TAX COURT OPINION

Case: Anessa L. Daniels
Docket Number: 17719-07S
Judge: Colvin
Opinion Type: bench
Filed: 01/21/2009
Pages: 10

UNITED STATES TAX COURT WASHINGTON, D .C . 2021 7 ANESSA L . DANIELS, Petitioner , v . ) Docket No . 17719-07S 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 petitioner and to respondent (cid:127)a transcript of-the trial of the above case before Special Trial Judge Lewis R . Carluzzo at : New York , New York , ( Westbury, New York) on December 5, 2008 ,1 containing his oral findings of fact and opinion rendered at the conclusion of trial . copy of the pages of the In accordance with the oral findings of fact and opinion, decision will be entered or respondent . (Signed ) Lewis R. Carluzzo Special Trial Judg e Dated : Washington, D .C . .January 16, 2009 SERVED JAN 21 2000 3 1 Bench Opinion by Speial Trial Judge Lewis R . Carluzzo, Jr . 2 December 5, 200 8 3 Daniels v . Commissioner Docket No . 17719-07 S 4 THE COURT : , The Court has decided to render ora l I 5 findings of fact and opinion in this case , and the following 6 represents the Court s oral findings of fact and opinion . 7 The oral findings offact and the opinion shall not be 8 relied upon as precedent in any other case . 9 This proceeding for the redetermination of a 10 deficiency is a Small Tax Case conducted pursuant to the 11 provisions of Section 7463 of the Internal Revenue Code o f 12 1986, as amended , and Rules 170 through 175 of the Tax Cour t 13 Rules of Practice and Procedure . 14 This Benchiopinion is made pursuant to th e 15 authority granted by'Section 7459(b) of the Internal Revenue 16 Code of 1986, as amended , and Rule 152 of the Tax Cour t 17 Rules of Practice and Procedure . 18 Hereinafter, in this Bench Opinion, unles s 19 otherwise specified,isection references are to the Internal 20 Revenue Code of 1986 1 , as amended, in effect for 2004 . The 21 rule references are ito the Tax Court Rules of Practice and 22 Procedure . 23, Anessa L . Daniels appeared pro se . Monica Koch 24 appeared on behalf of Respondent . 25 In a notice of deficiency dated June 29, 2007, Heritage Reporting Corporatio n (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 Respondent determined a $3,092 deficiency in Petitioner' s 4 2004 Federal Income Tax . The issues for decision are : (1) Whether Petitioner is entitled to an itemize d deduction for .mortgage interest ; (2) Whether Petitioner is entitled to an itemize d deduction in excess of the amount allowed by Respondent fo r charitable contributions ; (3) Whether Petitioner is entitled to an itemize d deduction for unreimbursed employee business expenses ; and , (4) Whether Petitioner is entitled to an itemize d deduction for travel between jobs . Some of the facts have been stipulated and are s o found . At the time the Petition was filed, Petitione r resided in New York .j Petitioner lived in an apartmen t (condominium unit) that she rented during 2004 . She did not have any ownership interest in the condominium unit, and sh e did not own any other real estate during that year . At the beginning of 2004, Petitioner was employe d as a network engineer by Cable and Wireless Interne t Services, Inc . (Cable) . At some point during that year , Cable was acquired by Savvis Communications Corp . (Savvis) . Although her job title changed following th e takeover, her job responsibilities pretty much remained th e Heritage Reporting Corporation (202) 628-4888 e 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 same . In addition' to other responsibilities with eac h employer , Petitioner made cable installations that require d her to work while lying on the floor or crawling in o r through tight areas . Generally , she wore navy blue khak i pants and a matchingishirt when she did so (Petitioner' s work clothes ) . Petitioner' s work clothes did not contai n any logo or other markings identifying her employer, and i t was not unusual for the clothes to become soiled and damage d during an installation . From time to time during the year, Petitioner wa s required to purchase, supplies or equipment in order t o complete a cable