United States Court of Appeals

Fifth Circuit

FILED

February 16, 2005

Charles R. Fulbruge III

Clerk

In the

United States Court of Appeals

for the Fifth Circuit

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m 04-60507

Summary Calendar

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GARY LEE COLVIN,

Petitioner-Appellant,

VERSUS

COMMISSIONER OF INTERNAL REVENUE,

Respondent Appellee.

_________________________

Appeal from the United States Tax Court

m 11412-01

_________________________

Before DAVIS, SMITH and

DENNIS, Circuit Judges.

JERRY E. SMITH, Circuit Judge:*

Petitioner Gary Lee Colvin appeals a decision of the United States Tax Court, which

upheld the InternalRevenue Service’sfindings

of deficienciesin the tax reported on certain of

his returns. Finding no error, we affirm.

I.

Colvinlived ina condominiumdevelopment

during the tax years in question. It had 128

units were grouped into two “phases.” Colvin

* Pursuant to 5TH CIR. R. 47.5, the court has

determined that this opinion should not be published and is not precedent except under the limited

circumstances set forth in 5TH CIR. R. 47.5.4.
2

resided in Phase I.

Colvin perceived irregularitiesin the homeowners association’s adoption of a new governing document that he believed favored

Phase II owners over Phase I owners. He

claimed that when he approached the association’s board of directors to address his grievances, he was refused an opportunity to speak

and was harassed and threatened, and the

board refused to hand over any financial information related to the maintenance of Phase II.

Consequently, he filed several lawsuits against

the association, for which he incurred legal expenses in 1997 and 1998.

Colvin’s first lawsuit alleged fraud, suppression of facts, negligent misrepresentation,

libel, slander, abuse of process, and civilrights

abuses. He ultimately voluntarily dismissed

that suit and filed another against the association seeking specific performance regarding

maintenance and repairs, declaratory relief as

to the validity ofthe covenants, conditions and

restrictions, and an injunction to restrain the

association from making certain water and

sewage charges. The trial court denied his

claim for specific performance but ruled in his

favor with regard to finding certain of the

association’s covenants, conditions, and restrictions invalid.

Colvin is employed as a network engineer

and reported wages on histax returnsfrom his

employment with Daou Systems in 1997 and

Network Computing Device Inc. in 1997 and

1998. He also attached to his tax returns for

those years Schedules C, Profit or Loss from

Business, for “Colvin Business Services II.”

The Schedules C reported losses for both

years (with zero gross receipts for 1998) and

deductions for legal and professional service

expenses, including expenses related to the

litigation described above.

Some ofthe legalexpensesColvindeducted

related to the litigation against the association,

and others related to a suit in which he sought

to recover wages from a former employer.

Colvin’s mother, in preparing hisreturns, tried

to allocate the various legal expenses to the

suit against the employer and the litigation

against the association. But, because the

billing records from the attorney did not adequately describe the services performed, she

was unable to allocate the expenses.

On June 21, 2001, the Commissioner sent

Colvin a notice of deficiency stating that he

owed $1,918 for the 1997 tax year and $1,072

for the 1998 tax year. According to the notice, Colvin was not entitled to deduct any

legal expenses in 1997 or $6,435 of the claimed legal expenses in 1998, because he had failed to establish that he had incurred those expenses for ordinary and necessary business

purposes.

In July 2001, Colvin mailed amended returns for the tax years in question and a check

for $64. The Commissioner considered the

submission to be an offer in compromise and

refused to accept it. Colvin filed a petition in

the Tax Court seeking redetermination of the

deficiencies and challenging the Commissioner’srefusal to accept his amended returns.

The court rejected all of Colvin’s claims and

affirmed the deficiencies.

II.

Colvin argues that the Commissioner

abused his discretion in not accepting the

amended return. We disagree, because although the Commissioner has administratively

permitted their use, the filing of amended

returns is not a matter of right; there is no
3

statutoryprovision expressly authorizing them

to be filed.1 The acceptance of amended

returns is a matter of the Commissioner’s

discretion.2 Moreover, even if the Commissioner had a legal duty to accept the amended

return, it would have no impact on the deficiencies upheld bythe TaxCourt, because they

were issued before Colvin attempted to submit

his amended return, and amended returns do

not vitiate deficiencies that have already been

issued.3

III.

Colvin challenges the Tax Court’s finding

that the legal expenses he incurred in hislitigation against the homeowners association were

not deductible under InternalRevenue Code §

212, which provides:

 In the case of an individual, there shall be

allowed as a deduction all the ordinary and

necessary expenses paid or incurred during

the taxable yearSS

(1) for the production or collection of

income;

(2) for the management, conservation or

maintenance of property held for the

production of income; or

(3) in connection with the determination, collection or refund of any tax.

A taxpayer may not, under § 212, deduct legal

fees that are personal expenses. I.R.C.

§ 262(a).4 Under United States v. Gilmore,

372 U.S. 39, 49 (1963), we look to the origin

of the claim to determine whether the purpose

1 Baradacco v. Commissioner, 464 U.S. 386,

393 (1984) (“[T]he Internal Revenue Code does

not explicitly provide either for a taxpayer’s filing,

or for the Commissioner’s acceptance, of an

amended return; instead, an amended return is a

creature of administrative origin and grace.”);

Evans Cooperage Co. v. United States, 712 F.2d

199, 204 (5th Cir. 1983) (“Neither the Internal

Revenue Code nor the Treasury Regulations make

any provision for the acceptance of an amended

return in place of the original return previously

filed.”).

