d a n a m en de d 2 00 9 re tu rnon whi chhe in crea se d h is cla im edde du ct io n fo r All st atut ory

refe ren ces are t o t he Int ern al Rev enue Co de as i n e ffec t fo r th e 1 ta xabl e y ear i n i ss ue . All R ul e ref eren ces are t o t he Tax C ou rt R ul es of P ract ic e an d P ro cedur e. W e ro un d a ll m on et ary am ou nt s t o the ne ares t d ol lar.- 3 -

[* 3] no nc as h c ha rit ab le co nt rib ut io ns fro m $4 90 to $2 7,7 67 . This ad di ti on al de du ct io n i s b as edon pe ti ti on er’s al le ge d c on tri bu ti onof c lo th es an d h ou se ho ld it em s t o t he Am eri canVete ran s Nat io na l Se rv ic e Fo un da ti on (AMVETS), an or ga ni zat io n e li gi bl e to rece iv e ta x- de du ct ib le co nt rib ut io ns un de r se ct io n 17 0( c)(3 ). 2 Pet it io ne r’s m ot he r di edin te st at e in Ju ly 200 9. Pe ti ti on er’s fat he r, inhi s gr ie f, as ke d p et it io ne r to tak e ev erythi ng ou t o f th e fam il y ho us e in Norf

ol k, Virg in ia . Peti ti on er t es ti fie d t ha t h e d on at edm os t o f th es e it em s t o AM VETS. The se it em s al le ge dl y

in cl ud edsev enso fas , fou r te le vi si on s, fi ve be dr oo m set s, s ix
m at tre ss es , a ki tc he n s et , a di ni ng roo m set , a ch in a cab in et , andth ree rug s. Fo r ch ari tabl e co nt rib ut io n p ur po se s, p et it io ne r pl aceda va lu e o f $1 1,7 30 onth es e it em s. Pet it io ne r te st ifi edth athe als o d on at edto AMVETS du rin g 2 00 9 n um ero us it em s o f cl ot hi ng be lo ng in g t o h im an d h is ch il dr en . Thes e it em s al le ge dl y in cl ude d 1 80 sh irt s, 6 3 p ai rs of s la ck s, 1 53 pa irs of jeans , 17 3 p ai rs of s ho es , 51

The IRS d idno t ad dr es s thi s ad di ti on al cla im edde du ct io n i n t he no ti ce o f 2 de fic ie nc y , bu t p et it io ne r rai se d i t as anaffi rm at iv e is su e in hi s p et it io n, an d we th eref or e h av e juri sd ic ti on to co ns id er i t. See , e.g., Naft el v. Co m mis si on er, 8 5 T.C. 52 7, 5 33 (19 85 ).- 4 -

[* 4] dr es se s, 3 5 s weat ers , ni ne ov erco at s, an d s ev ensu it s. Fo r ch ari tabl e co nt rib ut io n p ur

po se s, p et it io ne r pl aceda va lu e o f $1 4,4 87 on th es e it em s. Fi na ll y , pet it io ne r te st ifi edth athe do na te d t o AM VETS du rin g 2 00 9 e le ctro ni c equi pm en t tha t i nc lu de d t wo co m pu te r syste m s, a p rin te r, an d aco pi er. The reco rddo es no t es tabl is h wh o p rev io us ly owne d t hi s p ro pe rty. For ch ari tabl e co ntri bu ti on purp os es , pet it io ne r pl aceda va lu e o f $1 ,55 0 o n t he se it em s. Pet it io ne r te st ifi edth athe ha d v is it edAMVETS onsev eral oc cas io ns earl ie r in 20 09 an d h adob ta in eda nu m be r of bl an k “ ta x re cei pt s” si gn edby A MVETS rep res en ta ti ve s. Th e rec or d i nc lu de s two s uc h b la nkrece ip ts , on e si gn edby

