T .C. Su m m ary Op i n io n 2 01 8 -2 2

UNITED STATES TAX COURT

TERESA J . HENLEY, Pet i t i o n er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 4 2 4 2-1 6S. Fi l edAp ri l 1 6 , 2 0 1 8
.
Teres a J . Hen ley , fo r h ers el f. J erri ka C. An d ers o n , fo r res p o n d en t .

SUM M ARY OPINION M ORRISON, J u d g e: Th i s cas e was h eard p u rs u an t t o s ect i o n 7 46 3 o f t h e In t ern al Rev enu e Co d e o f 1 9 8 6 , as am en d ed , i n effect wh en th e p et i t i o n was fi led
. 1

1 Al l s ub seq u en ts ect i on referen ces are t o t h e In tern al Rev en u e Co d e o f 1 9 8 6 , as am en d ed , i n effect fo r t h e y ear at i s s u e, 2 0 1 3
.- 2
-

Pu rs u an t t o s ect i o n 7 4 6 3(b ), th e d eci s i o n t o b e en t ered i s n o trev i ewab le b y an y o t h er co u rt , an dth i s o p i ni o n s h al l n o t b e t reat ed as p reced en tfo r an y o th er cas e. Th i s Co u rth as juri sd i ct io n p urs u an t t o s ect i o n 6 2 1 3 (a). Th e res p o n d en t(referred t o h ere as th e “ IRS”) i s su eda n ot i ce o f d efi ci en cy t o the p et i t i o n er, Teres a J . Hen l ey , fo r the 2 0 1 3 t ax ab l e y ear, d et erm i n i n g an i n co m e-t ax d efi ci en cy o f $ 8,7 5 1 an dan accu racy -rel at edp en al t y u nd er s ect i o n 6 6 6 2 (a) o f $ 1 , 75 0
. Th e i s s u e t o b e res o l v edi s the am o u n t o f Hen l ey ’ s wag eri n g-l o s s d edu ct i o n
u n d er s ect i o n 1 6 5 (a) an d (d ). W e h o l dthe am o u nti s $ 2 1,1 9 4 .0 1 , wh i ch i s th e
am ou n tthe IRS co n ced ed
. W i t h th e d edu ct i on al l o w edi n thatam o u n t , th e s ect i on -6 6 6 2 (a) p en al t y

dro p s t o $ 0
.

Back gro u n d Hen l ey res i d edi n Al ab am a wh en s h e fi l edth e p et i t i o n . Duri ng 2 0 1 3, Hen ley p l ay ed s lo tm ach i n es attwo cas i no s i n Bi l o x i , M i s si s si p p i . Th es e were t h e Bo o m t o wncas i no an d t h e HardRo ckcas i n o . Onh er fed eral i nco m e t ax retu rn fo r 2 0 1 3, Hen l ey rep ort ed t hath er g ro s s i n co m e co ns i s t eds o l el y o f $ 7 5 ,0 0 0 o f al i m o n y i n co m e. Sh e rep o rt ed n o ab o v et h e-l in e d educt i o n s . Sh e cl ai m edth e s t an d ard d edu ct i o n . Sh e fi l edu s i n g s i n g l e s t atu s.- 3
-

Th e IRS recei v edFo rm s W -2 G, “ Cert ai n Gam b l i n g W in n i n g s ”, fro m

th e t wo cas i n o s s h o wi n g th atth ey p ai dHen l ey

th e fo l l o w i ng s l o t -m ach i n e wi nn i n g s i n 2 0 1 3 : Dat e Pay o r Am o u n t J an . 1 , 2 0 1 3 H ardRo ckcas i n o - Bi lo x i $ 2 6,4 0 0 J an . 2 , 2 0 1 3 Bo o m t o wn cas i n o - Bi l o x i 1 ,2 0 0 J an . 2 , 2 0 1 3 Bo o m t o wn cas i n o - Bi l o x i 1 ,6 0 0 J an . 3 , 2 0 1 3 Bo o m t o wn cas i n o - Bi l o x i 2 ,0 0 0 J an . 1 5 , 2 0 13 Bo o m t o wn cas i n o - Bi l o x i 2 ,5 0 0 Feb . 5 , 2 0 1 3 Bo o m t o wn cas i n o - Bi l o x i 1 ,6 0 0 J u n e 1 8 , 2 0 1 3 Bo o m t o wn cas i n o - Bi l o x i 1 ,2 0 0 J u n e 2 9 , 2 0 1 3 Bo o m t o wn cas i n o - Bi l o x i 1 ,6 0 0 In th e n o t i ce o f d efi ci en cy , th e IRS d et erm i nedth atHen ley ’ s g ro ss i n co m e i n cl u d ed$ 3 3 ,7 0 0 i n g am

