TAX COURT OPINION

Case: J. Kevin & Kimberly Lloyd
Docket Number: 7725-07S
Judge: Colvin
Opinion Type: bench
Filed: 05/22/2008
Pages: 8

ADM . RECORDE D SERVICE FILE S UNITED STATES TAX COURT WASHINGTON, D.C. 0217 J . KEVIN and KIMBERLY LLOY D Petitioners, * V. Docket No . 7725-07S COMMISSIONER OF INTERNAL REVENU E Respondent . * * ORDE R Pursuant to Rule 152(b), Tax Cour ; 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 trial of the above case before Judge Joseph R . Goeke at Cincinnati, Ohio, on April 30, 2008, containing his oral findings of fact nd opinion rendered at the conclusion of trial . In accordance with the oral findings of fact and opinion, decision will be entered under Rule 155 . (Signed) Joseph Robert Goeke Judge DATED : Washington, D .C . May 22, 2008 SERVED MAY 2 3 2008 3 1 Bench Opinion by Judge Joseph Robe t Goeke April 30, 2008 2 Lloyd v . Commissioner Docket No . 7725-07 S 3 4 THE COURT : The Court ha s decided to render Ora l 5 Findings of Fact and opinion in th is case and the following 6 represents the Court's Oral Findings of Fact and Opinion . 7 The Oral Findings of Fact and Opinion shall not be relied 8 upon as precedent in any other case . 9 This Bench Opinion is made pursuant to Sectio n 10 7459(b) of the Internal Revenue Code and Rule 152 of the Tax 11 Court Rules of Practice and Procedure . Section references 12 in this Bench Opinion are to the Internal Revenue Code . 13 This case was heard pursuant to the provisions of 14 Section 7463 in effect when the petition was filed . 15 Pursuant to Section 7463(b) the decision to be entered is 16 not reviewable by any other Court . And this opinion shall 17 not be treated as precedent for an other case . 18 Petitioner, J . Kevin Lloyd, appeared pro se and 19 Respondent was represented by Christina Steinbrunner . 20 Some of the facts have been stipulated and those 21 facts are so found . This case is based upon Respondent's 22 income tax deficiency determinations for 2002 and 2003 in 23 the amounts of $2,822 and $6,617 .50, respectively . 24 Respondent also determined an addition to tax under Section 25 6662(a) in the amount of $1,323 .50 for the year 2003 . Heritage Reporting Corporatio n (202) 628-4688 4 1 Petitioners filed Federal Income Tax Returns fo r 2 2002 and 2003 . Respondent's defici ncy determinations found 3 Petitioners were not entitled to ce tain Schedule C expense s 4 claimed on those income tax return s 5 Respondent's adjustments were as follows . Fo r 6 7 2003, car and truck expense was di s llowed in the amount o f $2,940 . Depreciation expense wa s isallowed in the amount 8 of $3,781 . Repairs and maintenanc expense was disallowe d 9 in the amount of $231 . Travel exp nse was disallowed in th e 10 amount of $802 . Utilities expense in the amount of $305 and 11 other expenses in the amount of $ 7 1 . 12 For 2003 car and truck e pense was disallowed i n 13 the amount of $4,580 . Depreciatio expense in the amount o f 14 $18,046 . Repairs/maintenance in t e amount of $766 . Trave l 15 in the amount of $747 . Utilitie s n the amount of $313 . 16 Other expenses in the amount of $ 7 68 . 17 Respondent's notice of eficiency also reduce d 18 gross receipts by the amounts of 1,450 and $850 for th e 19 taxable years 2002 and 2003, resp ctively . And Respondent 20 made computational adjustments t o self-employment tax, chil d 21 tax credit, additional child ta x redit, earned income 22 credit and gains or losses on For m 4797, due to th e 23 adjustments to income . 24 Petitioners had claimed for 2002, $3,710 of ca r 25 and travel expense and $4,511 of depreciation expense, an d Heritage Reportin Corporation (202) 628-4888 5 1 $7,379 of other expenses . So certain of those categories of 2 expense were allowed by Respondent in 2002 . 3 For 2003 Petitioners had claimed $5,697 of car and 4 travel expense ; $19,178 of depreciation ; $961 of trave l 5 expense ; and $1,972 of other expenses . So, once again, 6 certain of the claimed expenses i those categories were 7 allowed by Respondent in 2003 . 8 In 2002 and 2003 Mr . Lloyd was the church 9 evangelist of the Pentecostal Lighthouse Church i n 10 Indianapolis, Indiana . As such, he received non-employee 11 compensation in the context of work at that church and for 12 revival work he did away from the Pentecostal Lighthouse 13 Church . 14 Petitioners and their minor child traveled in a 15 trailer to various revival sites and would return to the 16 Pentecostal Lighthouse parking to as the revival schedule 17 permitted . 18 The records stipulated by the parties and the 19 testimony of the Petitioner, Mr . Lloyd, establish that he 20 drove, in pursuant to appearing a these revivals, 14,128 21 miles in 2002 and 11,810 miles in 2003 . 