installation at a customer ' s location . Petitioner and her children have regularl y attended religious services during 2004 , although not alway s at the same church or the same religious organization . Sh e made cash contributions to the various churches and recorde d the contributions ii a log that she kept for that purpose . During a move from one residence to another , Petitioner' s log was lost . Petitioner ' s timely filed 2004 Federal Income Tax return was prepared by a paid income tax return preparer . There is a Schedule { A, Miscellaneous Itemized Deductions , included with that r eturn . As relevant here, on that Schedule A, Petitione r Heritage Reporting Corporation (202) 628-4888 e f 6 claimed the following deductions in the following amounts : (1) (2) Home mortgage interest, $996 ; Charitable contributions, $9,509 (consistin g of $9,021 in cash contributions and $488 of propert y contributions) ; (3) Unreimbursed employee business expenses o f $3,379 ; and (4) 'Travel to second job,' $511 . In a Form 2106, Employee Business Expenses, als o included with Petit ioner's 2004 return, $1,736 of the amoun t shown for employee b usiness expenses is attributable't o amounts shown for the following : vehicle expenses, $83 3 (computed by multiplying the then-standard mileage rate o f 37 .5 cents per mile to 2,221 miles that Petitioner claims t o have driven for business purposes) ; parking fees, $193 ; an d other 'business expenses,' $710 . } The remaining portion of the unreimbursed employe e business expense deduction consists of amounts shown fo r technical publications ($414), uniforms and maintenanc e 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20, ($279) ; and union du es/professional dues of $950 . 21 22 23 24 25 Taking int o account the above amounts, reduced i n accordance with theflimitations of Section 67(a), th e Schedule A shows a miscellaneous itemized deduction o f $1,826 . In the abo ve-referenced notice of deficiency , Heritage Reporting Corporation (202)1628-4888 7 1 Respondent : 2 (1) Disallowed the entire amount of the mortgage 3 interest deduction ; 4 (2) Disallowed $8,991 of the charitable 5 contributions deduction ; and 6 (3) Disallowed $1,451 of the miscellaneou s 7 itemized deduction . 8 All of the issues in this case involve disallowe d 9 deductions . As we have observed in countless opinions , .10 deductions area matter of legislative grace and generally 11 the taxpayer bears tIhe burden of proof to establis h 12 entitlement to any claimed deduction . Section 7491(a) ; 13 Rule 142(a) ; INDOPCO, Inc . . v . Commissioner, 503 U .S . 79, 84 14 (1992) ; New Colonial Ice Co . v . Helvering, 292 U .S . 435, 44 0 15 (1934) 1.6 17 The taxpayer's burden requires the taxpayer : (1) To identify a specific statute that allow s 18 for the deduction claimed ; and f 19 (2) To substantiate any such deduction by keepin g 20 and producing for the Commissioner's inspection adequate 21 records that show the expense has been paid or incurred . 22 Section 6001 ; Hradelky v . Commissioner, 65 T .C . 87, 90 23 (1975), affd . per criam 540 F .2d 821 (5th Cir . 1976) ; 24 Meneguzzo v . Commissioner, 43 T .C . 824, 831-832 (1965) . 25 1 . Mortgage Interest Deduction . Subject t o Heritage Reporting Corporation (202) 628-4888 8 1 various conditions and limitations, an individual i s 2 entitled to deduct interest paid or accrued on indebtedness 3 incurred in connection with the individual's 'qualifie d 4 residence .' See Section 163(h)(2)(D) and (3) . 1 5 We need not'discuss those various conditions an d 6 limitations because Petitioner now concedes that she is no t 7 entitled to the mortgage interest deduction here in dispute . 8 Respondent's disallowance of that deduction is sustained . 1 9 2 . Charitable Contributions Deduction . I n 10 general, a taxpayer "s allowed to deduct any contributions 11 or gifts made to qualifying organizations for their use . 12 See Section 170(a) . 