TAX COURT OPINION

Case: Ralph B. Lowis
Docket Number: 24536-07S
Judge: Colvin
Opinion Type: bench
Filed: 05/28/2010
Pages: 7

UNITED STATES TAX COURT WASHINGTON, DC 2021 7 RALPH B . LOWIS, Petitioner, v . ) Docket No . 24536-07S COMMISSIONER OF INTERNAL REVENUE , Respondent . O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewith to petitioners and to respondent a copy of the pages of the transcript of the proceedings in the above case before Judge Laurence J . Whalen at St . Paul, Minnesota, containing his oral findings of fact and opinion rendered on April 15, 2010 . In accordance with the oral findings of fact and opinion, decision will be entered for respondent . (Signed ) Laurence J . Whalen Judg e Dated : Washington, D .C . May 28, 2010 SERVED JUN - 2 2010 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 Bench Opinion by Senior Judge Laurence J . Whale n Ralph B . Lowis , Docket 24536-07 S April 15, 201 0 I . The Court has decided to render ora l findings of fact and opinion in this case , and the following represents the Court's oral findings of fac t and opinion . II . This case was heard as a small tax cas e pursuant to the provisions of section 7463 of th e Internal Revenue Code of 1986, as amended, and Rule s 170 through 175, of the Tax Court Rules of Practic e and Procedure . Hereinafter , all section numbers refe r to the Internal Revenue Code , as amended , and all Rul e references are to the Tax Court Rules of Practice an d Procedure . III . This bench opinion is made pursuant to the authority granted by section 7459 (b) and Rule 152 . IV . Mr . Ralph B . Lowis, petitioner , appeared i n these proceedings on his own behalf and Mr . David L . Zoss, Esquire, appeared on behalf of respondent . Heritage Reporting Corporation (202) 628-4888 4 1 V . 2 Respondent determined a deficiency i n 3 petitioner ' s 2005 income tax in the amount of $9,225 . 4 That deficiency was based upon three adjustments . 5 First, respondent disallowed an itemized deduction of 6 $6,122 that petitioner claimed on his return fo r 7 contributions . Second, respondent disallowed a n 8 itemized deduction of $10,958 that petitioner claimed 9 on his return for miscellaneous deductions subject to 10 the adjusted gross income limitation . Third , 11 respondent disallowed $ 26,898 of an itemized deduction 12 in the amount of $32,141 that petitioner claimed on 13 his return for medical , dental, and insurance 14 premiums . 15 On November 5, 2008, the parties filed 16 Stipulation of Settled Issues .in which petitioner 17 conceded the first two adjustments described above . 18 Therefore , the only issue remaining for decision in 19 this case is whether petitioner is entitled to a n 20 itemized deduction for medical expenses in the amount 21 of $26,898 . 22 VI . 23 Petitioner filed his petition on October 24, 24 2007 . In the petition, he stated, "I should b e 25 allowed my itemized deductions . I am able to Heritage Reporting Corporation (202) 628-4888 5 1 substantiate my expenses ." Thus, when he filed his 2 petition, petitioner knew that the only issue in the 3 case would be whether he could substantiate the 4 deductions claimed on his return , including his 5 medical expenses . 6 Petitioner's case was initially set fo r 7 trial on November 3, 2008 . When the case was called 8 on that date , petitioner failed to appear . He 9 appeared when the case was recalled two days later . 10 At that time, petitioner joined in the filing of a 11 Stipulation of Settled Issues in which he conceded the 12 two issues described above and, in effect, he agreed 13 to resolve the medical expense issue based upon a 14 review of certain records to be received from the 15 opposing party in a medical malpractice litigation . 