“ Jo se ” an d t he ot he r si gn edby “Am ad o M .” Pet it io ne r te st ifi edth athe co ns ol id at edall of t he co nt rib ut io ns de sc rib edab ov e o n t he se two bl an k re cei pt s. He fi ll edou t ea chrece ip t b y id en ti fy in g h im se lf a s the “ do no r,” i ns ert in g Au gu st 30 , 20 09 , as the “ da te ,” an d i nd ic at in g t he do na ti on va lu es m en ti on edab ov e. One fil le d- ou t re cei pt , si gn edby “ Jo se ,” sh ows a “ to ta l d on at io n v al ue ” o f $2 7,7 67 . The othe r fi ll ed -o utrece ip t, s ig ne d b y “ Am ad o M ,” al so sh ows a “ to ta l d on at io n va lu e” o f $2 7,7 67 , bro ke n d own in to $1 4,4 87 for“ cl ot hi ng ” an d $ 13 ,28 0 fo r

“ no n- cl ot hi ng .” Neit he r ta x re cei ptid en ti fie s an y sp eci fic it em s o f do na te d p ro pe rty. T o id en ti fy th e p ro pe rty he al le ge dl y co nt rib ut ed , pet it io ne r pr oduc eda sp read sh eet ,- 5 -

[* 5] pr ep aredby him , cap ti on ed“ Tha d S m ith 2 00 9 Tax Dedu ct io ns .” The re co rd do es no t es tabl is h wh enth is sp read sh eetwas p rep ared , andth ere i s n o e vi de nc e th atitwas s ub mitte d t o AM VETS. The tax rece ip ts st at e th at“ [a]ll it em s d on at edto AMVETS are d educ ti bl e fo r in co m e ta x p ur

po se s atth ei r pr es en t Fa ir M ark etValu e.” The y als o i nf orm th e do no r th atitis hi s re sp on si bi li ty to d et erm in e th e fai r m ark etva lu es of a ll it em s. Inde te rm in in g t ha t the it em s l is te d o n h is sp read sh eetha d afai r m ark etva lu es of $2 7,7 67 , pet it io ne r te st ifi edth athe us eda Sal va ti onArm y W eb si te th atli st s es ti
m at ed“ lo w” an d “ hi gh ” v al ue s fo r us edpro pe rty. The re co rdin cl ud es a “ Don at io n Val ue Gui de ” (g ui de ) pr in te d fr om th e Sal va ti on Arm

y Fam il y Sto res W eb si te on Apri l 2 , 20 14 . The v al ue s tha t pe ti ti on er p la cedon hi s s pr ead sh eetform an y of t he it em s h e al le ge dl y do na te d i n 20 09 are co ns id erab ly hig he r th anth e “ hi gh ” v al ue s s ho wn i n t hi s g ui de for it em s do na te d i n 2 01 4. Fo r a m en ’s sh irt , th e g ui de sh ows a lo w val ue of $ 2.5 0 a ndhi gh va lu e o f $1 2; pe ti ti on er p la ceda va lu e o f $1 5 o n a ll 77 m en ’s sh irt s tha t h e al le ge dl y do na te d. Fo r a p ai r of

sl ack s, the gu id e sh ows a lo w val ue of $ 5 a nda hi gh va lu e o f $1 2; pe ti ti on er p la ceda va lu e o f $1 8 o n a ll 63 pa irs of s la ck s tha t h e al le ge dl y do na te d. Pe ti ti on er o ffer edno ex pl an at io n fo r th is di sc rep an cy . Peti
ti on er d idno t t ak e p ho to gr ap hs of a ny of th e it em s h e al le ge dl y do na te d, an d h e- 6 -

[* 6] in tro du cedno ev id en ce t o e st ab li sh th ei r co nd it io n. He d idno t o bt ai n a n ap pr ai sa l o f an y

