TAX COURT OPINION

Case: David Richard Cormier
Docket Number: 25688-09
Judge: Colvin
Opinion Type: bench
Filed: 02/04/2011
Pages: 5

UNITED STATES TAX COURT WASHINGTON, DC 20217 DAVID RICHARD CORMIER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) ) ) O R D E R Docket No. 25688-09. Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Judge Joseph Robert Goeke at Philadelphia, Pennsylvania, on January 25, 2011, containing his oral findings of fact and opinion rendered at the conclusion of the trial. In accordance with the oral findings of fact and opinion, a decision will be entered under Rule 155. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. February 4, 2011 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 Judge Joseph Robert Goeke January 25, 2011 Cormier v. Commissioner Docket No. 25688-09 THE COURT: The Court has decided to render oral findings of fact and opinion in this case, and the following represents the Court's oral findings of fact and opinion. The oral findings of fact and opinion shall not be relied upon as precedent in any other case. This bench opinion is rendered pursuant to Internal Revenue Code Section 7459(b) and Tax Court Rules of Practice and Procedure Rule 152(a). The bench opinion will be served upon the parties pursuant to Subsection B of the same Rule 152. Hereinafter, section references are to the Internal Revenue Code in effect for the year 2006, and rule references are to the Tax Court Rules of Practice and Procedure. This is a deficiency case involving the disallowance of $9,422.>( in claimed travel expenses 00 on the Schedule C of Petitioner's joint Federal income tax return for 2006 which was filed with Petitioner's spouse. The Petitioner bears the burden of proof to establish entitlement to these expenses under Rule 142(a) of the Tax Court Rules of Practice and Procedure. Prior to trial Respondent conceded that Heritage Reporting Corporation (202) 628-4888 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 4 Petitioner was entitled to $333.84 of lodging expense, thereby reducing the amount in dispute. At the time the petition was filed in this case Petitioner resided in Pennsylvania. Petitioner was employed as a salesman by Unisource Worldwide during 2006. The expenses in question, however, do not relate to his employment. The Schedule C expenses were claimed by the Petitioner in conjunction with his activities together with his wife for an enterprise called Travel Host, which involved the preparation of a magazine and the selling of ads. The magazine was intended to be placed in hotels and dotels and the ads were intended to inform guests at the hotels and motels of restaurants and other activities in the area where they were staying. Therefore the magazine had to be prepared and customized to the local area. Petitioner and his wife had a franchise to place the magazines in hotels and sell ads int an area in Pennsylvania. Some of the ads were involving nationwide companies and therefore some travel to the headquarters of these nationwide companies was.necessary based upon Petitioner's testimony. Respondent's disallowance of the expenses in question seems to involve the assertion that the Heritage Reporting Corporation (202) 628-4888 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 5 travel expenses were associated with Petitioner's activity as an employee and not the activities of he and his wife with respect to Travel Host. Petitioner testified at trial and reviewed documentation which Ab to Respondent . Respondent has maintained that this documentation fails to meet the requirements of Section 274 regarding travel expenses. However, with respect to certain of the expenses claimed we find Petitioner's testimony and the extensive documentation he reviewed at trial to meet the requirements of Section 274. This would be true regarding meal expenses in the amount of $3,320.28 and rental car expenses in the amount of $1,887.53. However, with respect to parking expenses we find that the receipts are not consistent with the travel associated with Travel Host in accordance with Petitioner's testimony in all respects, and we disallow as failing the requirements of Section 274 $321.85 of the $381.85 of parking expense claimede &mt a We also find that Petitioner( failed to substantiate $85 of claimed taxi expenses, and that only $19 of these claimed amounts are allowable. In reviewing Petitioner's testimony and the documentation regarding airplane flights, we uphold $277.20 of Heritage Reporting Corporation (202) 628-4888 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 6 airplane travel Petitioner has claimed together with his spouse. We also uphold the amounts of hotel travel claimed of $969.25. Regarding the cash totals under $25 of $2,586, as we previously to.a.lfled we would disallow d $85 of this amount as unsubstantiated or not properly substantiated taxi expense, and based upon Petitioner's testimony we find of the remaining $2,501 claimed $2,000 is allowable. Given the Court's determinations relative to the expenses claimed, a Rule 155 computation will be necessary. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 9:08 a.m., the bench opinion in the above-entitled matter was concluded.) // // // // // // // // // Heritage Reporting Corporation (202) 628-4888