b l i n g i n co m e. Th e $ 3 3 ,7 0 0 am o u ntwas cal cu l at edu s i n g t h e t o t al am o u nt s o n th e Fo rm s W -2 G, ex cep tfo r am ou n ts dupl i cat edo n m o re t h an o n e Fo rm W -2 G. Thu s , the $ 3 3 ,7 0 0 t o t al o m i t t edo n e rep o rt in g o f $ 1 ,2 0 0, an d t wo rep o rt i n gs o f $ 1 , 6 0 0 . Th e n o t i ce o f d efi ci en cy s t at edth at i trel i edo n t h e fo l l o w i n g Fo rm s W -2 G i n cal cu l at i n g g am b l i n g i n co m e:- 4
- Pay o r Am o u n t HardRo ck cas in o - Bi l o x i $ 26 ,4 0 0 Bo o m t o wncas in o - Bi l o x i 1 ,2 0 0 Bo o m t o wncas in o - Bi l o x i 1 ,6 0 0 Bo o m t o wncas in o - Bi l o x i 2 ,0 0 0 Bo o m t o wncas in o - Bi l o x i 2 ,5 0 0 To t al 33 ,7 0 0 Th e n ot i ce o f d efi ci en cy

d i d n o ts t at e t h e d at es o f th e p aym en ts rep o rt edo n th e Fo rm s W -2 G th atm ad e up t h e $ 3 3 ,7 0 0 t o t al . Th e n o t i ce o f d efi ci en cy d et erm i n ed a d efi ci en cy

o f $ 8 ,7 5 1. Th e n o t i ce o f d efi ci en cy al s o d et erm i n edth atth ere was a s ub s t an t i al u n ders t at em en to f i nco m e t ax , fo r wh i ch a s ect i o n -6 6 6 2 (a) p en al t y o f $ 1 ,7 5 0 s h o u l db e i m

po s ed
. In 2 0 1 5 , th e Bo o m

t o wn cas i n o i n Bi l o x i wro t e Hen l ey a l et t er s tat i n g th ati t s reco rd s s h o wed t h at H en l ey ’ s wi n s an dl o s s es fo r each m o n t h o f 2 01 3 were as fo l l o w s :- 5
- M on t h Am o u nto f wi n o r (l o s s ) J an u ary $3 ,4 7 9 Feb ru ary (1 ,1 4 8) M arch (2 2 7) Ap ri l (1 ,7 5 8) M ay 1 6 8 J u n e 1 ,3 5 1 J u l y (3 ,0 7 8) Au g u s t (7 3 2) Sep t em b er 1 Oct o b er 0 No v em b er 1 2 5 Decem b er (1 ,1 2 6 ) To tal (2 ,9 4 5 ) Th e l et t er warn edHen ley th atth e i n fo rm at i o n i n th e l et t er

• d i dn o trefl ectan y

g am b l i n g act i v i t y

fo r wh i ch s h e d i dn o t u s e h er cas i n o p l ay er’ s card ;

• wo u ldb e affect edi f s h e h adu s edh er cas i n o p l ay er’ s cardi n co rrect l y ;

• co n s i s t ed o f m ere ap p ro x i m at i o n s ;

• was d es i g n edo n l y

fo r m ark et i n g p u rp o s es ; an d

• s h o u l d b e u s edo n l y t o s up p o rth er o wnreco rd s. A s t at em en tfro m

th e HardRo ck cas i n o i n Bi l o x i rep o rt edth atfo r Hen l ey ’ s cas i n o p l ay er card the “ Es t i m at edW i n / Lo ss ” fo r 2 01 3 was $ 2 ,2 2 2
. 8 9 fo r s lo t s . Th e s tat em en ts h o wedth e fo l l owi n g cal cu l at i o n s fo r t hatam ou n t :- 6
- Co i n In $9 6 , 9 2 8.6 9 Co i n Ou t