it em . Pet it io ne r en ga ge d a t l eas t two d iff eren t t ax return p rep arer s o ve r th e y ears . Bec au se he was i n t he m il it ary an d t rav el edoft en , th es e in di vi du al s g en eral ly prepa redan d fi le d h is Fed eral in co m e ta x re tu rn s wi th ou t h is rev ie win g t he m . Peti
ti on er ac kn owl ed ge d t ha t h is ori gi na l re tu rnfor20 09 ha d c la im edde du ct io ns to whi chhe was n oten ti tl ed . After the IRS co m m en cedth e au di t o f th atreturn, pe ti ti on er h ire d ane w return p rep arerto pre pa re an d fi le anam en de d 2 00 9 re tu rn , whi chcla im edth e ad di ti on al de du ct io n o f $2 7,7 67 forpro pe rty all eg ed ly co nt rib ut edto AMVETS. Neithe r return p rep arer tes ti fie d a t tria l. OPINION I. Bu rd enof P ro of The Co m m is si on er’s d et erm in at io ns ina no ti ce o f de fic ie nc y are g en eral ly pr es um edco rrec t, an d t he tax pa y er b ears th e b ur de n o f pr ov in g tho se de te rm ina ti on s erro ne ou s. Ru le 14 2( a); W el chv. Hel ve rin g, 2 90 U.S. 11 1, 1 15 (19 33 ). Deduc ti on s ar e a m at te r of leg is la ti ve gra ce; th e ta xp ay er m us t d em on st rat e h is en ti tl em en t t o d educ ti on s al lo wedby the Co de an d s ub st an ti at e th e am ou nt s o f cl ai m edde du ct io ns . INDOPCO, Inc . v. Co m m is si on er, 5 03 U.S. 79 , 84 (19 92 ); se c. 1.6 00 1- 1( a), In co m e Tax Reg s. Pet it io ne r do es no t co nt en d t ha t the bu rd enof- 7 -

[* 7] pr oo f as to an y

factua l i ss ue sh ou ldsh iftto res po nd en t u nd er s ect io n 7 49 1( a). He th us be ars th e b ur de n o f pr ov in g h is en ti tl em en t t o the no nc as h c ha rit ab le co ntri bu ti on de du ct io ns cla im edonhi s amend ed20 09 return. II. Ch ari tabl e Co nt rib ut io ns A. St atut ory

Fram ewo rk Sect io n 1 70 all ows as ade du ct io n a ny char it ab le co nt rib ut io n m ad e wit hi n th e ta xabl e y ear t o s pe ci fie d e nt it ie s, i nc lu di ng war v et eran s o rg an iz at io ns . Sec. 17 0( a)(1 ), (c)( 3) . Suc h d educ ti on s ar e al lo wab le on ly if th e ta xp ay er s at is fie s st atut ory an d re gu la to ry

subs ta nt ia ti on requi rem en ts . See s ec. 1 70 (a)( 1) ; s ec. 1.1 70 A-1 3, In co m e Tax Reg s. Th e n atur e o f th e requi redsubs tant iati on de pe nd s on th e si ze o f th e co nt rib ut io n a ndon whet he r itis a gi ft o f cas h o r pr op erty . For al l co nt rib ut io ns of $ 25 0 o r m or e, th e ta xp ay er m us t o bt ai n aco nt em

po ran eo us writ te n a ckno wled gm en t fr om th e d on ee. Sec . 17 0( f)(8 ). Add it io na l s ub st an ti at io n re qu ire m en ts are i m po se d fo r co nt rib ut io ns of p ro pe rty with a cl ai m ed va lu e ex ceed in g $ 50 0. Se c. 17 0( f)(1 1) (B). St il l m or e ri go ro us subs ta nt ia ti on requi rem en ts are i m

po se d fo r co nt rib ut io ns of p ro pe rty with a cl ai m edva lu e ex ceed in g $ 5,0 00 . Sec. 1 70 (f)(1 1) (C). Fo r co ntrib ut io ns inex ces s o f $2 50 bu t l es s tha n (o r equa l t o) $5 00 , each co nt rib ut io n i s treat edsep arat el y forpu rp os es of d et erm in in g wh atsubs ta nt ia ti on- 8 -