16 Subsequently, on December 23, 2008, the 17 parties filed Joint Status Report with the Court in 18 which petitioner acknowledged that he had received 19 "copies of his 2005 medical records from his medical 20 malpractice case attorney " and he further represented 21 that he believed he would "be able to complete a 22 review of those medical records to determine the 23 expenses for 2005 deducted on his Schedule A for that 24 year and provide the relevant material to counsel for 25 respondent within 30 days . " Heritage Reporting Corporation (202) 628-4888 6 1 Thirty days came and went and petitione r 2 provided no records to respondent . Accordingly, the 3 case was set a second time for trial on April 12 , 4 2010 . When the case was called at that time, 5 petitioner appeared and presented a five-pag e 6 statement consisting of a general description o f 7 certain medical problems that petitioner claims t o 8 have suffered . He presented no substantiation for the 9 remaining medical expenses at issue . Petitioner' s 10 letter is attached to the transcript of that 11 proceeding . 12 VII . ) 13 We begin with several fundamental principles 14 of tax litigation . First, as a general rule, the 15 Commissioner ' s determinations are presumed correct, 16 and the taxpayer bears the burden of proving that 17 those determinations are erroneous . Rule 142(a) . 18 This principle was firmly established by the United 19 States Supreme Court as early as 1933 and has been 20 reaffirmed by the Supreme Court as recently as 1992 . 21 See INDOPCO Inc . v . Commissioner , 503 U .S . 79 at 84 22 (1992) . 23 Second , deductions are a matter of 24 legislative grace, and the taxpayer bears the burden 25 of proving that he or she is entitled to any deduction Heritage Reporting Corporatio n (202) 628-4888 7 1 claimed . Rule 142(a) ; Deputy v . duPont , 308 U .S . 488 2 at 493 (1940) ; New Colonial Ice Co . v . Helvering, 292 3 U .S . 435 at 440 (1934) ; Welch v . Helvering, supra . 4 This includes the burden of substantiation . Hradesky 5 v . Commissioner , 65 T .C . 87 at 90 (1975), affd . per 6 curiam 540 F .2d 821 (5th Cir . 1976) . 7 Third, a party's failure to introduc e 8 documentary evidence which is within his possession or 9 control, and which, if true, would be favorable t o 10 him, gives rise to the presumption that, if produced, 11 such evidence would be unfavorable . Recklitis v . 12 13 Commissioner , 91 T .C . 874 at 890 (1988) ; Pollack v . Commissioner , 47 T .C . 92 at 108 (1966), affd . 392 F .2d 14 409 (5th Cir . 1968) ; Wichita Terminal Elevator Co . v . 15 Commissioner , 6 T .C . 1158 at 1165 (1946), affd . 16 2 16 F .2d 513 (10th Cir . 1947) . 17 VIII . 18 Petitioner has presented nothing t o 19 substantiate the subject medical expenses . Rather, he 20 argues that the Court should read the statement that 21 he has provided, and it should allow the medica l 22 expenses at issue based upon an overall evaluation of 23 his situation . We are not able to do that . 24 Respondent allowed $5,243 of the medica l 25 expenses claimed on petitioner's return, $32,141, and, Heritage Reporting Corporatio n (202) 628-4888 8 1 when petitioner filed his petition in October of 2007, 2 it was clear that substantiation of the remaining 3 amount, $26,898, would be a major issue in the case . 4 Petitioner acknowledged receiving copies of his 2005 5 medical records from his medical malpractice cas e 6 attorney in December of 2008 . Petitioner has ha d 7 ample time to review those records, and yet, he ha s 8 provided no substantiation . We conclude that there is 9 no substantiation of the subject medical expenses . 10 11 12 13 Recklitis v . Commissioner , supra ; Pollack v . Commissioner , supra ; Wichita Terminal Elevator Co . v . Commissioner , supra . IX . 14 In order to give effect to the foregoing, 15 decision will be entered for respondent . 16 X . 17 This concludes the Court's oral findings of 18 fact and opinion in this case . 19 (Whereupon, at 4 :39 p .m ., the bench opinion 20 in the above-entitled matter was concluded . ) 21 2 2 23 2 4 25 Heritage Reporting Corporation (202) 628-4888