! 6 9 ,6 5 3 .3 9 J ackpo t s ! 2 5 ,0 5 2 .4 1 Es t i m at edW i n / L o s s 2 ,2 22 .8 9

“ Co i n In ” refers t o am o u n t s p ai db y Hen l ey t o t h e cas i n o . “ Co i n Ou t ” an d

“ J ackp o t s ” refer t o am o u n t s p ai db y th e cas i n o t o Hen l ey . Th erefo re t h e s t at em en t
s h o wedth at Hen l ey

h adan “ Es t i m at ed ” l o s s o f $ 2 ,2 2 2 .8 9 , equ al t o “ Co i n Ou t ” o f $ 6 9 ,6 5 3 .3 9 p l u s “ J ackpo t s ” o f $ 2 5 ,0 5 2 .4 1 m i nu s “ Co i n In ” o f $ 9 6 , 9 2 8 .6 9
. Du ri n g 2 0 1 3 , Hen l ey

h ada jo in tb an k acco u n t . Th e s t at em en t s fo r th i s acco u n t sh o wth ats o m e wi t h drawal s fro m th e acco u n twere m ad e atth e l o cat i o n o f t h e t wo cas i n o s . Th e cas e was tri edi n M o b i l e, Al ab am a. In i t s b ri ef fi l edaft er t h e t ri al , th e IRS co n ced edth atHen l ey i s en t i t l ed t o a wag eri n g-l o s s d edu ct i o n o f $ 2 1,1 9 4 .0 1
. It st at edth ataft er t ak i ng th is co n ces s i o n i n to acco u n t , th e am o u n t o f t h e d efi ci en cy

i s $ 4 ,6 5 0 an dth e am o u n to f t h e p en al t y i s $ 0
. Th e fo l l o wi ng t ab l e refl ect s th e co m

p ut at i o n s o f t ax ab le i n co m e t h at are co n si st en twi t h th e $ 4,6 5 0 d efi ci en cy

am o u n tan dco m

p ares tho s e co m

p u t at i o n s t o th e co m

p u t at i o n s o f t ax ab l e i n co m e refl ect ed(1 ) o n Hen l ey ’ s retu rn an d(2 ) i n th e n o t i ce o f d efi ci en cy : 2

2 Am o u n t s are ro u n d ed t o th e n eares td o l l ar.- 7
-
Ret u rn No ti ce o f

d efi ci en cy IRS

li t i g at i n g po s i t i o n
% Gro s s i n co m e $ 7 5,0 0 0 $ 10 8 ,7 0 0 $ 10 8 ,7 0 0

& Ab ov e-t h e-l i n e d edu ct i o n s 0 0 0

' Ad j u s t edg ro s s i n co m e 7 5 ,0 0 0 1 0 8 ,7 0 0 1 0 8 ,7 0 0

& St an d ardd edu ct i o n 6 ,1 0 0 6 ,1 0 0 N/A

& It em i zedd edu ct io n s N/A N/A 2 1 ,1 9 4

& Pers o n al -ex em

p t i o n d edu ct i o n 3 ,9 0 0 3 ,9 0 0 3 ,9 0 0

' Tax ab l e i n co m e 6 5 ,0 0 0 9 8 , 7 00 8 3 ,6 0 6 9 9 9 % Co rrect t ax 1 2 ,1 8 5 2 0 , 9 36 1 6 ,8 3 5

& Tax rep o rt edo n ret u rn 1 2 ,1 8 5 1 2 ,1 8 5 1 2 ,1 8 5

' Defi ci en cy 0 8 ,7 5 1 4 ,6 5 0 Hen ley co n ced es th ats h e h ad$ 3 3 ,7 0 0 o f u n rep o rt edg am b l i n g i n co m e (t h e s am e
am ou n tcal cu l at edb y

th e IRS i n th e n ot i ce o f d efi ci en cy u si n g the Fo rm s W -2 G), b u tco nt en d s th ats h e s u s t ai n edatl eas tthatam o u n ti n wag eri n g l os s es . Sh e co n ten d s t h atth es e l o s s es are s ub s tan t i at edb y (1 ) t h e l et ter fro m

