T. C. Mem o. 2 01 4- 22 1

UNITED STAT ES TAX COURT ENGSTROM, LIPSCOM B & LACK, APC, Pet it io ne r v. COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 27 36 4- 12 Fi le d Oct ob er 2 0, 2 01 4.

Kev inM. Bag le y , for

pe ti ti on er. Mo ni ca D. Po lo , for

res po nd en t.

MEMORANDUM FINDINGS OF FACT AND OPINION GOEKE, Ju dg e: Res po nd en t d et erm in edde fic ie nc ie s i n En gs tro m , Lip sc om b & Lack , APC’s (p et it io ne r orEL&L) Fed eral in co m e ta x fo r 20 08 th ro ug h 2 01 0 andaccu racy-rela te d p en al ti es un de r se ct io n 6 66 2, as f ol lo ws: 1 Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o the Int ern al 1 Rev enue Co de ineffe ctforth e y ears at i ss ue , andall Ru le refe ren ces are t o the Tax Co urt Ru le s o f Prac ti ce an d P ro cedur es .-2 -

[* 2] Pen al ty Y ear Defici en cy sec. 6 66 2( a) 200 8 $90 3,9 79 $1 80 ,79 6 200 9 36 ,09 6 7,2 19 201 0 30 6,1 26 61 ,25 5 Partof the 20 08 de fic ie nc y res ul te d fr om

res po nd en t’s p art ia l d is al lo wan ce o f a ne t o pe rat in g l os s p et it io ne r carrie d fo rwardfro m 20 07 . Res po nd en t d is al lo wed tra ve l ex pe ns e d educ ti on s that co ntrib ut edto th e 2 00 7 n etop erat in g l os s. Th e Co urt h as no juri sd ic ti on ov er t ax y ear 2 00 7; ho wev er, we can de te rm in e th e co rrec t am ountof the 20 07 ne t o pe rat in g l os s i n o rd er t o d et erm in e th e 2 00 8 i ss ue . See, e.g ., Jo rd anv. Co m

mis si on er, T.C. Mem o. 2 00 9- 22 3, s li p o p. at9 n .9, af f’d, 46 9 F ed . App x. 4 60 (6t h C ir. 2 01 2) . Accor di ng ly, th e p eri odfro m 20 08 to 20 10 is refe rredto as the y ears at i ss ue . The i ss ue s p res en te d fo r ou r de ci si on are: (1 ) whe th er p et it io ne r is en ti tl edto de du ct io ns for tra ve l ex pe ns es forth e y ears at i ss ue . W e h ol d tha t i t i s en ti tl edto de du ctso m e o f th e ex pe ns es ; (2 ) whe th er p et it io ne r is en ti tl edto de du ctfor 20 08 a ne t o pe rat in g l os s carry fo rwardfro m

20 07 of $ 1,4 25 ,00 0 tha t re su lt edfro m tra ve l ex pe ns e de du ct io ns . W e h ol d tha t i t i s en ti tl edto a po rti on of tha t d educ ti on ; an d-3 -

[* 3] (3 ) whe th er p et it io ne r is li ab le foraccu racy-rela te d p en al ti es un de r se ct io n 66 62 forth e y ears at i ss ue . W e h ol d tha t i t i s, b utth e p en al ti es m us t b e ad jus te d fo r co ns is te nc y

with thi s o pi ni on .

FINDINGS OF FACT So m e o f th e fac ts ha ve be enst ip ul at edan d are s o fo un d. Th e p art ie s’ st ip ul at io ns of f

act s ar e in co rp or at edhe rei n b y th is refe ren ce. Whenpe ti ti on er fil edit s p et it io n, i ts pri nc ip al pl ace o f bu si ne ss was i n Lo s An ge le s, Ca li fo rn ia . Pet it io ne r ti m el y

fil eda pe ti ti on with thi s C ou rt r eque st in g a red et erm in at io n o f th e d efi ci en ci es an d a ccuracy-rela te d p en al ti es forth e y ears at is su e. Inhi s i ni ti al an swe r res po nd en t d efen de d h is ad jus tm en ts onth e b as is of pe ti ti on er’s fai lu re t o c om pl y with the subs tant ia ti on requi rem en ts insec ti on 27 4( d) . Res po nd en t am en de d h is an swe r to cla rif y th athe als o b el ie ve s p et it io ne r fai le d t o d em on strat e th atth e cl ai m edde du ct io ns were fo r or di na ry an d n eces sary bu si ne ss expe ns es as r equi redby sect io n 1 62 . Peti ti on er fi le d an a m en de d p et it io n as se rti ng it s en ti tl em en t t o a dd it io na l d educ ti on s fo r tr av el expe ns es of $ 48 7,0 00 an d $ 28 5,0 00 fortax y ears 20 09 an d 2 01 0, re sp ect iv el y , th atitha d n otcla im edon it s re tu rn s. Pet it io ne r is a to rt andco m m erci al li ti ga ti onlaw fi rm th atrep res en ts in di vi du al s, g ov ern m en ta l en ti ti es , andco rp or at e p la in ti ffs forin ci de nt s o ccu rri ng-4 -

[* 4] th ro ug ho utth e Uni te d S ta te s an d i nt ern at io na ll y . Duri ng th e y ears at i ss ue W al te r J. Lac k o wne d 5 0% o f pe ti ti on er’s s ha res an d s erv edas i ts pre si de nt . Tho m as V. Girard i, a cl os e fri en d o f Mr. Lack , is th e m an ag in g p artne r an d 1 00 % own er o f Gira rd i | Kees e (GK), a l aw fi rm with ato rt p ract ic e si mil ar t o pe ti ti on er’s. Mr. Lackan d M r. Girard i h av e worke d a s co -co un se l o n n um ero us le ga l ca se s. Dur in g the y ears at i ss ue , Mr. Lackan d M r. Girard i h adown ers hi p i nt eres ts inBic y cl e Cas in o, LP; Girard i Fi na nc ia l, LLC; an d Oce an s 1 1 C as in o, In c. Mr. Girard i was a di rect orof B oyd Gam in g C or p. an d was co m

pe ns at edforhi s se rv ic es . Mr. Lack

an d M r. Girard i wer e al so di rect or s o f Supe rg en , a ph arm aceu ti cal co m

pa ny, andwere co m

pe ns at edforth ei r se rv ic es . Peti ti on er h ad no own ers hi p i nt eres t o r in vo lv em en t i n any of th e afo rem en ti on edact iv it ie s. In19 95 Mr. Lackan d M r. Girard i fo rm edG&L Avi at io n (G& L), a Cal ifo rn iage ne ral partn ers hi p tha t o wns air craf t. Mr . Lackan d M r. Girard i ea ch ho lda 50 % in te res t i n G& L. Unde r G&L’s partn ers hi p a gr eem en t M r. Lack an d Mr. Gi rard i s hare equa ll y all th e ex pe ns es rel at edto th e o pe rat io n o f th e ai rcra ft. G&L’s pri nc ip al pl ace o f bu si ne ss was the same as p et it io ne r’s. Dur in g the y ears at i ss ue G&L own edanAm eri canGul fs tre am GIV lo ng ran ge jet ai rcra ft ( GIV) an d aRaytheo n B 35 0 S up er Ki ng Air turbo pr op air craf t-5 -