22 The key issue in this case is whether the travel 23 by the Petitioners away from the Pentecostal Lighthous e 24 Church was travel away from home which can be deductible 25 under Section 162 of the Internal Revenue Code . Heritage Reporting Corporation (202) 628-4888 1 Respondent maintains that 2 an established tax home in 2002 an d 3 these expenses are not deductible . 4 This issue is determined n the record before us 5 and is not decided on the basis of he burden of proof . 6 However, with respect to certain o f the expenses in issue , 7 the burden of proof does become im ortant . 8 With respect to the exp e ses associated wit h 9 automobile cost and maintenance , determine that the 10 burden of proof does shift to Resp ndent under Section 11 7491(a)(2) . With respect to the o her expenses claimed, 12 'Petitioner has not made a sufficie t showing to shift th e 13 burden of proof to Respondent unde Section 7491 . 14 So as to travel expenses other expenses and 15 utilities claimed by the Petitione the burden remains upon 16 the Petitioners to establish and s bstantiate those expenses 17 and meet the requirements of Sect i n 274 as applicable t o 18 the travel expenses . 19 Also, Petitioner mainta 20 to the travel and utilities expe n 21 between the expenses associated th the business activities 22 of Mr . Lloyd and the maintenanc e nd personal expenses of 23 the rest of the family associated with their travels around 24 the country . 25 A taxpayer may deduct r Heritage Reporting (202) 628- 7 1 2 3 4 travel expenses such as vehicle, me is, lodging expenses incurred while away from home in th pursuant of trade or business . Section 162(a)(2) and Se tion 262(a) . A taxpayer must show tha he or she was away from 5 home when he or she incurred the expenses and that th e 6 7 8 expenses claimed were reasonable a necessary . Commissioner v Flowers, 326 US 46 5 470 (1946) . The determination of wh e her the taxpayer ha s estion of fact . The 10 purpose of the deduction for expe n es incurred away from 11 home is to alleviate the burden o the taxpayer whos e 12 business needs require him or her to maintain two homes and , 13 therefore, incur duplicate expen s The word "home" for pu r oses of Section 162(a)(2) 15 has a special meaning in this con ext . It generally refers 17 not the taxpayer' s personal resid nce . Daly v Commissioner, 18 72 TC 190, 195 (1979), affirmed 6 2 F . 2d 253 (4th Cir , cipal place of employment , 19 1981) 2 0 on is whether Petitioner 21 husband, Mr . Lloyd, had sufficie t business contacts wit h 22 the Pentecostal Lighthouse Churc such that it was his 23 principal place of business and, therefore, his tax home . 24 We believe the record establishe that there was both a 25 religious and business connectio between Mr . Lloyd' s Heritage Reportin Corporation (202) 628-4888 8 1 revival activities and the Pentecos al Lighthouse Church and 2 that he turned to that church as hi central focus and that 3 he relied upon the mentoring of the pastor of that church as 4 endorsing and establishing his cre ibility in the context o f 5 giving revivals . 6 Therefore, we find that he automobile expenses 7 traveling to and from the Pentecos al Lighthouse Church are 8 deductible because they would have been away from th e 9 taxpayer's principal place of bus i ess . 10 The difficulty in this c se then becomes the 11 substantiation question with respe t to the expense s 12 claimed . Since we determined that the burden of proof has 13 shifted to Respondent with respect to the car and truck 14 expenses and the associated deprec ation, we find that in 15 2002 the car and truck expenses cl imed which wer e 16 disallowed in the amount of $2,940 are allowable and that 17 the depreciation in 2002 associate with the automobile in 18 the amount of $3,781 is allowable . Likewise, we find the 19 repair and maintenance of $231 is allowable in 2002 . 20 In 2003, it is obvious hat some of the 21 depreciation is not associated wi h the automobile and in 22 that context the burden remains u on the Petitioners t o 23 establish which portion is deductible . As Mr . Lloyd stated 24 at trial, he agrees that the depr ciation associated with 25 the trailer is not deductible . T e Petitioners not having Heritage Reporting Corporatio n (202) 628- 888 1 0 1 we've allowed exceeded the standard mileage . 2 This case will be submitted for Rule 15 5 3 computation in accord with the Court's finding and the 4 parties' stipulations . 5 With respect to the addition to tax under Section 6 6662(a), we find that there was a reasonable basis fo r 7 Petitioners position on the 2003 income tax return and that 8 Petitioners made sufficient disclosures, such that the 9 addition to tax is not applicable for 2003 . 10 This concludes the Court's Oral Findings of Fac t 11 and opinion in this case . 12 (Whereupon, at 1 :33 p .m . , the bench opinion in the 13 above-entitled matter was concluded .) 14 15 16 17 18 19 20 21 22 2 3 24 25 Heritage ReportinglCorporation (202) 628-4'i888