th e Bo o m

t o wn cas i n o wh i ch , s h e co n t en d s , i n d i cat es th ath er n etl o s s es fro m th atcas i n o were $ 2 ,9 4 5 , (2 ) t h e s t at em en tfro m th e HardRo ck

cas in o wh i ch , s h e co n t en d s , i n d i cat es th ath er n etl os s es fro m t h atcas in o were $ 2 ,2 2 3 , an d(3 ) h er b an k
s t at em en t s , wh i ch s ho w b an kwi t h drawal s at t h e cas i no s .- 8
- Di s cu ss i o n Gro s s i n co m e i s d efi n edas al l i n co m e fro m wh at ev er s o u rce d eri v ed . Sec. 6 1 (a). Ad ju s tedg ro s s i n co m e equ al s g ro s s i n co m e m i nu s cert ai n d educt i o n s kn o wn as ab o v e-t h e-l i n e d edu ct i o n s . Sec. 6 2 (a). Tax ab l e i n co m e fo r t ax pay ers wh o i t em i ze d edu ct i o n s i s equ al t o ad ju s t ed g ro s s i n co m e m i n u s i t em i zedd educt i o n s m in u s th e p ers o n al -ex em p t i on d edu ct i o n . Sec. 6 3 (a). On e i tem i zed d edu ct i o n i s the d educt i o n u n d er s ect i o n 1 6 5 (a) fo r an y

“ l o ss ”. Fo r t ax p ay ers wh o t ak e t h e s t an d ardd edu ct io n , t ax ab le i n co m e i s equ al t o ad ju s t edg ro ss i nco m e m i nu s t h e s tan d ardd edu ct i o n m i n u s th e p ers on al
ex em p t i o n d edu ct i o n . Sec. 6 3 (b ). Fo r t ax y ear 2 0 1 3, t he s t an d ard d edu ct i o n fo r a t ax p ay er fi l i n g as s i n g l e was $ 6 ,1 0 0 . See s ec. 6 3(c); In s t ru ct i o n s fo r Fo rm 1 0 4 0 (2 0 1 3), “ U.S. In d i v i du al In co m e Tax Retu rn ”. Th e am ou n to f i nco m e t ax d ep en d s o n th e am o u n t o f t h e t ax p ay er’ s t ax ab l e i n co m e. Sec. 1 (c). In s umm ary , t ax ab le i nco m e i s co m p u t edas fo l l o w s :- 9
- Tax p ay ers wh o i t em i ze d edu ct i o n s Tax p ay ers wh o t ak e t he s t an d ard d edu ct i o n
% Gro s s i n co m e % Gro ss i n co m e

& Ab o v e-t h e-l i n e d edu ct i o n s & Ab o v e-t h e-l i n e d edu ct i o n s

' Ad ju st edg ro s s i nco m e ' Ad ju s tedg ro s s i n co m e

& It em i zedd edu ct io n s & St an d ardd edu ct i o n ($ 6 ,1 0 0)

& Pers o n al -ex em

pt i o n d educt i o n & Pers o n al -ex em p t i o n d edu ct io n

' Tax ab l e i n co m e ' Tax ab l e i nco m e Th e Co d e d o es n o t s et fo rt h s p eci fi c ru l es fo r d et erm i n in g i n co m e an dl o s s es fo r g am bl i n g act i v i t y ex cep tth ats ect i o n 1 6 5 (d ) p ro v i d es th at “ [l ] o s s es fro m wag eri n g tran s act i on s s h al l b e al l owedo n l y t o t he ex t en to f t h e g ai n s fro m s u ch t ran s act io n s .” Fo r n o np ro fes si o n al g am b l ers s uch as Hen l ey , th e d edu ct i o n fo r l o s s es fro m

