TAX COURT OPINION

Case: Salif Coulibaly
Docket Number: 5831-23
Judge: Jones
Opinion Type: bench
Filed: 04/22/2025
Pages: 12

SALIF COULIBALY, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent United States Tax Court Washington, DC 20217 Docket No. 5831-23. ORDER OF SERVICE OF TRANSCRIPT 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 Courtney D. Jones at Philadelphia, Pennsylvania, on February 24, 2025, containing Judge Jones's oral findings of fact and opinion rendered at the conclusion of the trial. In accordance with the oral findings of fact and opinion, decision will be entered under Tax Court Rule 155 in due course. It is further ORDERED that, on or before May 22, 2025, the parties shall submit computations under Tax Court Rule 155. (Signed) Courtney D. Jones Judge Served 04/22/25 RECEIVED 3/24/25 IN THE UNITED STATES TAX COURT In the Matter of: SALIF COULIBALY, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. Docket No. 5831-23 ) ) ) ) ) ) ) ) ) ) ) ) Pages: 1 through 10 Place: Philadelphia, Pennsylvania Date: February 24, 2025 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 IN THE UNITED STATES TAX COURT In the Matter of: SALIF COULIBALY, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. Docket No. 5831-23 ) ) ) ) ) ) ) ) ) ) ) ) U.S. Custom House 200 Chestnut Street Room 300, 3rd Floor Philadelphia, Pennsylvania 19106 February 24, 2025 The above-entitled matter came on for bench opinion, pursuant to notice at 5:12 p.m. HONORABLE COURTNEY D. JONES Judge BEFORE: APPEARANCES: For the Petitioner: No Appearance For the Respondent: No Appearance 2 P R O C E E D I N G S (5:12 p.m.) THE CLERK: Docket number 5831-23, Salif Coulibaly. (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 Courtney D. Jones February 24, 2025 3 Salif Coulibaly v. Commissioner of Internal Revenue Docket No. 5831-23 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 may not be relied upon as precedent in any other case. The oral findings of fact and opinion are made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code and Tax Court Rule 152. Rule references in this opinion are to the Tax Court Rules of Practice and Procedure, and section references are to the Internal Revenue Code, in effect at all relevant times. Some dollar amounts are rounded. A citation of a "Doc." in this Opinion refers to a document as numbered in the Tax Court docket record of this case. This is a deficiency case brought under section 6213 in which petitioner, Salif Coulibaly, asks us to review the determinations of the Internal Revenue Service (IRS) set forth in a Notice of Deficiency, issued to him by the IRS on January 19, 2023. Trial of this case was conducted on February 24, 2025, in Philadelphia, Pennsylvania. Petitioner was 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 represented by Christian C. Nduka. Brian E. Salisbury and 4 Roman M. Olchowecky represented the Commissioner. The parties filed and the Court received into evidence the parties' Stipulation of Facts and its Exhibits 1-J through 5-J (Doc. 17). The parties also filed a Partial Stipulation of Settled Issues (Doc. 16), leaving only one issue for trial: the Commissioner's disallowance of $32,474 of Mr. Coulibaly's reported car and truck expense for taxable year 2019. We follow the parties' stipulation and confine ourselves to that issue. We hold that Mr. Coulibaly has not satisfied the requirements of the Internal Revenue Code to substantiate the $32,474 deduction for car and truck expenses. FINDINGS OF FACT Petitioner has been working as a truck driver for 23 years. In 2019, he conducted that work under a sole proprietorship. Petitioner self-prepared his 2019 federal income tax return. On his Form 1040, petitioner reported income and expenses relating to his truck driving business on his Schedule C, Profit or Loss From Business (Sole Proprietorship). On that Schedule C, he reported car and truck expenses of $101,969. On January 19, 2023, the Commissioner mailed a Notice of Deficiency to Mr. Coulibaly in which he disallowed $32,474 of the reported car and truck expenses. 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 While residing in Philadelphia, Pennsylvania, 5 Mr. Coulibaly filed a petition in which he disputed the Notice of Deficiency. The sole issue presented at trial was whether Mr. Coulibaly substantiated his car and truck expenses. At trial, Mr. Coulibaly did not provide any documents (invoices, receipts, bank statements, or credit card statements) as substantiation. He testified that he generally paid cash for work tools, truck washings, and oil changes. To the extent that he used a debit card, he acknowledged that he had not provided bank statements substantiating those expenses to the IRS and he did not offer any such bank statements at trial. He further testified that he does not maintain a calendar of his work trips and that he unsuccessfully attempted to obtain a log for his 2019 trips. I. Burden of Proof OPINION In general, the Commissioner's determinations in a Notice of Deficiency are presumed correct, and taxpayers bear the burden of proving that they are incorrect. