TAX COURT OPINION

Case: Cacey Taylor
Docket Number: 2699-24
Judge: Goeke
Opinion Type: bench
Filed: 03/12/2025
Pages: 6

Cacey Taylor, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent United States Tax Court Washington, DC 20217 Docket No. 2699-24. ORDER Pursuant to Rule 152(b) of the Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to the Commissioner a copy of the pages of the transcript of the trial in this case before Judge Joseph Robert Goeke at San Diego, California containing his oral findings of fact and opinion rendered at the trial session at which this case was heard. In accordance with the oral findings of fact and opinion, a decision will be entered under Rule 155. (Signed) Joseph Robert Goeke Judge Served 03/12/25 2 P R O C E E D I N G S (9:19 a.m.) THE CLERK: Recalling from the calendar docket number 2699-24, Cacey Taylor. (Whereupon, a bench opinion was rendered.) 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 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 Bench Opinion by Judge Joseph Robert Goeke 3 February 27, 2025 Cacey Taylor v. Commissioner of Internal Revenue Docket No. 2699-24 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 opinion is rendered pursuant to Rule 152 and Internal Revenue Code section 7459(b). Hereinafter, section references are to the Internal Revenue Code and the previous rule reference is to the Tax Court Rules of Practice and Procedure. This case is before the Court based upon the timely petition of Respondent's Notice of Deficiency for the year 2021. The case came to trial in San Diego, California on February 24th, 2025. The Notice of Deficiency asserts a deficiency in the amount of $6,828 and a substantial tax understatement penalty of $1,366. The parties had reached agreement on certain issues prior to trial and Respondent estimated that the deficiency remaining in dispute was in the neighborhood of $5,000 and Respondent continued to assert the addition to tax. In addition to questions about the proper deductions associated with the Petitioner's income from 4 Uber Technologies, Inc. and other entities relative to his use of an automobile to deliver goods or transport people, Respondent asserted adjustments based upon Petitioner's failure to report certain income items and a forgiveness of indebtedness item. Petitioner did not dispute these items^in court and the Court will not address those further, but will sustain Respondent's adjustment because of Petitioner's failure to produce any evidence disputing the adjustments for unreported interest income and cancellation of indebtedness income. Regarding the Uber transportation income and the DoorDash related income, the Court, at trial, spent significant time trying to elicit from the Petitioner a way in which the Court could estimate Petitioner's mileage associated with these business activities. Petitioner consistently stated that he, at the time he filed the return, had an app on his phone which showed a total amount of miles which would have wiped out all of his income, but he chose not to use those miles and therefore he did not think he owed any tax. He also admitted that he no longer had that information and he never clarified whether the income associated with his Uber and DoorDash activities was the only basis for the miles that was captured on this alleged app. 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 and the addition to taxJRG 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 Given the lack of clarity and specific 5 information underlying these assertions, the Court then attempted repeatedly to elicit from the Petitioner specific information that could be used to estimate additional miles other than those allowed by Respondent at trial associated with his driving activities. Petitioner just declined to do that, repeatedly. Accordingly, the Court has to address this case based upon the limited record and available information concerning Petitioner's mileage related to his Uber and DoorDash activities. The record at trial consisted of Petitioner's testimony and a Stipulation of Facts and associated exhibits. It does not contain any mileage log or any specific testimony from the Petitioner about his mileage, as previously stated. In attempting to reconstruct the situation and determine whether there was any basis to allow additional mileage to Petitioner, the Court researched cases that were in point. In reference to a similar situation in Hagos v. Commissioner, T.C. Memo. 2018-166, the Court found that while it very well may have been that the Petitioner in question incurred miles that likely would have been deductible, there was no evidence to determine the amount of those miles or how they should be determined and that it was inappropriate for the Court to simply guess as to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 the appropriate mileage. 6 We note for the record that the strict substantiation requirements of section 274(d) do not apply with respect to expenses reported to properly used vehicles in a trade or business of transporting persons for compensation pursuant to section 280F(d)(4)(C). However, even in those situations, there must be sufficient evidence to determine the appropriate mileage. Nurumbi v. Commissioner, T.C. Memo. 2021-79, holds to that effect and we find that even applying the well established case law of estimating business expenses, we cannot make such an estimate without some significant basis in the record on which to do that. And accordingly, we sustain the amounts allowed by the Respondent at trial as the only amount of mileage that Petitioner is entitled 16 to deduct. Based upon the parties previous agreements and the information stated in the Stipulation of Facts, a Rule 155 computation will be necessary. This ends the Court's oral findings of fact and opinion in this case. (Whereupon, at 9:26 a.m., the above-entitled matter was concluded.) 17 18 19 20 21 22 23 24 25