wag eri n g tran sact i o n s i s an i tem i zedd edu ct i o n . See No rg aard v . Co m m i s s i o n er, 9 3 9 F.2 d8 7 4 , 8 7 8 (9 t h Ci r. 1 9 9 1 ), aff’ g i n p art , rev ’ g i n p arto n o t h er g ro u n d s T.C. M em o . 1 9 8 9 -3 9 0 ; Bri sen o v . Co m m i s s i on er, T.C. M em o . 2 0 0 9 -6 7
. Sect io n 6 0 4 1 (a) req u i res an y b u s i n es s th atm ak es a p aym en to f $ 6 0 0 o r
m o re t o rep o rtthe p aym en t o n an i n fo rm at i o n retu rn t o th e IRS u n der reg u lat i o n s o f t h e Dep art m en t o f th e Treas u ry . Sect i on 7 .6 0 4 1-1 (a), Tem p o rary In co m e Tax Reg s., 4 2 Fed . Reg . 3 3 2 8 6 (J u n e 3 0 , 1 97 7 ), p ro v i d es th atan y b us i n es s t hatm ak es a p aym en to f $ 1 ,2 0 0 fro m s l o t -m ach i n e p l ay

m u s tfi le an i n fo rm at i o n retu rn wi t h t h e IRS s h o wi n g th e n am e o f t he wi n ner, t h e d at e o f t h e p aym en t, an dthe am o u n t- 1 0 -

o f t h e p aym en t . Th e am ou n to f t h e p aym en tfo r t h i s p u rp o s e i s n o tredu cedb y th e
am ou n twag ered . Id . p ara. (b )(1 ). W i n n i n gs an d l o s s es fro m an y o t h er wag eri n g t ran s act io n s are n o t t ak en i n t o acco u n t . Id . s ub para. (5 ). Th e i n fo rm at i o n ret u rn t o b e u s edi s a Fo rm W -2 G. Id . p ara. (c), 4 2 Fed . Reg . 1 4 7 1 (J an . 7 , 1 9 7 7). Th e t ax p ay er b ears th e b u rd en o f p ro v in g th atth e d et erm i n at io n s i n th e
n o t i ce o f d efi ci en cy

are i n erro r. Tax Ct
. R. Pract . & Pro c. 1 4 2 (a). Th e n o t i ce o f d efi ci en cy

s en tt o Hen l ey d i d n o tal l o w h er a wag eri n g -l o s s d educt i o n . Th erefo re,
u n d er t h e g en eral ru l e s t at ed ab o v e, Hen l ey h as th e b u rd eno f p ro v i n g h er en t i t l em en tt o s u ch a d edu ct i on . As o n e ex cep t i o n t o thi s g en eral ru l e, s ect i o n 7 4 9 1 (a) p l aces the b u rd eno f p ro o f o n th e IRS wi t h res p ectt o an y fact u al i ss u e rel at i n g t o l i ab i l it y

fo r t ax i f t h e t ax p ay er m ai n t ai n edad equ at e reco rd s , s at i s fi ed t h e s ub s t an t i at io n req u i rem en t s , co o p erat edwi t h th e IRS, an di n t ro du cedcred i b l e ev i d en ce wi t h res p ectt o the fact u al i s s u e. Al th o u g h n ei th er p art y al l eg es th e ap p li cab i l i t y

o f s ect i o n 7 4 9 1 (a), we co n cl u d e t h at t h e b u rd en o f p ro o f h as n o t
s h i ft edt o th e IRS wi t h res p ect t o th e wag eri ng -l o ss d edu ct i o n . Th erefo re, Hen l ey b ears th e b urd en o f p ro vi ng th ats h e i s en t i t l edt o s u ch a d edu ct i on . Becau s e t h e- 1 1 -