[* 5] (Kin g Ai r). Mr. Lackan d M r. Girard i u se d the air craf t fo r ex te ns iv e tr av el du rin g the y ears at i ss ue . The GIV was m an ag edby thi rd -p arty m an ag em en t co m pa ni es th atpro vi de d c rew, m ai nt en an ce, rep ai rs , fue l, re gu la to ry co m pl ianc e, an d o th er s erv ic es . The thi rd -p arty m an ag em en t co m

pa ni es were al so au th or iz ed to ch art er the GIV whenitwas n otinus e b y Mr. Lackor M r. Girard i. Reb ek ah Herb ert , vi ce p res id en t o f fl ig htop erat io ns an d l og is ti cs for on e o f th e th ird -p arty m an ag em en t co m

pa ni es , det erm in edth atth e GIV an d the Kin g Ai r wou ldbe ch arg edou t atap pr ox im at el y $5 ,50 0 and$2 ,50 0 p er h ou r, res pe ct iv el y . G&L als o ren te d alu xury

su it e atth e St ap le s C en te r, a sp orts aren a in do wnt ownLos Ang el es . Peti ti on er was ne ve r a p artne r of G&L, andhe ldno own ers hi p i nt eres t i n an y of G& L’ s ai rcra ft. Pet it io ne r cl ai m edtra ve l ex pe ns e d educ ti on s o f $1 ,42 5,0 00 , $1 ,15 7,7 97 , $6 87 ,31 0, an d $ 1,0 62 ,46 9 fo r ta x years 2 00 7, 2 00 8, 2 00 9, an d 2 01 0, re sp ect iv el y rel at edto it s u se of the GIV, th e Kin g Ai r, an d the Stapl es Cen te r lu xu ry su it e. 2 Pet it io ne r m ad e p aym en ts to G&L to ta li ng $5 30 ,00 0, $ 34 7,7 97 , $2 00 ,31 0, an d $7 77 ,46 8 fo r ta x years 2 00 7, 2 00 8, 2 00 9, an d 2 01 0, re sp ect iv el y . Mr. Lackals o The parti es ag reed , pu rs ua ntto th e st ip ul at io n o f fac ts , th atpe ti ti on er i s n ot 2 en ti tl edto tra ve l ex pe ns e d educ ti on s fo r it s u se of the Stapl es Cen te r lu xu ry su it e. The se expe ns es to ta le d $ 22 ,79 7, $ 25 ,31 0, an d $ 24 ,69 8 i n 2 00 8, 2 00 9, an d 2 01 0, res pe ct iv el y .-6 -

[* 6] m ad e p aym en ts to G&L fro m hi s p ers on al acco un t t ot al in g $ 89 5,0 00 , $8 10 ,00 0, $ 48 7,5 00 , and$2 85 ,00 0 fo r ta x years 2 00 7, 2 00 8, 2 00 9, an d 2 01 0, res pe ct iv el y . The re were no writte n a gr eem en ts ineffe ctbe twee n p et it io ne r an d G& L or be twee n p et it io ne r an d the th ird -p arty m an ag em en t co m

pa ni es reg ard in g the us e o f th e Kin g Ai r an d the GIV. Peti ti on er m ai nt ai ns , ho wev er, tha t the re was an

“ im pl ie d i n fa ctG&L ag reem en t” to m ak e th e ai rcra ft a va il ab le an d fl ig htready fo r pe ti ti on er’s b us in es s u se . Peti ti on er d idno t re cei ve in vo ic es forth e ex pe ns es it an d M r. Lackpa iddu rin g the y ears at i ss ue . There were n o wri tt ensh areh ol de r lo anag reem en ts be twee n p et it io ne r an d M r. Lackrel at in g t o the am ou nt s p ai d fro m Mr. Lack ’s per so na l ac co un t t o G& L. Peti ti on er p ai d n o i nt eres t t o M r. Lack on th e am ou nt s M r. Lackpa idto G&L fro m hi s p ers on al acco un t. Dur in g the y ears at i ss ue Pam el a Carte r was em pl oyed b y pe ti ti on er as M r. Lack ’s sec ret ary; ho wev er, s he als o p erfo rm eddu ti es forG&L su chas reco rdke ep in g andde po si ti ng paym en ts in to G&L’ s b an k a cco un t. Mr s. Carte r pr ep aredrev enue sch edul es th atrefl ect edpaym en ts G&L rece iv edforth e u se of th e GIV an d the Kin g Ai r. The re ve nu e sc he du le s i nc lu de d the da te of the pa ym en t an d the am ou ntpa idbu t d idno t i nc lu de de ta il s s uc h a s fl ig ht in fo rm at io n, p as se ng ers , or the pu rp os es of f li gh ts . Mrs . Cart er al so pre pa red-7 -