2 Hillsboro Nat’l Bank v. Commissioner, 460

U.S. 370, 380 n.10 (1983) (stating that acceptance

of amended returns is “within the discretion of the

Commissioner”); Jones v.Commissioner, 338 F.3d

463, 466 (5th Cir. 2003) (“The IRS has discretion

to accept or reject an amended return.”); Dover

Corp. & Subsidiaries v. Commissioner, 148 F.3d

70, 72-73 (2d Cir. 1998) (“There is simply no

statutory provision authorizing the filing of

amended tax returns, and while the IRS has, as a

matter of internal administration, recognized and

accepted such returns for limited purposes, their

treatment has not been elevated beyond a matter of

internal discretion.”) (internal citations omitted).

3

See Koch v. Alexander, 561 F.2d 1115, 1117

(4th Cir. 1977); McCabe v. Commissioner, 46

T.C.M. (CCH) 390, 391 (1983) (stating that the

filing of “[a]n amended return does not . . . change

(continued...)

3

(...continued)

an assessment that has been made or vitiate a notice of deficiency on which the jurisdiction of [the

Tax] Court is based.”); Miskovsky v. United

States, 414 F.2d 954, 956 (3d Cir. 1969) (“[I]t

would be utterly disruptive of the administration of

the tax laws if a taxpayer could disregard his return and automatically change an assessment based

thereon by making an amended return in his favor

long after the expiration of the time for filing the

original return.”)

4 According to § 262(a), “[e]xcept as otherwise

expressly provided in this chapter, no deduction

shall be allowed for personal, living or family

expenses.”
4

of litigation expenses was personal or for profit.5

 We review the Tax Court’s determination

of the question of profit motive for clear

error.6

As noted by the Tax Court, Colvin is plainly incorrect in asserting that his legal expenses

in suing the association are deductible under §

212 based on the fact that the consequence of

a successful suit would be the production of

taxable income or would assist in determining

his tax liabilitySSsuch a proposition was

outrightly rejected in Gilmore.

7

 The Tax

Court did not commit clear error in determining that the origin of the lawsuit against the

association was personal in nature, given that

it was Colvin’s primary residence and that his

stated purpose behind the first lawsuit was “to

stop the harassment.” Moreover, there was

substantial evidence in the record indicating

that the motivation for the suit was his anger

over the failure of the association properly to

manage, conserve, and maintain the condominium property that he used for his personal

residence, expenses that the regulations relating to § 212 explicitly reference as being nondeductible.

IV.

Colvin asserts that the Commissioner improperly denied him deductions for legal costs

that he assumed in lawsuits against Daou

Systems for unpaid wages. As noted below,

however, Colvin did not adequately address

the nature or amount of these expenses to the

Tax Court; although the Commissioner’s

written submissions contended that these

deductions were in fact allowedSSalbeit converted from Schedule C to Schedule A deductionsSSColvin’s submissions before the

Tax Court only addressed the issue of his

lawsuits against the homeowners association.8

It may be that Colvin was entitled to deduct

the legal expenses he incurred in his lawsuit

against Daou Systems, but we decline to evaluate the veracity of this claim, because the

issue was not adequately raised and presented

in the Tax Court.9

5

 “[T]he origin and character of the claim with

respect to which an expense was incurred, rather

than its potential consequences upon the fortunes of

the taxpayer, is the controlling basic test . . . .”

Gilmore, 372 U.S. at 49. See also Srivastava v.

Commissioner, 220 F.3d 353, 357 (5thCir. 2000).

6 Ogden v. Commissioner, 244 F.3d 970, 971

(5th Cir. 2001) (“We review for clear error the tax

court’s profit motive inquiry.”) (internal citations

omitted).

7

See Gilmore, 372 U.S. at 48 (“The principle

we derive . . . is that the characterization, as ‘business’ or ‘personal,’ of the litigation costs of resisting a claim depends on whether or not the claim

arises in connection with the taxpayer’s profitseeking activities. It does not depend on the consequences that might result . . . .”) (emphasis added).

8 As stated by the Tax Court, “Although petitioner might be entitled to deduct legal expenses incurred in connection with his former employment,

he has identified neither the amount nor the nature

of those expenditures.” Colvin claims that he did

raise the issue in a brief that is not available in the

record on appeal, but the language he quotes

merely states that such legal expenses were incurred and summarily concludes that they should

be deductible, without indicating their nature or

amount. By contrast, the Commissioner’s submissions, included in the record, specifically indicate

that $1,217 and $1,787 were allowed as deductions

for legal expenses in the lawsuit against Daou Systems in tax years 1997 and 1998, respectively.

9

See, e.g., Nissho-Iwai Am. Corp v. Kline, 845

F.2d 1300, 1307 (5th Cir. 1998); Little v. Liquid

(continued...)
5

AFFIRMED.

9

(...continued)

Air Corp., 37 F.3d 1069, 1071 n. 1 (5th Cir. 1994)

(en banc).