[* 8] is requi red . See s ec. 1 .17 0A- 13 (f)(1 ), In co m e Tax Reg s. Fo r co nt rib ut io ns ex ceed in g $ 50 0, “ si m il ar i te m s o f pr op erty ” are ag gr eg at edinm ak in g t hi s de te rm in at io n. Se c. 17 0( f)(1 1) (F) (“ Fo r pu rp os es of d et erm in in g thr es ho ld s u nd er th is pa rag rap h, p ro pe rty andall si m il ar i te m s o f pr op erty do na te d t o 1 or m or e do ne es sh al l b e tr eat edas 1 pro pe rty.”); s ec. 1 .17 0A- 13 (c)( 1) (i) , Inc om e Tax Reg s. The term “ si m il ar i te m s o f pr op erty ” is de fin edto m ean“pr op erty of t he same ge ne ric cat eg ory

or t y pe ,” su chas c lo th in g, jewel ry , furni tu re, el ectro ni c equi pm en t, h ou se ho ldap pl ia nc es , or k it ch en ware. Sec . 1.1 70 A-1 3( c)(7 )(i ii ), In co m e Tax Reg s. B. Ana lysis Pet it io ne r co nt en ds th athe do na te d p ro pe rty to AM VETS onAug us t 3 0, 20 09 , with acla im edva lu e o f $2 7,7 67 . Becau se th e v al ue of t he cla im edco ntri bu ti on ex ceed s $ 50 0, we m us t ag gr eg at e “ si mil ar i te m s o f pr op erty ” to de te rm in e wha t s ub st an ti at io n was requi red . Peti ti on er’s s el f-cr eat edsp read sh eet sh ows th ree c at eg or ie s o f si m il ar i te m s: clo th in g wi th anall eg edva lu e o f $1 4,4 87 ; h ou se ho ldfurni tu re wi th anall eg edva lu e o f $1 1,7 30 ; an d e le ctro ni c equi pm en t wi th anall eg edva lu e o f $1 ,55 0. Fo r al l thr ee ca te go rie s o f it em s, pe ti ti on er m

us t m eetth e subs ta nt ia ti on requi rem en ts im po se d b y sec ti on17 0( f)(8 )- 9 -

[* 9] an d (1 1) (B). Fo r th e fi rs t two ca te go rie s o f it em s, p et it io ne r m us t al so m eet th e st ric te r subs tant ia ti on requi rem en ts im po se d b y sec ti on 17 0( f)(1 1) (C). 1. Co nt rib ut io ns of $ 25 0 o r Mo re Sect io n 1 70 (f)(8 )(A) p ro vi de s tha t an in di vi du al m ay de du cta gi ft o f $2 50 orm or e o nl y

if h e subs ta nt ia te s the de du ct io n wi th“ a co nt em po ran eo us writ te n ackno wled gm en t o f th e co nt rib ut io n b y th e d on ee o rg an iz at io n.” See Weyts v. Co m m is si on er, T.C. Mem o. 2 00 3- 68 (di sc us si ng leg is la ti ve hi st ory of t hi s p ro vi si on ). Thi s ac kn owl ed gm en t m us t: (1) in cl ud e “ a d es cri pt io n (b utno t v al ue ) of an y pro pe rty oth er tha n c as h c on tri bu te d” ; (2 ) st at e whe th er the do ne e p ro vi de d an y go od s o r se rv ic es inex ch an ge forth e g ift ; an d (3 ) if th e d on ee d idpro vi de go od s o r se rv ic es , in cl ud e a d es cri pt io n a ndgo od -fai th est im at e o f th ei r va lu e. Sec. 1 70 (f)(8 )(B) ; s ec. 1 .17 0A- 13 (f)(2 ), In co m e Tax Reg s. Th e ackno wled gm en t is “ co nt em

po ran eo us ” if

th e ta xp ay er o bt ai ns itfro m th e d on ee o n o r be fo re the earl ie r of : (1 ) th e d at e th e ta xp ay er fi le s a r eturn fo r th e y ear o f co nt rib ut io n; or (2 ) th e due date , in cl ud in g e xt en si on s, fo r fi li ng th atreturn. Se c. 17 0( f)(8 )(C) . Pet it io ne r ob ta in edbl an k s ig ne d fo rm s fr om AMVETS an d l at er fi ll edth em ou t h im se lf b y

in se rti ng supp os eddo na ti on va lu es . Becau se th es e fo rm s wer e si gn edbe fo re the pro pe rty was al le ge dl y do na te d, we que st io n wh ethe r th ey co nst itut e an“ ackno wled gm en t” by A MVETS th atitrece iv edan yth in g. Co m pa re- 10 -