[* 7] G&L m on th ly calen da rs onwhi chsh e rec or de d Ki ng Air s ch edul edfli gh ts , GIV sch edul edfli gh ts , pl an e m ai nt en an ce, an d p il otva cat io ns . The m on th ly cal en da rs di d n otin cl ud e th e b us in es s p ur po se s o f th e fl ig ht s o r de ta il edpa ss en ge r in fo rm at io n. G&L ke ptfli gh t l og s fo r bo th air craf t. St ev enCo rn el l, the Kin g Ai r’s le ad pi lo t, p rep aredth e lo gs forth e Kin g Ai r, whi le th e GIV pi lo ts pre pa redlo gs forth e GIV. The l og s d o n otpro vi de th e b us in es s p ur po se s o f th e fl ig ht s o r de ta il ed pa ss en ge r in fo rm at io n. Nei th er Mr s. Carte r no r Mr. Co rn el l h adpe rs on al kn owl ed ge of the pu rp os e o f th e Kin g Ai r or GIV fli gh ts . Duri ng th e y ears at is su e Mr. Lac k m ai nt ai ne d an e xe cu ti ve cal en da r on whi chhe reco rd edpe rs on al ap po in tm en ts , per so na l b us in es s, an d EL&L b us in es s. Th e ex ecu ti ve cal en da r di d no t re fle ctth e am ou nt s o f tr av el expe nd itur es or d et ai le d i nf orm at io n re ga rd in g the bu si ne ss pu rp os e o f th e ex pe nd itur es . At tria l p et it io ne r of

fere d two n on co nt em

po ran eo us do cu m en ts to subs tant ia te th e b us in es s p ur po se s fo r th e tr av el expe ns es at i ss ue . The d oc um en ts were i ntro du cedas re co ns tru ct io ns of p et it io ne r’s tri ps an d i nc lu de d e ach tri p’s da te , des ti na ti on , fil e num be r, an d p as se ng ers . The fi rs t d oc um en t was a lo g o f pe ti ti on er’s u se of the Kin g Ai r an d the GIV, whi chMrs . Cart er p rep aredby refe ren ci ng th e fl ig htlo gs an d m on th ly calen da rs an d s pe ak in g wi th Mr. Lack .-8 -

[* 8] The s eco nddo cu m en t was a si m il ar l og th atMr. Lackpre pa redinan ti ci pa ti on of tri al by usi ng hi s m em ory , exe cu ti ve cal en da rs , andreco ll ect io ns fro m pe ti ti on er’s em

pl oyees. OPINION I. Burd enof P ro of The tax pa y er b ears th e b ur de n o f pr ov in g b y a pr ep on de ran ce o f th e ev id en ce tha t the Co m

m is si on er’s d et erm in at io ns are i nc orrect . Rul e 1 42 (a); W el chv. Hel ve rin g, 2 90 U.S. 11 1,1 15 (19 33 ). Und er s ect io n 7 49 1( a), i f th e ta xp ay er p ro du ces cred ib le ev id en ce wi th res pe ctto an y factua l i ss ue rel ev an t t o as cert ai ni ng th e ta xp ay er’s l iabi li ty for t axan d m eet s o th er re qu ire m en ts , th e bu rd enof p ro of

sh ift s fr om

th e ta xp ay er t o the Co m

m is si on er as to th atfactua l is su e. The n ot ic e o f de fic ie nc y co nt ai ns anexpl an at io n o f ad jus tm en ts whi ch st at es : “ To b e al lo weda de du ct io n fo r an y tra ve li ng expe ns e, y oum us t fu rn is h in fo rm at io n t o p ro ve : (a ) th e am ou ntof the expe ns e, (b ) th e ti m e an d p la ce o f th e tra ve l, (c ) th e b us in es s p ur po se of the tra ve l, an d (d ) th e ti m e th e ex pe ns e was pa id orin curred . Becau se y ouhave no t es tabl is he d a ll of the ab ov e, we ha ve di sa ll owe d your de du ct io n.” W e fi ndth atpe ti ti on er h as fai le d t o m eetth e requi rem en ts to cau se th e b ur de n t o s hi ft t o re sp on de nt . Howev er, res po nd en t’s am en de d ans wer rai se s as analt ern at iv e arg um en t wh ethe r th e ex pe ns es were-9 -

[* 9] ord in ary an d n eces sary bu si ne ss expe ns es un de r se ct io n 1 62 . W e d et erm in ed th atres po nd en t wo ul d c arry the bu rd enof p ro of to est ab li sh th atth e tr av el ex pe ns es were n otord in ary an d n eces sary bu si ne ss expe ns es forpe ti ti on er t o the ex te ntth atpe ti ti on er m eet s the subs tant ia ti on requi rem en ts of s ect io n 2 74 (d ) an d th e al le ga ti on inth e am en de d ans wer d iff ers fro m th e subs tant ia ti on is su e rai se d i n th e n ot ic e o f de fic ie nc y . Becau se of the rel at io ns hi p o f Mr. Lac k t o G& L and pe ti ti on er, the qu es ti on of wh ethe r pa ym en ts to G&L by peti ti on er were ord in ary an d n eces sary

bu si ne ss expe ns es is m or e co m pl ex th anth e que st io n o f whe th er the subs tant ia ti on requi rem en ts ha ve be enm et . In ad di ti on , Mr. Lackpe rs on al ly pai d am ount s tha t p et it io ne r de du ct ed . Neverth el es s, the ev id en ce wh ic h i s co nt em po ran eo us to th e ev en ts read il y est ab li sh es th atso m e o f th e tr av el expe ns es were fo r pe ti ti on er’s b us in es s an d h av e b eensubs tant iate d i n a cco rd an ce wi th se ct io n 2 74 (d ). Res po nd en t fa il edto pro du ce an y ev id en ce that trav el expe ns es di rect ly inv ol vi ng pe ti ti on er’s em pl oyees o th er than M r. Lackwere n otord in ary an d n eces sary . Res po nd en t al so fai le d t o p ro du ce ev id en ce tha t M r. Lack ’s ex pe ns es fortra ve l t o v ari ou s l aw co nf eren ces an d p et it io ne r-re la te d l eg al pr oc eed in gs were n otord in ary an d n eces sary . Exp en se s fo r th is tra ve l ar e th eref or e al lo wab le as d educ ti on s. Th e rem ai ni ng rep orte d trav el expe ns es in-1 0-

[* 10 ] di sp ut e h av e n otbe ensubs tant ia te d i n a cco rd an ce wi th sec ti on 27 4( d) an d are n otall owabl e. II. Trav el Exp en se Dedu ct io ns Deduc ti on s ar e a m atte r of leg is la ti ve gra ce, an d t axpa y ers m us t m ai nt ai n su ffi ci en t re co rd s t o s ub st an ti at e th e am ou nt s o f th ei r in co m e an d e nt it le m en t t o an y de du ct io ns or c red it s cl ai m ed . Rul e 1 42 (a)( 1) ; INDOPC O, Inc . v. Co m m is si on er, 5 03 U.S. 79 , 84 (19 92 ); Ne w Col on ia l Ic e Co . v. Hel ve rin g, 2 92 U.S. 43 5, 4 40 (19 34 ). A taxpa y er m ay de du ctord in ary an d n eces sary expe ns es pa idor i nc urreddurin g the tax ab le y ear i n c arrying onan y tra de or b us in es s. Sec . 16 2. Whethe r anexpe ns e is ord in ary is de te rm in edby tim e, pl ace, and ci rcu m st an ce. Welchv. Hel ve rin g, 2 90 U.S. at 1 13 -1 14 . Whe re a t ax pa y er re po rts a b us in es s ex pe ns e b utcan no t fu ll y subs tant iate it , th e Co urt g en eral ly may ap pr ox im at e th e al lo wab le am ou nt . Coh anv. Co m m is si on er, 3 9 F .2d54 0, 54 3- 54 4 (2 d C ir. 1 93 0) . Howev er, we m ay do so on ly whe n the tax pa y er p ro vi de s ev id en ce s uf

