1Unless otherwise indicated, subsequent section references

are to the Internal Revenue Code in effect for the year at issue,

and all Rule references are to the Tax Court Rules of Practice

and Procedure.

T.C. Summary Opinion 2005-134

UNITED STATES TAX COURT

AURORA DUQUE BALINO, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 14374-03S. Filed September 8, 2005.

Aurora Duque Balino, pro se.

A. Gary Begun, for respondent.

COUVILLION, Special Trial Judge: This case was heard

pursuant to section 7463 in effect when the petition was filed.1

The decision to be entered is not reviewable by any other court,

and this opinion should not be cited as authority. 
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2In the notice of deficiency, there was one income

adjustment of $264, which petitioner reported on her return as

(continued...)

Respondent determined a deficiency of $2,409 in petitioner’s

2001 Federal income tax. The issue for decision is whether

petitioner is entitled to itemized deductions for unreimbursed

employee expenses and other miscellaneous deductions. 

Alternatively, if petitioner is not entitled to deduct the

claimed other miscellaneous deductions as other miscellaneous

deductions, the Court must decide whether such expenses are

deductible as medical expenses.

Some of the facts were stipulated. Those facts, with the

exhibits annexed thereto, are so found and made part hereof. 

Petitioner is a citizen of and a resident of Windsor, Ontario,

Canada. She is employed in the United States at Detroit,

Michigan.

Petitioner is a registered nurse and, during the year at

issue, was employed by a hospital in Detroit. Petitioner also

worked for a home health care agency and performed certain

medical services by visiting patients at home. Those services

were performed in the Detroit metropolitan area. Petitioner was

an employee in both endeavors and received Forms W-2, Wage and

Tax Statement, from her employers for the year 2001. The income

from both sources was reported on petitioner’s Federal income tax

return for 2001, and none of that income is at issue.2 The
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2(...continued)

tax-exempt interest. In the notice of deficiency, respondent

determined that the interest was includable in gross income. At

trial, counsel for respondent conceded that adjustment.

issues for decision are: (1) Petitioner’s entitlement to

itemized deductions for job expenses, and (2) other miscellaneous

deductions.

Because petitioner is not a citizen of, and does not reside

in, the United States but earns income in the United States, she

is required to file income tax returns for the income she earns

in the United States as a nonresident alien. The income tax form

for such taxpayers is Form 1040NR, U.S. Nonresident Alien Income

Tax Return. Petitioner filed a timely return for 2001. On that

return, she reported wage and salary income of $46,534.65,

taxable State and local income tax refunds of $505, and total

income of $47,039.65. She also reported tax-exempt interest

income of $264. See supra note 2. Petitioner’s return also

included a Schedule A, Itemized Deductions, on which she claimed

deductions totaling $17,757. The Schedule A for Form 1040NR

differs from the Schedule A for Form 1040 income tax returns for

U.S. citizens. Most notably, Schedule A for Form 1040NR makes no

provision for deduction of medical expenses, although Schedule A

for Form 1040NR allows deductions for State and local taxes,

charitable contributions, job expenses, casualty and theft

losses, and most other miscellaneous deductions.
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On her 2001 Federal income tax return, petitioner claimed

Schedule A itemized deductions as follows:

State and local taxes $ 2,573

Gifts to U.S. charities 5,345

Job expenses & most other miscellaneous

 deductions (after the 2% sec. 67(a) limitation) 8,855

Other miscellaneous deductions 984

 Total $17,757

In the notice of deficiency, respondent disallowed the $8,855 for

job expenses and the $984 for other miscellaneous deductions,

totaling $9,839. The basis for the disallowance was petitioner’s

failure to substantiate the amounts claimed. The $984 for other

miscellaneous deductions was additionally disallowed for the

reason that those expenses were in fact medical expenses, and

medical expenses are not allowed as an itemized deduction by

nonresident aliens. As noted above, the Schedule A for Form

1040NR does not include provision for deduction of medical and

dental expenses.

On Schedule A, for job expenses and most other miscellaneous

deductions, petitioner claimed the following:

Licenses $ 240

Out-of-town conferences 4,160

Books 376

Journals 120

Uniforms, shoes, socks, support hose,

 medical devices & tools 3,600

Windsor-Detroit Tunnel fees 780

Long distance telephone calls 520

 Total (Prior to the 2% sec. 67(a) limitation) $9,796
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3Sec. 7491 modifies this general rule and, in some

instances, shifts the burden to the Commissioner. In this case,

the burden does not shift to respondent because petitioner did

not fulfill the requirement of sec. 7491(a)(2), which, among

other requirements, requires that the taxpayer maintain records

to substantiate expenses claimed.

The determinations reflected by the Commissioner in a notice

of deficiency are presumed correct, and the burden is on the

taxpayer to establish that the determinations are incorrect.3

Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933).