IRS h as co n ced edthats h e i s en t i t ledt o a d edu ct i o n o f $ 2 1 , 1 9 4 .0 1 , s h e m u s tp ro v e en t i t l em en tt o a d edu ct i o n ex ceed i n g t h i s am o u nt . 3 Sect io n 6 0 0 1 an d t h e reg u l at i on s p ro m u lg at edth ereu n d er req u i re t ax p ay ers t o m ai n t ai n reco rd s s u ffi ci en tt o p erm i t v eri fi cat io n o f i n co m e an dd educt i o n s . Sec. 1 .6 0 0 1 -1 (a), In co m e Tax Reg s . Un d er t h e Co h an ru le, i f t he t ri al reco rd p ro v id es s u ffi ci en tev i den ce t h atth e t ax p ay er h as i n cu rreda d edu ct i b l e ex p en s e, b u tth e t ax p ay er i s u nab l e t o s ub s t an t i at e ad equ at el y th e p reci s e am ou n to f t h e d educt i o n t o wh ich h e o r s h e i s o t h erwi s e en t i t l ed , th e Co u rtm ay es t i m at e t h e
am ou n to f t h e d edu ct i on , b eari n g h eav i l y ag ai n st t he t ax p ay er wh o s e i n ex act i tu d e i n s ub s t an t i at i ng th e am o u n to f t h e ex p en s e i s o f h i s o r h er o wnm ak i n g , an dal l o w t h e d edu ct i o n t o thatex t en t . Co h an v . Co m m i s s i o ner, 3 9 F.2 d5 4 0 (2 d Ci r. 1 9 3 0 ). Ho wev er, i n o rd er fo r th e Co u rtt o es t i m at e th e am o u n t o f an ex pen s e, t h e Co u rt
m u sth av e s o m e b as i s up on wh i ch an es t i m at e m ay b e m ad e. Van i cekv . Co m m i s s i o n er, 8 5 T.C. 7 31 , 7 4 2 -7 4 3 (1 9 8 5 ); W i l li am s v . Un i t edSt at es , 2 4 5 F.2 d 5 5 9 , 5 6 0 -5 6 1 (5 t h Ci r. 1 9 5 7 ). Th e Co u rth as em p l o y edth e Co h an ru l e n o tju s tt o es t i m at e d edu ct i b l e ex p en s es , b u tt o es t i m at e d edu ct i b l e wag eri n g l o s s es . See

3 Hen l ey d o es n o tco n t es tth e d et erm i n at io n i n th e n o t i ce o f d efi ci en cy th at s h e h ad$ 3 3,7 0 0 o f u nrep o rt edg am b l i n g i n co m e. Th erefo re we n eedn o t d i s cu s s t h e b u rd en -o f-p ro of ru les t h atwo u l d b e ap p l i cab l e t o a ch al l en g e t o th i s d et erm i n at i o n .- 1 2 -

Sch oo l er v . Co m

m i s s i o n er, 6 8 T.C. 8 6 7, 8 7 1 (1 9 7 7 ). Li k e anes t i m at e o f
ex p en s es , an es t i m at e o f wag eri n g l o s s es can b e m ad e o n l y i f t here i s a b as i s fo r
m ak i n g t he es t i m at e. St ei n v . Co m m i s s i on er, 3 2 2 F.2 d7 8, 8 3 (5 t h Ci r. 1 96 3 ), aff’ g T.C. M em o . 1 9 6 2 -1 9 . W i t h t h es e p ro p o si t io n s i n m i n d , we m u st d et erm i n e wh et h er Hen l ey h as s at is fi edh er b u rd en o f p ro v i n g th ats h e i s en t i t l edt o t h e cl ai m edwag eri n g -l os s d edu ct io n m en t i o n edab o v e. Hen l ey d i d n o t m ai n tai n a d i ary

o r an y o t h er co n tem

p o ran eo u s reco rd refl ect i n g h er l o ss es fro m wag eri n g du ri ng th e 2 0 1 3 t ax ab l e y ear. Attri al , Hen l ey d i dn o t t es t i fy

t o an y s peci fi c wag eri n g l o s s es s he i n cu rredduri n g th e t ax ab l e y ear 2 0 1 3 . Ho wev er, i n an at t em p tt o s ub s t an t i at e h er wag eri n g l o s ses , s he o ffered i n t o ev i d en ce t h e l et t er fro m

th e Bo o m

to wn cas i n o . Th e l et t er was recei v edi n t o ev i d en ce b y

th e Co u rt . Th e l et t er co n t ai n edv ari o us warn i n gs ab o u tth e rel i ab i l i t y o f t h e i n fo rm at i o n i n th e l et t er, i n cl u d i ng th at t he i nfo rm at i on d i d n o tco v er g am b l in g act i v i ty