fic ie ntto est ab li sh a rat io na l b as is up on whi chanest im at e canbe m ad e. Vani cekv. Co m

mis si on er, 8 5 T.C. 7 31 , 74 3 (1 98 5) . Fo r certa inki nd s o f ex pe ns es othe rwis e d educ ti bl e und er s ect io n 1 62 (a), a ta xp ay er m

us t s at is fy

th e st ric t s ub st an ti at io n re qu ire m en ts setforth insec ti on 27 4( d) be fo re s uc h e xp en se s wi ll be all owe d a s d educ ti on s. Th e se ct io n 2 74 (d )-1 1-

[* 11 ] subs tant iati on requi rem en ts supe rs ed e th e Co ha n d oc tri ne th atwe m ay es ti m at e d educ ti on s wh ere e vi de nc e is in ad equate . Coh anv. Co m mis si on er, 3 9 F.2 d a t 5 43 -5 44 ; Sanf

or d v . Comm is si on er, 5 0 T.C. 8 23 , 82 7 (1 96 8) (st ric t subs tant ia ti on pro vi si on tak es pre ced en ce o ve r Co ha n ru le ), aff’d, 4 12 F.2d20 1 (2 d C ir. 1 96 9) . The he ig ht en edsubs tant ia ti on requi rem en ts of s ect io n 2 74 (d ) ap pl y to tra ve l ex pe ns es an d are thu s i m pl ic at edhe re. To p ro ve it s en ti tl em en t t o the tra ve l ex pe ns e d educ ti on s atis su e, pe ti ti on er m us t p res en t s uf

fic ie ntev id en ce supp orti ng : (1 ) th e am ou ntof the expe ns e; (2) th e ti m e an d p la ce o f th e tr av el ; an d (3 ) th e b us in es s p ur

po se of the expe ns e. The d eg ree o f subs tant ia ti on ne ces sary to est ab li sh bu si ne ss pu rp os e d ep en ds up on th e fac ts an d c irc um st an ces of each cas e, bu t co nt em

po ran eo us do cu m en ta ti on is de em edm or e cre di bl e th an aft er-the -fac t re co ns tru ct io ns . Sec. 1 .27 4- 5T(c )(1 ), (2 )(i i)( B), Tem po rary Inco m e Tax Reg s., 5 0 F ed . Reg . 46 01 6, 4 60 18 (Nov . 6, 1 98 5) . Howev er, wh ere the bu si ne ss pu rp os e is ev id en t fr om th e su rro un di ng fact s an d c irc um st an ces , a writ te n e xp lana ti on of the bu si ne ss pu rp os e wil l n otbe requi red . Sec. 1 .27 4- 5T(c )(2 )(i i)( B), In co m e TaxReg s., s up ra.-1 2-

[* 12 ] A. Ord in ary an d Nec es sary Bu si ne ss Exp en se s Pet it io ne r co nt en ds th atwe sh ou ldpre su m e th ere was a bu si ne ss pu rp os e fo r al l o f th e tr av el expe ns es itrep orte d. Pe ti ti on er ar gu es th atres po nd en t b ears th e bu rd enof p ro vi ng th ey

ha d n o b us in es s p ur

po se . Peti ti on er’s p os it io n i s i nc orrect reg ard in g the subs tant ia ti on requi rem en ts of s ect io n 2 74 (d ). Res po nd en t ar gu es th atth e tr av el expe ns es were n otord in ary an d n eces sary be cau se pe ti ti on er was pa y in g the ob li ga ti on s o f Mr. Lac k andth e tr av el expe ns es were n otreas on ab le in am ountinrel at io n t o the ir p ur po se . On th e b as is of the reco rdwe be li ev e pe ti ti on er m etth e requi rem en ts of the reg ul at io ns un de r se ct io n 2 74 (d ) fo r so m e o f th e ex pe ns es itde du ct ed . Howev er p et it io ne r al so fai le d t o s ub st an ti at e p orti on s of it s d educ ti on s. Onm an y of the fli gh ts th atge ne rat edth e d educ ti on s, M r. Girard i was th e so le pa ss en ge r. Pet it io ne r is no t en ti tl edto de du ctexpe ns es rel at edto th es e fl ig ht s as th ey were n otcle arl y

forpe ti ti on er’s b us in es s an d the co nt em po ran eo us reco rd s d o n otsh ow the bu si ne ss pu rp os e o f th e fl ig ht s. On othe r fl ig ht s M r. Lackan d h is fam il y us edth e ai rcra ft f

or no n- EL&L bu si ne ss . Pet it io ne r al so is no t en ti tl edto de du ctexpe ns es th atitdi d n otactua ll y pay . Pet it io ne r adm it s tha t s om e o f th e ex pe ns es at i ss ue were p ai d b y Mr. Lackou t o f hi s p ers on al fun ds . Neverth el es s, p et it io ne r arg ue s tha t i t s ho ul d b e al lo wedto de du ctth os e ex pe ns es be cau se Mr. Lackpa idth em onpe ti ti on er’s b eh al f as eit he r-1 3-