Section 162(a) allows a deduction for ordinary and necessary

business expenses paid during the taxable year in carrying on a

trade or business. A “trade or business” includes the trade or

business of being an employee. Primuth v. Commissioner, 54 T.C.

374, 377 (1970).

Section 600l provides, in pertinent part: "Every person

liable for any tax * * * shall keep such records, render such

statements, make such returns, and comply with such rules and

regulations as the Secretary may from time to time prescribe." 

Section l.600l-l(a), Income Tax Regs., provides, in pertinent

part, that "any person subject to tax under subtitle A of the

Code * * *, shall keep such permanent books of account or

records, including inventories, as are sufficient to establish

the amount of gross income, deductions, credits, or other matters

required to be shown by such person in any return of such tax". 

Moreover, even if books and records are maintained by the
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taxpayer, a mere bookkeeping entry of the item does not suffice

without proof of further substantiation. Consolidated-Hammer Dry

Plate & Film Co. v. Commissioner, 49 T.C. 153, 171 (1967), affd.

409 F.2d 1077 (7th Cir. 1969). Petitioner produced no books and

records, receipts, or any other documentation to substantiate

these expenses. She testified that, although she received

receipts for many of the expenses claimed, at the time of

purchase, she did not retain such receipts, nor did she maintain

books and records of her expenses.

The Court notes that, even if petitioner had substantiated

her expenses, some of the expenses claimed are not deductible. 

For example, the $780 claimed for Windsor-Detroit Tunnel fees

likely was incurred as petitioner’s expenses in commuting to and

from her home and her places of employment. Commuter expenses

are considered personal expenses and are not deductible. Sec.

262(a). The Court also recognizes, however, that petitioner

incurred deductible expenses for which she may not have been

reimbursed, such as long-distance telephone calls, licenses and

dues as a registered nurse, fees for conferences she may have

been required to attend, uniforms, certain equipment, other

medical devices, and items of that nature. The Court is

satisfied that petitioner incurred such expenses. The Court is

empowered to make an allowance for such expenses in “as close an

approximation as * * * [we] can, bearing heavily if * * * [we]
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4Although the Court is allowing a deduction of $300 for

employee-related expense, no portion of that amount is to be

construed as an allowance of a deduction for expenses that

require substantiation under sec. 274(d) and/or 280F(d)(4)(A),

which include generally such expenses as travel away from home,

entertainment, gifts, and expenses relating to the use of listed

properties and cellular telephones or other similar

telecommunications equipment.

choose upon the taxpayer whose inexactitude is of his own

making.” Cohan v. Commissioner, 39 F.2d 540, 544 (2d Cir. 1930). 

The Court, therefore, allows petitioner a deduction of $300 for

such employee-related expenses.4

With respect to the other miscellaneous deductions,

petitioner claimed $984, of which $404 was for prescription

eyeglasses and $580 was for a glucometer, strips, and lancets. 

Respondent disallowed the $984 for two reasons: (1) Lack of

substantiation, and (2) the items were personal medical devices

and, therefore, were medical expenses. Respondent avers that

medical and dental expenses are not allowable itemized deductions

to taxpayers who are nonresident aliens. As noted earlier,

Schedule A for use with Form 1040NR does not provide for

deduction of medical and dental expenses.

Petitioner is a diabetic, and the items she claimed as other

miscellaneous deductions on her return were all prescribed by her

doctor for her diabetic condition. Although petitioner presented

no documentation to establish the amount she paid for the items

described, the Court is satisfied that petitioner incurred and
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paid those expenses. Those expenses, however, do not constitute

other miscellaneous deductions and in fact are medical expenses,

as respondent argues.

Section 873(a) provides generally that, in the case of a

nonresident alien, deductions are allowed only if, and to the

extent that, such expenses are connected with income that is

effectively connected with the conduct of a trade or business

within the United States with the apportionment and allocation of

the allowable deductions as provided by regulations. 

Additionally, section 873(b) provides exceptions to the general

rule of section 873(a) and allows deductions for certain expenses

that are not effectively connected with a trade or business

within the United States. The allowable deductions are: (1)

Casualty and theft losses under section 165, (2) charitable

contributions under section 170, and (3) personal exemptions

under section 151. Medical and dental expenses incurred by a

nonresident alien are not included as an exception to the general

rule. That is why, therefore, Schedule A for Form 1040NR does

not provide for deduction of medical and dental expenses. The

job expenses and most other miscellaneous deductions, although

not specified as being deductible under section 873(b), are,

nonetheless, deductible under section 873(a) because such

expenses are effectively connected with the conduct of a trade or

business within the United States. Therefore, with respect to
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the disallowed other miscellaneous deductions of $984, respondent

is sustained.

Reviewed and adopted as the report of the Small Tax Case

Division.

 Decision will be entered

 under Rule 155.