fo r wh i ch Hen l ey

d i d n o tu s e h er p l ay er’ s card . Hen l ey d i dn o t t es t i fy th ats h e al way s u sed h er p l ay er’ s card wh en g am b l in g atthe Bo omt o wn cas i n o (o r t h e Hard Ro ckcas i n o ). In h er b ri ef, s h e co n ced es th atn o tu s i n g h er p l ay er’ s cardm i gh th av e affect edth e rel i ab i l i t y o f t h e cas in o s’ i nfo rm at i on . Th e l et t er fro m

the Bo o m

t o wncas i n o i s u n rel iab l e, an dwe g i v e i tn o wei g h t .- 1 3 -

Hen l ey al so o ffered i n t o ev i d en ce, t o s ub s t an t i at e h er wag eri n g -l o s s d educt i o n , th e s t at em en tfro m th e HardRo ckcas i n o p u rp ort i ng t o es t i m at e t h e
am ou n to f Hen l ey ’ s l os s atth e cas i n o . Th i s s tat em en twas recei v edi n t o ev i d en ce. Th i s s t at em en ti s al s o , o n i ts face, m erel y an es t i m at e. Fu rtherm ore, i ti s ap p aren t t h ati ti n cl u d es o n l y

g am b l in g act i v i t y

fo r wh i ch Hen l ey

u s edh er p l ay er’ s card
. Th e s tat em en ti s u n rel iab l e, an dwe g i v e i t n o wei g ht
. W e h av e t ak en i nt o co n s i d erat i o n Hen l ey ’ s t es t i m o n y an dth e d o cu m en t s s h e o fferedi n t o ev i d en ce. Al t h o u g h th e Co u rtack n o wl ed g es th atHen l ey m o s t l i kel y h ads o m e wag eri n g l os s es duri n g th e y ear, we are u n ab l e t o d et erm i n e (ei t h er wi t h s p eci fi ci t y

o r b y es t i m at i n g ) th e am o u n to f t h o s e l o s s es o n th e b as i s o f t h e reco rdath an d . W e co n cl u d e t h ats h e h as fai l edt o s at i s fy h er b u rd eno f p ro o f
o n th i s i s s u e. See Ri o s v . Co m m i s s i o n er, T.C. M em o . 2 01 2 -1 2 8 , aff’ d , 5 8 6 F. Ap p ’ x 2 6 8 (9 t h Ci r. 2 0 1 4 ); M ay er v . Co m m i s s i o ner, T.C. M em o . 2 0 0 0 -2 9 5, aff’ d , 2 9 F. Ap p’ x 7 06 (2 dCi r. 2 00 2 ); s ee al s o Zi el o nk a v . Co m m i s s i o ner, T.C. M em o . 1 9 9 7 -8 1 . Th erefo re, we are u n ab l e t o al l o w an y d edu ct i o n fo r g am

b l i n g l o s s es i n
an am o u n tg reat er t han thatco n ced edb y th e IRS. Th e IRS’ s co n ces si o n o f $ 2 1 ,1 9 4 .0 1 i s ap p aren tl y b as edo n wi th drawal s
m ad e at th e cas i no s fro m Hen l ey ’ s jo i n tb an k acco u n t du ri n g 2 0 13 . Th i s co n ces si o n s eem i n gl y

res t s o n th e as su m

p t i o n th atal l s u ch wi t h drawal s were t h en- 1 4 -

wag eredi n s l o tm ach i nes . W e wo u l dn o trel y o n t h i s as s u m

pt i o n. Hen ley

(o r t h e o t h er o wn er o f the jo i n t acco un t ) co u ldh av e red ep o s it eds o m e o f t h e m o n ey wi t h drawn . Or th e wi t h drawnm o n ey co u l d h av e b een s p en to n s o m et h i n g o t h er t h an s l o tm ach i n es . Ho wev er, we d o n o ts eco n dg ues s th e reas o n s a p art y m ak es a co n ces si o n . W e h o l dth atHen l ey i s en t i t l edt o an i t em i zedd edu ct i o n fo r wag eri n g l o s s es i n th e am ou n to f $ 2 1 ,1 9 4 .0 1 , th e am o u n t o f t h e IRS’ s co n ces s i o n. To refl ectthe fo reg o i n g , Deci s i o n wi ll b e en t ered fo r a d efi ci en cy

o f $ 4 ,6 5 0 an d a
s ect i o n 6 6 6 2 (a) p en al t y o f $ 0.