[* 13 ] lo an s o r cap it al co ntrib ut io ns . W e d is ag ree. Pe ti ti on er h as no t p res en te d an y ev id en ce d em on strat in g tha t i t o bs erv edth e fo rm al it ie s n eces sary forsu cha ch arac te riz at io n c on te m

po ran eo us ly or atan y

ti m e b efo re tria l. See So ll be rg er v . Co m m is si on er, T.C. Mem o. 2 01 1- 78 (ex pl ai ni ng th atco urts de fin e a l oa n a s an ex pr es s o r im

pl ie d a gr eem en t wh ere o ne pe rs on adva nc es m on ey to th e o th er an d th e o th er ag rees “ to rep ay itup on su chterm s as ti m e an d ra te of i nt eres t” an d whe re the re i s “ anun co nd it io na l o bl ig at io n o n the part o f th e tr an sf eree to rep ay th e m on ey , andanun co nd it io na l i nt en ti on onth e p artof the trans fero r to sec ur e rep aym en t” ), aff’d, 6 91 F.3d11 19 (9t h C ir. 2 01 2) ; s ee al so W el chv. Co m m is si on er, 2 04 F.3d12 28 , 12 30 (9t h C ir. 2 00 0) (st at in g that fa ct or s re le va nt inass es si ng whet he r a tran sa ct io n i s a tru e lo anare: “ (1 ) whe th er the pro m is e to rep ay is ev id en cedby a no te or o th er i ns tru m en t; (2) whet he r in te res t was ch arg ed ; (3 ) whe th er a fi xe d s ch edul e fo r rep aym en ts was e st ab li sh ed ; (4 ) whe th er co ll at eral was g iv ento sec ur e p aym en t; (5) whet he r rep aym en ts were m ad e; (6) whe th er the bo rro wer h ada reas on ab le pro sp ectof r ep ay in g the lo anan d wh ethe r th e le nd er h adsu ffi ci en t fund s t o a dv an ce the lo an ; an d (7 ) whe th er the parti es co nduc te d the m se lv es as i f th e tr an sa ct io n wer e a l oa n” ), aff’g T.C. Me m o. 1 99 8- 12 1. Lik ewis e, th ere i s n o e vi de nc e in th e rec or d tha t the am ou nt s fo rward edby Mr. Lackwere re co rd edas c ap it al co ntrib ut io ns when expe nd ed . W e are-1 4-

[* 14 ] di si nc li ne d t o e m

br ace a fte r-the -fac t, s el f-s erv in g t es ti m on y as asubs ti tu te fo r actua l co nt em

po ran eo us ev id en ce an d d oc um en ta ti on . There fo re, we rejec t pe ti ti on er’s p os it io n re ga rd in g the de du ct ib il ity of the paym en ts whi chth e fi rm di d no t ac tu al ly m ak e, sp eci fic al ly Mr. Lack’s p ers on al expe nd itur es inacco rdwith th e o bl ig at io ns he hi m se lf u nd ert oo k re ga rd in g G& L. B. Subs tant ia ti on of Tra ve l Ex pe ns es To s ub st an ti at e it s re po rte d trav el expe ns es , pet it io ne r pr ov id edrev enue sc he du le s, m on th ly calen dars , fli gh t l og s, an d re co ns tru ct edan al y si s i ntro du ced th ro ug h t es ti m on y . Add it io na ll y , pet it io ne r at ta ch edsch edul es to it s b rie fs whi ch pu rp ort t o s umm ari ze the ev id en ce i n the reco rd . Howev er, the sch edul es in cl ud e fli gh ts th atwere n otpart o f th e rec on stru ct edan al y si s an d b us in es s p ur po se de ta il s th atwere n otpart o f an y

ev id en ce s ub m it te d a t tria l. The refo re, we wil l n ot co ns id er the se sch edul es as p artof the reco rd . The rel ev an t ev id en ce re fle ct s thr ee ca te go rie s o f fl ig ht s: (1) fli gh ts on whi chMr. Lackan d ano th er EL&L em pl oyee were p as se ng ers ; (2 ) fl ig ht s o n whi chMr. Lackwas the on ly E L&L em pl oyee pa ss en ge r; and(3) fli gh ts onwhi ch ne ithe r Mr. Lac k n oran othe r EL&L em pl oyee was apa ss en ge r. W e h ol d tha t pe ti ti on er i s en ti tl edto de du ct io ns for th e expe ns es rel at edto cat eg ory (1) fli gh ts whe n the expe ns es were p ro pe rly subs tant iate d. We ho ldth atpe ti ti on er i s en ti tl ed-1 5-

[* 15 ] to de du ctth e expe ns es rel at edto cat eg ory (2) fli gh ts on ly whe n i t i s re ad il y ap pa ren t tha t the fli gh ts were fo r EL&L bu si ne ss . W e h ol d tha t p et it io ne r is no t en ti tl edto de du ct io ns for an y expe ns es rel at edto cat eg ory (3) fli gh ts be cau se ne ithe r Mr. Lac k n oran othe r EL&L em pl oyee was apa ss en ge r an d the fli gh ts ha d no di sc ern ab le bu si ne ss pu rp os e acc or di ng to th e co nt em po ran eo us reco rd s. Fo r m an y of the fli gh ts incat eg or ie s (1 ) an d (2 ), pe ti ti on er fa il edto m eetth e he ig ht en edexpe ns e subs tant ia ti on requi rem en ts of s ect io n 2 74 (d ). Whe re the bu si ne ss pu rp os e o f a fl ig htha s n otbe enest ab li sh ed , th e d educ ti on s ar e di sa ll owe d. Where a fl ig htlac ks supp orti ng co nt em po ran eo us do cu m en ts su chas fli gh t l og s t o s ub st an ti at e th e am ou nt s o f th e ex pe ns es , th e d educ ti on s ar e al so di sa ll owe d. Inth e ap pe nd ix to th is op in io n we h av e su m m ari zedou r ho ld in gs for

all cat eg ory (1) an d c at eg ory

(2) fli gh ts . All e xp en se de du ct io ns rel at edto cat eg ory (3 ) fl ig ht s wer e d is al lo wed , andth eref or e th es e fl ig ht s wer e n otin cl ud edinth e ap pe nd ix . The ap pe nd ix in cl ud es th e d at e, de st in at io n, b us in es s p ur po se , air craf

t, an d fl ig htho ur s fo r eac h p ro pe rly subs tant ia te d fl ig ht . Whe re p et it io ne r fai le d t o pr op erl y subs tant ia te th e fl ig ht , itis no te d a cco rd in gl y . The GIV fl ig ht s tha t wer e pr op erl y subs tant ia te d t ot al ed78 .6 fl ig htho ur s. Th e Kin g Ai r fl ig ht s tha t wer e pr op erl y subs tant ia te d t ot al ed19 1.1 fli gh t h ou rs . The GIV an d the Kin g Ai r are-1 6-