[* 10 ] se c. 1.1 70 A-1 3( f)(1 ), In co m e Tax Reg s. (r equi rin g “ a co nt em po ran eo us writ te n a ckno wled gm en t fr om th e d on ee o rg an iz at io n” forco nt rib ut io ns of $ 25 0 orm or e), wit h s ec. 1 .17 0A- 13 (b )(1 ), In co m e Tax Reg s. (r ecei ptno t re qu ire d fo r sm al le r co ntrib ut io ns “ whe re i t i s i m pr act ic al to ob ta in a rece ip t (e .g., b y de po sit in g p ro pe rty at a ch ari ty’ s u na tt en de d dro p s it e)”) . Inan y ev en t, the AMVETS tax rece ip ts do no t co nt ai n a“ de sc rip ti on * * * of an y pro pe rty * * * co nt rib ut ed .” Sec. 1 70 (f)(8 )(B) (i) . Rath er, p et it io ne r crea te d, ata ti m e th atcan no t b e as cert ai ne d, a s pr ead sh eetsh owi ng th e p ro pe rty he all eg ed ly con tri bu te d, an d t he re i s n o e vi de nc e th atth is sp read sh eetwas e ve r pr ov id edto or s eenby A MVETS. Mo reo ve r, th e o nl y ev id en ce as to th e co nt em po ran ei ty of th e ackno wled gm en t i s the da te --Au gu st30 , 20 09 --wh ic h pe ti ti on er p la cedon th e b lankrece ip ts hi m se lf. Th is ev id en ce i s n otsu ffi ci en tl y pe rs ua si ve to sat is fy

hi s b ur de n o f pr oo f. See Br ownv. Co m m is si on er, T.C. Mem o. 1 98 0- 55 3, 4 1 T.C.M . (CCH) 5 42 . Peti ti on er h as th eref or e fai le d t o s at is fy th e “ co nt em

po ran eo us writte n a ckno wled gm en t” requi rem en t fo r subs ta nt ia ti on of co nt rib ut io ns of $ 25 0 o r m or e.

2. Co nt rib ut io ns Exce ed in g $ 50 0 Altho ug h p et it io ne r’s fai lu re t o s at is fy th e subs tant ia ti onrequi rem en ts for co nt rib ut io ns of $ 25 0 o r m or e is fat al to hi s cl ai m of a n a dd it io na l d educ ti on , we- 11 -

[* 11 ] wil l b rie fly addres s, fo r sake of c om pl et en es s, the othe r ap pl ic ab le subs ta nt ia ti on requi rem en ts . For n on cas h c on tri bu ti on s i n e xc es s o f $5 00 , ta xp ay ers are re qu ire d t o m ai nt ai n re li ab le writ te n re co rd s wi th res pe ctto each it em of d on at edpro pe rty. Sec. 1.1 70 A-1 3( b) (2 ) an d (3 ), In co m e Tax Reg s.; see Gaert tn er v . Comm is si on er, T.C. Mem o. 2 01 2- 43 . Thes e rec or ds m us t i nc lu de , am on g o th er thi ng s: (1) th e ap pr ox im at e d at e th e p ro pe rty was acqui redan d t he
m an ne r of

it s ac qu is it io n; (2) a de sc rip ti onof t he pro pe rty in d et ai l re as on ab le un de r th e ci rcu m st an ces ; (3 ) th e co stor o th er b as is of the pro pe rty; (4 ) th e fai r m ark etva lu e o f th e p ro pe rty at th e ti m e itwas c on tri bu te d; an d (5 ) th e m etho d us edinde te rm in in g i ts fai r m ark etva lu e. Sec. 1 .17 0A- 13 (b )(2 )(i i)( C) an d (D) , (3 )(i )(A) an d (B ), In co m e Tax Reg s. Th e ta xp ay er m us t i nc lu de with h is return “ a de sc rip ti on of s uc h p ro pe rty andsu chot he r in fo rm at io n a s the Secr et ary m ay requi re.” Se c. 17 0( f)(1 1) (B). Pet it io ne r al le ge dl y