13 Section 1 .170A-13(a)(1), Income Tax Regs, requires 14 that charitable contribution deductions, whether made b y 15 cash or otherwise, be substantiated by at least one of the 16 following : 17 (1) A canceled check ; 18 (2) A receipt or letter from the donee charitable 19 organization showing the name of the donee, the date of the 20 contribution and the amount of the contribution ; 21 (3) In the absence of a canceled check, receipt, 22 or letter from the donee charitable organization, othe r 23 reliable written records showing the name of the donee, the 24 date of the contribution and the amount of the contribution . 25 If the donation is a small amount, any written or Heritage Reporting Corporation (202) 628-4888 9 1 other evidence from the donee charitable organization 2 acknowledging receipt is generally sufficient . Th e 3 reliability of the records is determined on the basis of all 4 relevant facts and circumstances . See Section 5 1 .170A-13( a)(2)©, Income Tax Regs . 6 The disallowed portion of Petitioner's charitable 7 contribution deduction, all of which is attributable t o 8 contributions made in cash, is subject to the rules just 9 stated . We accept Petitioner's claim that she kept a 10 written log in which the details of her contributions ar e 11 recorded and that the log was lost when she moved from one 12 residence to another . The loss of her records, however, in 13 no way excuses the requirement that the deduction b e 14 substantiated . If substantiating documents have been lost 15 through no fault of the taxpayer, the taxpayer is obligated 16 to make reasonable attempts to reconstruct those records . 17 See, e .g ., Malinowski v . Commissioner, 71 T .C . 1120, 1124- 18- 1125 (1975) ; Section 1 .274-5T(c)(5), Temporary Income Tax 19 Regs ., 50 Federal Register 46022 (November 6, 1985) . 20 Here, no such attempts have been made . Petitioner 21 is not entitled to a charitable contribution deduction in 22 excess of the amoun allowed by Respondent . 23 3 . Unreimbursed Employee Business Expenses an d 24 Travel Between Jobs Deductions . In general, a taxpayer i s 25 entitled to a deduction for all ordinary and necessary Heritage Reporting Corporatio n (202) 628=4888 1 0 1 expenses paid or incurred during the taxable year i n 2 carrying on a trade or business . See Section 162(a) . The 3 term 'trade or business', as used in Section 162(a) , } 4 includes the trade or business of being an employee . 5 Primuth v . Commissioner, 54 T .C . 374, 377 (1970) ; 6 Christensen v . Comm issioner , 17 T .C . 1456 ( 1952) . 7 Nevertheless, little point would be served by 8 burdening this bench opinion with a detailed discussio n I 9 relating to the technical requirements necessary to allow 10 trade or business expense deductions for certain of the 11 expenses included in' the unreimbursed employee expens e 12 deduction claimed on Petitioner's Return . (For example , 13 whether the nature of certain clothing Petitioner wore while 14 working could give rise to a deduction for the cost o r 15 maintenance of thaticlothing . See, for example, Yeomans v . 16 Commissioner, 30 T .C . 757, 767-768 (1958) . Or whethe r 17 Petitioner was entitled to reimbursement from her employer 18 for the use of her vehicle or cost of supplies . See, for 19 example, Orvis v . Commissioner, 788 F .2d 1406, 1408 (9th 20 Cir . 1986) affg . T .C . Memo . 1984-533 ; Section 1 .162-17 , 21 Income Tax Regs . ) 22 As with the charitable contribution deduction, th e 23 lack of substantiating evidence, coupled with Petitioner's 24 failure to make reasonable attempts to reconstruct any los t 25 records that might Piave provided the necessar y Heritage Reporting Corporation (202) 628-4888 4 1 substantiation, is fatal to her entitlement to the portion 2 of the miscellaneous itemized deduction attributable t o 1 1 3 unreimbursed employee business expenses and mileage between 4 jobs . Respondent's disallowances of those items are 1 5 sustained . 6 To reflect ithe foregoing, decision will be entere d for Respondent . 8 This concludes the Court's oral findings of fac t 9 and opinion in this lase . 10 (Whereupon,''! at 11 :14 a .m ., the bench opinion in 11 the above-entitled matter was concluded . ) 12 13 14 15 16 17 18 19 20 21 22 2 3 24 25 Heritage Reporting Corporation (202) 628-4888