[* 16 ] ch arg edou t atap pr ox im at el y $5 ,50 0 and$2 ,50 0 p er h ou r, res pe ct iv el y . The refo re, the ap pr op ria te de du ct io n fo r pe ti ti on er’s p ro pe rly subs tant ia te d trav el ex pe ns es du rin g the y ears at i ss ue is $9 10 ,05 0 ($ 28 6,5 00 , $3 15 ,05 0, $ 20 6,2 50 , an d $ 10 2,2 50 fortax y ears 20 07 , 20 08 , 20 09 , and20 10 , res pe ct iv el y ). C. Pet it io ne r’s Add it io na l Arg um en ts Pet it io ne r co nt en ds th atth is cas e ari se s u nd er s ect io n 2 74 (d )(4 ) rel at in g t o us e o f li st edpro pe rty andth eref or e th e subs tant ia ti on requi rem en ts forth e u se of li st edpro pe rty un de r se ct io n 1 .27 4- 5T(b )(6 ), Tem po rary Inco m e Tax Reg s., 5 0 Fed . Reg . 46 01 6 (No v. 6 , 19 85 ), ap pl y . Peti ti on er ex pl ai ns th atth e ai rcra ft s ho ul d be co ns id eredli st edpro pe rty becaus e o f th e p hr as e “paym en ts un de r a l eas e fo r a pe rio d o f 30 day s o r m or e” u se d i n s ect io n 2 80 F(c) (2 ). Peti ti on er s ug ge st s tha t ap pl y in g the trave l ex pe ns e reg ul at io ns is m or e p ro bl em at ic be cau se of the ir u se of

“ se parat e ex pe nd itur es ”, “bu si ne ss day s” , andlac k o f gu id an ce o n M r. Lack ’s

“ du al us e” o f th e ai rcra ft. We rejectth is po si ti on be cau se pe ti ti on er h as no t pr oduc edan y

ev id en ce d em on strat in g tha t i t m etth e requi rem en ts to ch arac te riz e it s u se of the air craf

t as a le as e o r ren ta l o f pr op erty . III. Accu racy-Rel at edPen al ty Res po nd en t d et erm in edth atpe ti ti on er i s l iabl e fo r acc ur acy-rela te d pe na lt ie s und er s ect io n 6 66 2( a). Sec ti on 66 62 (a) and(b) (1 ) an d (2 ) im po se s a-1 7-

[* 17 ] 20 % pe na lty

onanun de rp aym en t o f ta x re qu ire d t o b e sh ownona return i f th e und erp aym en t i s at tri bu tabl e to a ta xp ay er’s n eg li ge nc e o r di sr eg ardof r ul es or reg ul at io ns or s ub st an ti al un de rs ta te m en t o f in co m e ta x. Sect io n 6 66 2( c) d efi ne s n eg li ge nc e as in cl ud in g any fail ur e to m ak e a reas on ab le att em

ptto co m pl y with the pro vi si on s o f th e in te rn al rev enue laws . Neg li ge nc e h as als o b eende fin edas the fai lu re t o e xe rci se du e car e o r th e fai lu re to do whata reas on ab le an d p ru de ntpe rs on wou lddo un de r th e ci rcu m st an ces . Neel y v. Co m m is si on er, 8 5 T.C. 9 34 , 94 7 (1 98 5) . Negl ig en ce al so in cl ud es an y fai lu re b y th e ta xp ay er t o k eep ad equa te bo ok s an d re co rd s o r to subs tant ia te it em s pr op erl y . Sec. 1 .66 62 -3 (b )(1 ), In co m e Tax Reg s. Sec ti on 66 62 (c) d et erm in es th at

“ di sr eg ard ” in cl ud es an y

care le ss , reck le ss , or i nt en ti on al di sr eg ard . Sect io n 6 66 4( c)(1 ) pr ov id es anex cep ti onto th e acc ur acy-rela te d p en al ty if itis sh ownth atth e ta xp ay er h adreas on ab le cau se an d a ct edingo odfai th . Sec. 1.6 66 4- 4( b) (1 ), In co m e Tax Reg s. Th e d eci si on as t o wh ethe r th e ta xp ay er ac te d with re as on ab le cau se an d i n g oo d fa ith d ep en ds up on all th e p ert in en t fa ct s an d ci rcu m st an ces . Hig be e v . Comm is si on er, 1 16 T.C. 43 8, 4 48 (20 01 ); s ee s ec. 1.6 66 4- 4( b) (1 ), In co m e Tax Reg s. The Co m m is si on er b ears th e b ur de n o f pr oduc ti on with re sp ectto a ta xp ay er’s l iabi li ty for acc ur acy-rela te d p en al ti es . See s ec. 7 49 1( c). To m eetth at-1 8-

[* 18 ] bu rd en , th e Co m

m is si on er m

us t p ro du ce s uf

fic ie ntev id en ce i nd ic at in g tha t itis ap pr op ria te to im

po se th e p en al ty. See Hi gb ee v . Comm is si on er, 1 16 T.C. at 44 6- 44 7. On ce the Co m

m is si on er m eet s h is bu rd enof p ro du ct io n, the tax pa y er m us t co m e fo rwardwith p ers ua si ve ev id en ce that the Co m mis si on er’s de te rm in at io n i s i nc orrect . Rul e 1 42 (a); see Hig be e v . Commis si on er, 1 16 T.C. at 44 6- 44 7. Th e ta xp ay er m ay m eetth is bu rd enby pro vi ng th athe or s he act edwith reas on ab le cau se an d i n g oo d fa ith. Se e se c. 66 64 (c)( 1) ; s ec. 1 .66 64 -4 (a), In co m e Tax Reg s. Pet it io ne r fai le d t o e st ab li sh reas on ab le cau se forno t k eep in g s uf fic ie nt co nt em po ran eo us reco rd s s ho win g i m po rta ntfli gh t d et ai ls an d the bu si ne ss pu rp os e o f th e tr av el . Peti ti on er al so rep orte d e xp en se de du ct io ns fortra ve l un rel at edto it s b us in es s. Th eref or e, we fi ndpe ti ti on er’s und erp aym en ts ne gl ig en t an d l ack in g re as on ab le cau se or g oo d fa ith. Acco rd in gl y , we su st ai n re sp on de nt ’s im po si ti on of a ccu racy-rela te d p en al ti es un de r se ct io n 6 66 2 fo r th e y ears at i ss ue . Inreac hi ng ou r ho ld in gs he rei n, we h av e co ns id eredall arg um en ts th e pa rti es m ad e, an d t o the ex te ntwe di d n otm en ti on th em ab ov e, we co nc lu de th ey are m oo t, i rrel ev an t, o r witho utm eri t.-1 9-

[* 19 ] To re fle ctth e fo reg oi ng , Deci si on wil l b e en te redun de r Ru le 15 5.-2 0-