m ad e n on cas h c on tri bu ti on s t o AM VETS of cl ot hi ng , furn itur e, an d e le ctro ni c equi pm en t, an d fo r eac h c at eg ory of i te m s h e cl ai m eda va lu e ex ceed in g $ 50 0. Bu t h e d idno t m ai nt ai n wri tt enreco rd s es tabl is hi ng when orho w th es e it em s wer e acqui redor wh atth ei r co stba se s wer e. (The clo th in g ap pe ars to ha ve be enpu rch as ed ; the furni ture m ay ha ve be enacqui redby giftor in he rit an ce; an d t he ele ctro ni c equi pm en t i s o f un kn own pro ve na nc e.) Nor di d- 12 -

[* 12 ] pe ti ti on er m ai nt ai n wri tt enreco rd s es tabl is hi ng th e it em s’ fai r m ark etva lu es atth e ti m e th ey

were d on at ed . He tes ti fie d tha t h e d et erm in edth es e v al ue s u si ng a gu id e fro m

a Sal va ti on Arm

y W eb si te , bu t the va lu es he us edwere co ns id erab ly hi gh er tha n t he “ hi gh ” v al ue s the gu id e d is pl ay s. He d idno t m ai nt ai n p ho to gr ap hs orot he r rec or ds to est ab li sh th e co nd it io n o f th e d on at edit em s, an d h e h as thus pr ov id edno reas on to be li ev e th ateach do na te d i te m sh ou ldbe acco rd eda “ hi gh ” rathe r th ana “ lo w” va lu e. No d educ ti onis all owe d fo r co nt rib ut io ns of c lo th in g o r “ ho us eh ol d i te m s” un le ss su chit em s ar e “ in go odus edco nd it io n o r be tt er.” Se c. 17 0( f)(1 6) (A).

“ The term

‘ ho us eh ol d i te m s’ in cl ud es furni tu re, fu rn is hi ng s, el ectro ni cs , ap pl ia nc es , li ne ns , andothe r si m il ar i te m s.” Se c. 17 0( f)(1 6) (D). Mo stof t he it em s p et it io ne r al le ge dl y do na te d c on si st edof c lo th in g a ndho us eh ol d i te m s. He pr es en te d n o e vi de nc e th atth es e it em s wer e “ ingo odus edco nd it io n o r be tt er,” an d h e d idno t fu rn is h aqu al ifi edap pr ai sa l wi th hi s re tu rn . See s ec. 1 70 (f)(1 6) (C) (ex cep ti onwher e “ qu al ifi edap pr ai sa l” is supp li ed ). Forall th es e rea so ns , pe ti ti on er h as no t s at is fie d t he subs ta nt iati onrequi rem en ts for do na ti on s o f pr op erty va lu edinex ces s o f $5 00 . 3 Fai lu re t o m eetth e requi rem en t tha t the tax pay er m ai nt ai n re li ab le writ te n 3 reco rd s m ay

be ex cu se d i f hi s fa il ur e “ is du e to reas on ab le cau se an d n otwil lfu l (co nt in ue d...)- 13 -

[* 13 ] 3. Co nt rib ut io ns Exce ed in g $ 5,0 00 Fo r co ntrib ut io ns of p ro pe rty (othe r th anpubl ic ly trad edsec ur it ie s) or si mil ar i te m s o f pr op erty

va lu edinex ces s o f $5 ,00 0, the tax pa y er m us t g en eral ly sa ti sf y th e subs ta nt ia ti onrequi rem en ts di sc us se d p rev io us ly andm us t al so : (1 ) ob ta in a “ qu al ifi edap pr ai sa l” of t he it em s; an d (2 ) at ta chto hi s t ax return aful ly co m pl et edap pr ai sa l s umm ary. Sec. 1 70 (f)(1 1) (C); sec . 1.1 70 A-1 3( c)(2 ), In co m e Tax Reg s.; Jo rg en so n v . Comm is si on er, T.C. Mem o. 2 00 0- 38 (“ The IRS h as pr es cri be d F orm

