TAX COURT OPINION

Case: Daniel J. & Joyce A. Roderick
Docket Number: 23130-05S
Judge: Wells
Opinion Type: summary
Filed: 01/10/2007
Pages: 3

CAL. STAT . E f T .C . Summary Opinion 2007-6 UNITED STATES TAX COURT DANIEL J . AND JOYCE A . RODERICK , Petitioners v . COMMISSIONER OF INTERNAL REVENUE, Responden t Docket No . 23130-05S . Filed January 10, 2007 . Daniel J . and Joyce A . Roderick, pro se . James H . Brunson , for respondent . WELLS , Judge : This case was heard pursuant to the provisions of section 7463 in effect at the time the petition was filed . The decision to be entered is not reviewable by any other court, and this opinion should not be cited as authority . All section references are to the Internal Revenue Code, as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure . SAVED :JAN 1 0 2007 reference and are found as facts . At the time of filing the petition, petitioners resided in Alpharetta, Georgia . Petitioner entered into a short-term consulting agreement with his former employer, GMAC, after his position was eliminated . Petitioner submitted invoices to GMAC on February 1 and March 1, 2003, totaling $43,977 .76 and $34,967 .70, respectively, for services rendered and expenses incurred . Both invoices instructed GMAC to wire transfer payment to a Bank of America account "For Benefit of Daniel J . Roderick" and listed petitioner's Bank of America account number and Social Security number . GMAC paid petitioner's invoices on February 12 and March 26, 2003 . Despite receiving payment for the consulting services that petitioner performed for GMAC, petitioners failed to include those amounts on their 2003 tax return . Petitioners also failed to include on their 2003 tax return $7,552 in pension and annuity distribution income that petitioner received from Fidelity Investments . Discussion Petitioner concedes that he received compensation from GMAC and pension and annuity income from Fidelity Investments and that he should have reported both receipts on petitioners' 2003 tax return . Petitioner contends, however, that he transferred $39,249 .70 to Kathleen A . Mulvey (Ms . Mulvey), who performed some - 5 - professional services to GMAC and incurred $967 .70 in reimbursable expenses . Petitioner also credibly testified, and provided corroborating bank statements showing, that $19,282 and $19,967 .70 were debited from his account on February 13 and March 27, 2003, respectively . On the basis of petitioner's testimony and corroborating evidence, we conclude that petitioner was merely a conduit for the $39,249 . Accordingly, we hold that the $39,249 that petitioner received from GMAC and in turn paid to Ms . Mulvey is not includable in petitioners' gross income . Regarding the nonreimbursed business expenses petitioners seek to deduct, deductions are a matter of legislative grace . INDOPCO, Inc . v . Commissioner , 503 U .S . 79, 84 (1992) . The taxpayer bears the burden of proving he is entitled to deductions and must present adequate documentation to support any deductions claimed . Welch v . Helvering , supra at 115 ; see also Nowland v . Commissioner , 244 F .2d 450, 453 (4th Cir . 1957) (holding the taxpayer bears the "burden of proving the amount of the deductible expenses since deductions are a matter of statutory privilege and must be shown by substantial evidence") . At trial petitioner submitted numerous receipts and documentation substantiating his business expenses for taxable year 2003 . With the exception of three automobile payments to Saab Financial