[* 20 ] APPENDIX Date Dest in at io n Bus in es s p ur po se Fl ig htho ur s 1/ 7/ 07 Cab o S anLuca s, M ex . EL&L li ti ga ti on 6.4 (KA) 1/ 30 /0 7 Ft . Laud erd al e, Fl a. EL&L li ti ga ti on 9.9 (GIV) 2/ 15 /0 7 Las Veg as , Nev. Fai lu re t o s ub st an ti at e 3/ 11 /0 7 The rm al , Cal . Fai lu re t o s ub st an ti at e 3/ 15 /0 7 Oak land , Cal . Fai lu re t o s ub st an ti at e 3/ 23 /0 7 The rm al , Cal . EL&L li ti ga ti on 2.4 (KA) 3/ 29 /0 7 Las Veg as , Nev. EL&L li ti ga ti on 1.8 (KA) 4/ 10 /0 7 Ch ic ag o, Il l. IATL con fere nc e 3.3 (GIV) 4/ 14 /0 7 Ch ic ag o, Il l. IATL con fere nc e 5.6 (GIV) 4/ 23 /0 7 Las Veg as , Nev. Fai lu re t o s ub st an ti at e 4/ 26 /0 7 Pu ert o Val larta , Mex . EL&L li ti ga ti on 8.0 (KA) 5/ 10 /0 7 The rm al , Cal . EL&L li ti ga ti on 1.1 (KA) 5/ 24 /0 7 The rm al , Cal . Fai lu re t o s ub st an ti at e 6/ 6/ 07 Mi nd en , Nev. EL&L li ti ga ti on 4.7 (KA) 6/ 12 /0 7 Man ag ua , Nicar . Fai lu re t o s ub st an ti at e 7/ 1/ 07 La Paz, M ex . Fai lu re t o s ub st an ti at e 8/ 9/ 07 Mi nd en , Nev. Fai lu re t o s ub st an ti at e 8/ 24 /0 7 SanDieg o, Ca l. EL&L li ti ga ti on 2.5 (KA) 8/ 29 /0 7 Pu ert o Val larta , Mex . EL&L li ti ga ti on 8.5 (KA) 9/ 4/ 07 Pu ert o Val larta , Mex . EL&L li ti ga ti on 8.8 (KA) 9/ 7/ 07 Las Veg as , Nev. IATL con fere nc e 3.5 (KA) 9/ 14 /0 7 The rm al , Cal . Fai lu re t o s ub st an ti at e 9/ 20 /0 7 Oak land , Cal . Fai lu re t o s ub st an ti at e 9/ 21 /0 7 La Paz, M ex . Fai lu re t o s ub st an ti at e 10 /1 7/ 07 Sco tt sd al e, Ariz ./D.C. EL&L li ti ga ti on 4.9 (GIV) 10 /2 5/ 07 Oak land , Cal . Fai lu re t o s ub st an ti at e 10 /2 6/ 07 Las Veg as , Nev. Fai lu re t o s ub st an ti at e 11 /2 1/ 07 The rm al , Cal . Fai lu re t o s ub st an ti at e 11 /2 5/ 07 The rm al , Cal . Fai lu re t o s ub st an ti at e 12 /1 6/ 07 Tete rb or o, N.J . IATL con fere nc e 4.8 (GIV) 12 /2 7/ 07 Cab o S anLuca s, M ex . EL&L li ti ga ti on 4.2 (KA) 1/ 2/ 08 Oak land , Cal . EL&L li ti ga ti on 2.4 (KA) 1/ 6/ 08 Cab o S anLuca s, M ex . EL&L li ti ga ti on 6.6 (KA)-2 1-

[* 21 ] 1/ 15 /0 8 San Di eg o, Ca l. EL&L li ti ga ti on 1.1 (KA) 1/ 18 /0 8 Las Veg as , Nev. Co nf eren ce s pe ak er 1.9 (KA) 1/ 20 /0 8 Las Veg as , Nev. Co nf eren ce s pe ak er 2.0 (KA) 2/ 2/ 08 Ph oe ni x, Ari z. Co nf eren ce s pe ak er 3.1 (KA) 2/ 10 /0 8 Ph oe ni x, Ari z. EL&L li ti ga ti on 2.1 (GIV) 2/ 17 /0 8 Mi nd en , Nev. Fai lu re t o s ub st an ti at e 2/ 19 /0 8 Mi nd en , Nev. Fai lu re t o s ub st an ti at e 3/ 12 /0 8 Carl sb ad , Cal . EL&L li ti ga ti on 0.9 (KA) 3/ 13 /0 8 Oak land , Cal . Fai lu re t o s ub st an ti at e 3/ 20 /0 8 The rm al , Cal . EL&L li ti ga ti on 1.2 (KA) 3/ 22 /0 8 The rm al , Cal . EL&L li ti ga ti on 2.4 (KA) 4/ 10 /0 8 The rm al , Cal . EL&L li ti ga ti on 1.7 (KA) 4/ 18 /0 8 SanDieg o, Ca l. Co nf eren ce s pe ak er 1.1 (KA) 4/ 20 /0 8 Las Veg as , Nev. Fai lu re t o s ub st an ti at e 5/ 29 /0 8 Seat tl e, W as h. EL&L li ti ga ti on 3.3 (KA) 6/ 4/ 08 Ketc hi ka n, Al as ka EL&L li ti ga ti on 6.7 (GIV) 6/ 6/ 08 Ren o, Nev . Fai lu re t o s ub st an ti at e 6/ 12 /0 8 Liv erm or e, Cal . Fai lu re t o s ub st an ti at e 6/ 18 /0 8 Mi nd en , Nev. EL&L li ti ga ti on 4.9 (KA) 7/ 2/ 08 Si tk a, Alas ka EL&L li ti ga ti on 3.6 (GIV) 7/ 5/ 08 Si tk a, Alas ka EL&L li ti ga ti on 3.7 (GIV) 7/ 24 /0 8 Po rtl an d, Or./ Si tk a, Alas ka EL&L li ti ga ti on 12 .4 (KA) 7/ 30 /0 8 Oak land , Cal . EL&L li ti ga ti on 1.2 (KA) 7/ 31 /0 8 Oak land , Cal . EL&L li ti ga ti on 1.2 (KA) 8/ 14 /0 8 Mi nd en , Nev./ Oak land , Cal . Fai lu re t o s ub st an ti at e 8/ 20 /0 8 Mi nd en , Nev. EL&L li ti ga ti on 2.4 (KA) 8/ 25 /0 8 Den ve r, Co lo . EL&L li ti ga ti on 2.8 (KA) 8/ 26 /0 8 Den ve r, Co lo . EL&L li ti ga ti on 2.8 (KA) 8/ 29 /0 8 Las Veg as , Nev. CAALA con fere nc e 1.9 (KA) 8/ 31 /0 8 Las Veg as , Nev. CAALA con fere nc e 1.9 (KA) 9/ 3/ 08 Seat tl e, W as h. EL&L li ti ga ti on 4.6 (GIV) 9/ 21 /0 8 Asp en , Col o. IATL con fere nc e 1.6 (GIV) 9/ 24 /0 8 Asp en , Col o. IATL con fere nc e 1.8 (GIV) 9/ 29 /0 8 SanDieg o, Ca l. EL&L li ti ga ti on 2.3 (KA) 10 /9 /0 8 Cab o S anLuca s, M ex . EL&L li ti ga ti on 6.3 (KA) 11 /1 2/ 08 Cab o S anLuca s, M ex . Fai lu re t o s ub st an ti at e 11 /2 6/ 08 The rm al , Cal . EL&L li ti ga ti on 0.7 (KA)-2 2-