82 83 [Non cas h C ha rit ab le Co nt rib ut io ns ] to be us edas t he ap pr ai sa l s umm ary. ”). The requi rem en ts fora “ qu al ifi edap pr ai sa l” are s etforth in se ct io n 1 .17 0A- 13 (c)( 3) (ii ), In co m e Tax Reg s. Th e requi rem en ts foranap pr ai sa l su m m ary are s etforth insec ti on 1.1 70 -1 3( c)(4 )(i i), In co m e Tax Reg s. Pet it io ne r ackno wled ge d t ha t h e d idno t o bt ai n aqu al ifi edap pr ai sa l fo r an y of t he it em s an d di d n otatt ach a fu ll y

co m pl et edap pr ai sa l s umm ary to hi s 2 00 9 t ax return. He thu s

(...co nt inue d) 3 ne gl ect .” Sec. 1 70 (f)(1 1) (A)(i i)( II); see als o Al li v. Co m m is si on er, T.C. Mem o. 20 14 -1 5, at*6 0. Th e b ur de n o f pr ov in g re as on ab le cau se is on th e ta xp ay er. Ru le 14 2( a). Pet it io ne r in tro du cedno ev id en ce tha t wo ul d e nabl e th is Co urt t o co nc lu de th athi s fa il ur e to m ai nt ai n wri tt enreco rd s was du e to reas on ab le cau se .- 14 -

[* 14 ] fai le d t o s at is fy

th e subs ta nt ia ti on requi rem en ts forhi s cl ai m edco nt rib ut io ns of clo th in g ($ 14 ,48 7) an d h ou se ho ldfurni tu re ($ 11 ,73 0) . 4 The Co urt h as no do ub t tha t p et it io ne r di d d on at e p ro pe rty to AM VETS in 20 09 . Qui te po ss ib ly, th e fai r m ark etva lu e o f th e p ro pe rty he d on at edex ceed ed th e $ 49 0 i n n on cas h c on tri bu ti on s cl ai m edon hi s o rig in al return, wh ic h the IRS al lo wed . Butth e Co de im po se s a s eri es of i nc reas in gl y rig or ou s s ub st an ti at io n requi rem en ts forlar ge r gi fts , esp eci al ly whe n t he y co ns is t o f pr op erty

rathe r th an cas h. Be cau se pe ti ti on er d idno t s at is fy th es e requi rem en ts , we are u nabl e to all ow an y po rti onof t he ad di ti on al de du ct io n t ha t h e cl ai m edon hi s amend ed20 09 return. III. Accu racy-Rel at edPen al ty Sect io n 6 66 2 i m

po se s a 2 0% p en al ty upo n t he po rti on of any un de rp aym en t at tri bu tabl e to (am on g o th er thi ng s) ne gl ig en ce o r di sr eg ardof r ul es or r eg ul at io ns . The term “ ne gl ig en ce” i nc lu de s an y fai lu re t o m ak e a rea so nabl e at te m ptto co m pl y with t he tax laws , and“ di sr eg ard ” in cl ud es an y care le ss , reck le ss , or in te nt io na l d is reg ard . Sec. 6 66 2( c). Neg li ge nc e al so in cl ud es an y fai lu re t o k eep Res po nd en t co nt en ds th atth e d educ ti on cla im edfordo na ti ng ho us eh ol d 4 furn itur e sh ou ldbe de ni edbe cau se pe ti ti on er h as no t p ro ve n t ha t h e (as op po se d t o hi s fa th er o r hi s m ot he r’s es ta te ) own edth e co nt en ts of t he fam il y ho m e in Norfo lk , Virg in ia . Becau se we co nc lu de th atpe ti ti on er’s cl ai m edde du ct io n m us t b e de ni edforlac k o f subs ta nt ia ti on , we nee d n otad dr es s thi s i ss ue .- 15 -

