1 Unless otherwise indicated, all section references are

to the Internal Revenue Code in effect for the taxable year in

T.C. Memo. 1997-516

UNITED STATES TAX COURT

BRETT W. BARNES, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 23024-95. Filed November 17, 1997.

Brett W. Barnes, pro se.

Ladd C. Brown, for respondent. 

MEMORANDUM OPINION

DINAN, Special Trial Judge: This case was heard pursuant

to the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1
- 2 -

issue. All Rule references are to the Tax Court Rules of

Practice and Procedure.

 

2 The itemized deductions claimed include a medical

expense deduction in the amount of $689, a charitable

contribution deduction in the amount of $1,010, and miscellaneous

itemized deductions in the total amount of $11,014, which include

employee business expenses and tax preparation fees.

Respondent determined a deficiency in petitioner's Federal

income tax for 1992 in the amount of $2,548 and an accuracyrelated penalty pursuant to section 6662(a) in the amount of

$510.

The issues for decision are: (1) Whether petitioner is

entitled to itemized deductions in excess of the standard

deduction allowed by respondent; and (2) whether petitioner is

liable for the section 6662(a) accuracy-related penalty.

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

The stipulations of fact and attached exhibits are incorporated

herein by this reference. Petitioner resided in Miami, Florida,

on the date the petition was filed in this case.

Petitioner worked as a car salesman during 1992. The

apartment building in which he lived during 1992 was damaged by

hurricane Andrew in August 1992. He alleges that all records

that he maintained with respect to his 1992 taxable year were

destroyed by hurricane Andrew.

On his 1992 return, petitioner claimed itemized deductions

in the total amount of $12,713.2 In the statutory notice of

deficiency, respondent disallowed petitioner's claimed itemized
- 3 -

deductions and allowed him a standard deduction in the amount of

$3,600 for an individual filing as an unmarried individual.

Petitioner's case was first called for trial on October 8,

1996. Since the parties had not executed stipulations of fact,

the Court ordered that the case be continued to allow petitioner

the opportunity to stipulate all documentary and written evidence

in support of his claimed itemized deductions in accordance with

the Court's standing pretrial order and Rule 91(a).

On June 10, 1997, this case was again called for trial. In

the interim, respondent had advised petitioner to get copies of

doctor and hospital bills, canceled checks, and credit card

statements. At trial, petitioner acknowledged that he received

respondent's letter but admitted that he took no action to obtain

such records.

Respondent's determinations in the statutory notice of

deficiency are presumed to be correct, and petitioner bears the

burden of proving otherwise. Rule 142(a); Welch v. Helvering,

290 U.S. 111, 115 (1933). In deciding whether this burden is

satisfied, the Court is not bound to accept petitioner's selfserving, unverified, and undocumented testimony. Wood v.

Commissioner, 338 F.2d 602, 605 (9th Cir. 1964), affg. 41 T.C.

593 (1964); Niedringhaus v. Commissioner, 99 T.C. 202, 219-220

(1992); Tokarski v. Commissioner, 87 T.C. 74, 77 (1986); Hradesky

v. Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam 540 F.2d

821 (5th Cir. 1976). Taxpayers are required to substantiate
- 4 -

amounts claimed as deductions, credits, etc., by maintaining the

records needed to establish such entitlement. Sec. 6001; sec.

1.6001-1(a), Income Tax Regs.

Petitioner has failed to meet his burden of proof. Rule

142(a). His testimony in response to the question of how he

calculated the deductions claimed on his return was vague and

incoherent. He stated at one point that he relied upon "a lot of

credit card statements" in preparing his return. However, since

hurricane Andrew hit Florida in August 1992, the records that he

purportedly relied upon could not have been destroyed by the

hurricane because his return was not prepared until March 1993. 

Nonetheless, such records were not presented at trial. Moreover,

even if we were to accept petitioner's representation that he

maintained records that were destroyed by hurricane Andrew, he

has failed to cooperate with respondent or obtain any copies of

receipts, checks, or credit card statements to substantiate his

claimed itemized deductions, despite the Court's order to do so

at the time we granted the continuance of his case on October 8,

1996.

In the event that a taxpayer establishes that he has paid a

deductible expense, but is unable to substantiate the precise

amount of the expense, we may estimate the amount of the

deductible expense. Cohan v. Commissioner, 39 F.2d 540, 543-544

(2d Cir. 1930). In order to make such an estimate, the taxpayer

must present evidence sufficient to provide some rational basis
- 5 -

upon which an estimate may be made. Vanicek v. Commissioner, 85

T.C. 731, 743 (1985).

Petitioner has not provided the Court with any evidence that

would allow us to make an estimate of his deductible expenses

under the Cohan rule. Therefore, we hold that he is not entitled

to itemized deductions for 1992 in excess of the standard

deduction allowed by respondent.

The second issue for decision is whether petitioner is

liable for the section 6662(a) accuracy-related penalty for 1992. 

Respondent's determination of negligence is presumed to be

correct, and petitioner bears the burden of proving that the

penalty does not apply. Rule 142(a); Welch v. Helvering, 290

U.S. 111, 115 (1933); Bixby v. Commissioner, 58 T.C. 757, 791-792

(1972).

Section 6662(a) imposes a 20-percent penalty on the portion

of the underpayment attributable to any one of various factors,

one of which is negligence or disregard of rules or regulations.

Sec. 6662(b)(1). Respondent determined that petitioner is liable

for the accuracy-related penalty imposed by section 6662(a) for

his underpayment of tax in 1992, and that such underpayment is

due to negligence or disregard of rules or regulations.

"Negligence" includes a failure to make a reasonable attempt to

comply with the provisions of the Internal Revenue laws or to

exercise ordinary and reasonable care in the preparation of a tax

return. Sec. 6662(c); sec. 1.6662-3(b)(1), Income Tax Regs. 
- 6 -

"Disregard" includes any careless, reckless, or intentional

disregard of rules or regulations. Sec. 6662(c); sec.

1.6662-3(b)(2), Income Tax Regs.

Section 6664(c)(1), however, provides that the penalty under

section 6662(a) shall not apply to any portion of an

underpayment, if it is shown that there was reasonable cause for

the taxpayer's position with respect to that portion and that the

taxpayer acted in good faith with respect to that portion. The

determination of whether a taxpayer acted with reasonable cause

and in good faith is made on a case-by-case basis, taking into

account all the pertinent facts and circumstances. Sec.

1.6664-4(b)(1), Income Tax Regs. The most important factor is

the extent of the taxpayer's effort to assess his proper tax

liability for the year. Id.

The following dialogue at trial concerning petitioner's

failure to substantiate his medical expenses for 1992 illustrates

his lack of effort to assess his proper tax liability:

Q Did you, in fact, contact any doctor or hospital to

get such records?

A I went to contact somebody, and they told me that I

needed to come in and go through the process of going

and doing the microfilms or whatever. And I just --

didn't go. No.

Based on the record, we find that petitioner has not proved

that his underpayment was due to reasonable cause or that he
- 7 -

acted in good faith. Accordingly, we hold that petitioner is

liable for the section 6662(a) accuracy-related penalty as

determined by respondent.

To reflect the foregoing,

Decision will be entered

for respondent.