[* 22 ] 11 /3 0/ 08 Therm al , Cal . EL&L li ti ga ti on 1.1 (KA) 12 /5 /0 8 Oak land , Cal . EL&L li ti ga ti on 2.3 (KA) 12 /3 0/ 08 The rm al , Cal . EL&L li ti ga ti on 1.1 (KA) 1/ 2/ 09 The rm al , Cal . EL&L li ti ga ti on 1.3 (KA) 1/ 13 /0 9 Ja ck so n, M is s./ New Orl., La. EL&L li ti ga ti on 3.1 (GIV) 3/ 12 /0 9 Oak land , Cal ./M in de n, Nev . Fai lu re t o s ub st an ti at e 3/ 12 /0 9 The rm al , Cal . EL&L li ti ga ti on 2.3 (KA) 3/ 21 /0 9 Las Veg as , Nev. EL&L li ti ga ti on 0.9 (KA) 3/ 23 /0 9 Las Veg as , Nev. EL&L li ti ga ti on 1.9 (KA) 4/ 6/ 09 SanDieg o, Ca l. EL&L li ti ga ti on 1.0 (KA) 4/ 10 /0 9 The rm al , Cal . EL&L li ti ga ti on 0.7 (KA) 4/ 13 /0 9 The rm al , Cal . EL&L li ti ga ti on 1.3 (KA) 4/ 21 /0 9 Atl an ta , Ga. IATL con fere nc e 3.8 (GIV) 4/ 24 /0 9 Atl an ta , Ga. IATL con fere nc e 4.4 (GIV) 5/ 21 /0 9 SanDieg o, Ca l. EL&L li ti ga ti on 2.3 (KA) 5/ 25 /0 9 SanDieg o, Ca l. EL&L li ti ga ti on 0.4 (KA) 5/ 29 /0 9 Ban do n, Or. Fai lu re t o s ub st an ti at e 6/ 11 /0 9 Liv erm or e, Cal . Fai lu re t o s ub st an ti at e 6/ 16 /0 9 Sacr am en to , Cal . EL&L li ti ga ti on 2.4 (KA) 6/ 17 /0 9 Mi nd en , Nev. EL&L li ti ga ti on 2.3 (KA) 6/ 21 /0 9 Mi nd en , Nev. EL&L li ti ga ti on 2.5 (KA) 6/ 22 /0 9 Den ve r, Co lo . EL&L li ti ga ti on 3.7 (GIV) 6/ 24 /0 9 Den ve r, Co lo . EL&L li ti ga ti on 5.6 (KA) 7/ 2/ 09 SanDieg o, Ca l. Fai lu re t o s ub st an ti at e 7/ 4/ 09 SanDieg o, Ca l. Fai lu re t o s ub st an ti at e 7/ 16 /0 9 Mi nd en , Nev. Fai lu re t o s ub st an ti at e 7/ 22 /0 9 Mi nd en , Nev. Fai lu re t o s ub st an ti at e 7/ 24 /0 9 Oak land , Cal . AAJ s pe ak er 2.4 (KA) 7/ 27 /0 9 Oak land , Cal . AAJ s pe ak er 2.1 (KA) 9/ 12 /0 9 SanDieg o, Ca l. St at e b ar 1.2 (KA) 9/ 24 /0 9 SanDieg o, Ca l. EL&L li ti ga ti on 1.1 (KA) 9/ 25 /0 9 SanDieg o, Ca l. EL&L li ti ga ti on 1.1 (KA) 10 /2 /0 9 Oak land , Cal . EL&L li ti ga ti on 2.2 (KA) 10 /1 5/ 09 Oak land , Cal . EL&L li ti ga ti on 2.3 (KA) 12 /3 /0 9 Los Cab os , Mex . EL&L li ti ga ti on 6.4 (KA) 12 /1 6/ 09 Oak land , Cal . EL&L li ti ga ti on 2.3 (KA) 12 /1 7/ 09 Las Veg as , Nev. EL&L li ti ga ti on 3.5 (KA)-2 3-

[* 23 ] 3/ 11 /1 0 Oak land , Cal . Fai lu re t o s ub st an ti at e 3/ 31 /1 0 The rm al , Cal . Fai lu re t o s ub st an ti at e 4/ 8/ 10 Ph oe ni x, Ari z. IATL con fere nc e 3.0 (KA) 6/ 9/ 10 Mi nd en , Nev. EL&L li ti ga ti on 2.5 (KA) 6/ 10 /1 0 Liv erm or e, Cal . Fai lu re t o s ub st an ti at e 6/ 13 /1 0 Mi nd en , Nev. EL&L li ti ga ti on 2.4 (KA) 7/ 1/ 10 San taRo sa , Cal . Fai lu re t o s ub st an ti at e 7/ 15 /1 0 Mi nd en , Nev. EL&L li ti ga ti on 2.7 (KA) 7/ 21 /1 0 Mi nd en , Nev. EL&L li ti ga ti on 2.3 (KA) 8/ 20 /1 0 Mo nt erey, Cal. IATL con fere nc e 3.8 (KA) 9/ 3/ 10 Las Veg as , Nev. Fai lu re t o s ub st an ti at e 11 /1 2/ 10 Lib eri a, Co st a Ri ca IATL con fere nc e 11 .0 (GIV) GIV fli gh t h ou rs 78 .6 KA fli gh t h ou rs 19 1.1