[* 15 ] ad equa te bo ok s an d re co rd s o r to subs ta nt ia te it em s p ro pe rly. Sec. 1.6 66 2- 3( b) (1 ), In co m e Tax Reg s.; see Oli ve v. Co m m is si on er, 1 39 T.C. 19 , 43 (20 12 ). W ith re sp ectto anin di vi du al tax pa y er’s l iabi li ty for a p en al ty, se ct io n 74 91 (c) p la ces on th e Co m mis si on er the bu rd enof p ro du ct io n, the reb y requi rin g th e Co m m is si on er t o c om e fo rwardwith s uf fic ie ntev id en ce i nd ic at in g t ha t im po si ti on of ape na lty

is ap pr op ria te . Hig be e v . Commis si on er, 1 16 T.C. 43 8, 44 6- 44 7 (2 00 1) . Once t he Co m m is si on er m eet s h is bu rd enof p ro du ct io n, the ta xp ay er b ears th e b ur de n o f pr ov in g t ha t the Co m m is si on er’s d et erm in at io n i s in co rrec t. Ib id .; s ee Ru le 14 2( a); W el chv. Hel ve rin g, 2 90 U.S. at 1 15 . The no ti ce o f de fic ie nc y

de te rm in edanaccuracy-rela te d p en al ty of $1 ,88 1 at tri bu tabl e to pe ti ti on er’s h av in g c la im edde du ct io ns forcas h c on tri bu ti on s, u nrei m bu rs edem

pl oyee bu si ne ss ex pe ns es , m ortg ag e in te res t “po in ts ,” an d o th er ex pe ns es forwhi chhe lac ke d s ub st an ti at io n. Pe ti ti on er ac kn owl ed ge d a t tria l tha t he ha d n o b as is forcla im in g m os t o f th es e d educ ti on s. Re sp on de ntha s the refo re di sc ha rg edhi s b ur de n o f pr oduc ti on . See s ec. 1 .66 62 -3 (b )(1 ), In co m e Tax Reg s. Sect io n 6 66 4( c)(1 ) pr ov id es anex cep ti onto th e im po si ti onof t he accu racyrel at edpe na lty

if the tax pa y er es tabl is he s tha t the re was reas on ab le cau se for , and th athe act edingo odfai thwith re sp ectto , th e und erp aym en t. A ta xp ay er m ay be ab le to de m on strat e rea so nabl e cau se an d g oo d fa ith b y sh owi ng rel ia nc e o n p ro -- 16 -

[* 16 ] fes si on al advi ce. Sec . 1.6 66 4- 4( b) (1 ), In co m e Tax Reg s. Alt ho ug h pe ti ti on er’s o rig in al 20 09 return app ears to ha ve be enpre pa redby a tax pro fes si on al , th atpe rs on di d n ottes ti fy at tria l. Pet it io ne r in tro du cedno ev id en ce o f th e p rep arer ’s qu al ifi cat io ns ; n o e vi de nc e th athe pro vi de d t he pre pa rer wi thall rel ev an t fa ct s; an d n o e vi de nc e th atth e p rep arerpro vi de d t ax advi ce o n wh ic h h e reas on ab ly reli ed . Peti ti on er adm it te d tha t h is ori gi na l 2 00 9 re tu rncla im ed de du ct io ns to whi chhe was n oten ti tl edan d t ha t h e d idno t ca refu ll y rev ie w th e return b efo re i t was fil ed . The “ rel ia nc e o n p ro fes si on al advi ce” d efen se to th e accu racy-rela te d p en al ty is n otav ai labl e in th es e ci rcu m st an ces . See Me traCh em Co rp . v. Co m

m is si on er, 8 8 T.C. 6 54 , 66 2 (1 98 7) . W e wil l ac co rd in gl y su st ai n res po nd en t’s i m

po si ti onof the sec ti on 66 62 (a) p en al ty. To re fle ctth e fo reg oi ng , Deci si on wil l b e en te red un de r Ru le 15 5.