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Typically, taxpayers also bear the burden of proving their entitlement to any deductions. See INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992). Except when the 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 burden shifts, see § 7491(a), a taxpayer must maintain 6 sufficient records to prove that he incurred an expense and establish that a deduction is allowable under the Code, I.R.C. § 6001; Treas. Reg. § 1.6001-1(a), (e); see also Hradesky v. Commissioner, 65 T.C. 87, 89-90 (1975), aff'd, 540 F.2d 821 (5th Cir. 1976). Here, because the burden did not shift, Mr. Coulibaly bears the burden of establishing entitlement to deductions for expenses he claimed. Substantiation Requirements Section 162(a) permits a taxpayer to deduct "all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business." Proof of an ordinary and necessary expense requires more than "[a] taxpayer's general statement that expenses were paid in pursuit of a trade or business." Sham v. Commissioner, T.C. Memo. 2020-119, at *58. Personal expenses are generally not allowed as deductions. See I.R.C. § 262(a). Section 274(d) establishes higher substantiation requirements for certain expenses. Section 274(d)(3) provides, among other things, that no deduction is allowed with respect to certain expenses unless the taxpayer establishes (A) the amount of the expense or other item, (B) the time and place of the travel, (C) the business 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 purpose of the expense or other item, and (D) the business 7 relationship to the taxpayer of the person receiving the benefit. I.R.C. § 274(d) (flush language); I.R.C. § 280F(d)(4); Temp. Treas. Reg. § 1.274-5T(b)(6); see also Boyd v. Commissioner, 122 T.C. 305, 313, 320 (2004) (discussing the relationship between section 162 and section 274). For certain kinds of business expenses, including vehicle and travel expenses, section 274(d) imposes heightened substantiation requirements. See, e.g., Kamal v. Commissioner, T.C. Memo. 2023-80, at *21. To meet this requirement the taxpayer must maintain an "account book, diary, log, statement of expense, trip sheets, or similar record," Temp. Treas. Reg. § 1.274- 5T(c)(2)(i), and "documentary evidence, such as receipts, paid bills, or similar evidence," Treas. Reg. § 1.274- 5(c)(2)(iii). A taxpayer may satisfy these requirements by providing other corroborating evidence, including the taxpayer's own statements. I.R.C. § 274(d); Temp. Treas. Reg. § 1.274-5T(c)(3). II. Mr. Coulibaly Failed to Substantiate His Entitlement 22 to Deductions 23 24 25 Mr. Coulibaly is not entitled to the deductions associated with the car and truck expenses that he claimed. At trial, Mr. Coulibaly did not provide an 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 "account book, diary, log, statement of expense, trip 8 sheets, or similar record." While he testified credibly that he attempted to obtain such a log for 2019, the Court is left without documentary evidence. Mr. Coulibaly's testimony alone does not satisfy the requirements of section 274(d). See § 274(d) (flush language) (requiring sufficient evidence that corroborates the taxpayer's own statement); Temp. Treas. Reg. § 1.274-5T(c)(2)(i). Moreover, he did not provide any documentary evidence of the claimed expenses, such as receipts, paid bills, bank statements, or similar evidence. Treas. Reg. § 1.274- 5(c)(2)(iii). While he testified credibly that he drove throughout several states on the East Coast and in the Midwest, he acknowledged that he did not provide the IRS with documentation of the associated claimed expenses. Accordingly, he lacked the required documentary evidence at trial. And he did not provide specific dates, locations, or the distance of any such travel. See § 274(d) (requiring the time and place of the travel). It is not too much to expect such information from an experienced truck driver such as Mr. Coulibaly. 22 III. Conclusion 23 24 25 In sum, Mr. Coulibaly failed to substantiate the Schedule C car and truck expenses in the amount disallowed by the Commissioner. Decision will be entered under Rule 155. 9 This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 5:22 p.m., the above-entitled matter was concluded.) 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 CERTIFICATE OF TRANSCRIBER AND PROOFREADER 10 CASE NAME: Salif Coulibaly v. Commissioner DOCKET NO.: 5831-23 We, the undersigned, do hereby certify that the foregoing pages, numbers 1 through 10 inclusive, are the true, accurate and complete transcript prepared from the verbal recording made by electronic recording by Jennifer L. Lindeman on February 24, 2025 before the United States Tax Court at its session in Philadelphia, PA, in accordance with the applicable provisions of the current verbatim reporting contract of the Court and have verified the accuracy of the transcript by comparing the typewritten transcript against the verbal recording. _______________________________________________ Susan Patterson, CDLT-174 3/13/25 Transcriber Date _______________________________________________ Traci Fine, CDLT-169 Proofreader 3/23/25 Date