TAX COURT OPINION

Case: Seifu Hailu Ragassa
Docket Number: 24782-07S
Judge: Goldberg
Opinion Type: summary
Filed: 11/10/2009
Pages: 21

T .C .'.Summary Opinion 2009- 166 . UNITED STATES TAX COUR T SEIFU HAILU RAGASSA, Petitioner v . 'COMMISSIONER-OF INTERNAL REVENUE,' Respondent : Seifu Hailu Ragassa, pro se :' Molly H . Donohue -, for respondent. GOLDBERG, Spec'ialTr'ial Judge : This case was heard pursuan t to the -pr'ovLsions of sectibnx7463-'of" the'(cid:127) Internal :Revenue-Code i n effect at the'time'thepetition was filed : Pursuant to "section '7463(b), the' decision to 'be entered pis ' not ° revi-ewablert'by"an y other, court,, and this . opinion --shall . not ° be-"treated as precedent for- any other"case . Unless„otherwise indicated, subsequent section re.ferences,-are- to the Internal Revenue"'Code (Code) i n SERVED NOV I 0 2000 2 - Tax Court Rules of Practice'and Procedure . Respondent determined a deficiency of $1,575 in petitioner' 2005 Federal income tax,, . The issues for decision are whethe r petitioner is entitled to business expense deductions , : cost"of . goods sold, and itemized deductions greater than the amount s The parties submitted a stipulation of facts wit h Backgroun d those exhibits by thisireference . Hampshire when he filed his petition . Petitioner isoriginally from Ethiopia, where he worked . as a journalist . Politicallly persecuted , he left in 1998 for Kenya, : He emigrated to the United States near the .end of .1999 or If beginning of 2000, settling in New Hampshire . During the year at: issue, 2005, in addition to being a student, petitioner had three Is correctly reported on his-2005 .Federal income tax . return . Petitioner's, main sour .de of income was $39,560 that he earned as a full-time employee o(cid:127) the State of New Hampshire Department-o f Corrections . Petitioner inmates who were assigned to a medium-custody facility whil e awaiting . paroleinto the community . Petitioner also earned $1,500 serving part . time as a translator and interpreter for a New Hampshire language services corporation , Words Foreign Language Translation (cid:127) & Interpreting .Services , inc . (Words )' . Petitioner speaks many languages, including Aramaic , Ethiopian, Hindi , and,Urdu . About every second or third week ,,"on weekdays whenhe was not . scheduled for work, -petitioner .would drive toa court in Maine or Massachusetts to perform >. interpreting services . The distance to the court i n Maine, petitioner's' principal destination,is7150 to 160 miles from petitioner's home . Petitioner would usually return home the same day, but on occasion, including sessions .that lasted for 2 days, petitioner would stay overnight and drive home the following day . Petitioner received a flat rate from Words of $40 per hour. Words did not pay for petitioner's travel time or reimburs e petitioner for his vehicle or .other expenses . Words issued a Form 1099-MISC, Miscellaneous Income, .=for 2005 reporting th e $1,500 as nonemployee compensation . Petitioner therefore worked a total of 37 .5 hours ($1,500 divided by $40'per hour) for Words during 2005 . Petitioner reported his'income'and expenses from his interpreting activities on Schedule C, :.Profit or Loss From Business ; a categorization that respondent' does not challenge . Petitioner's third source . of -income .was gambling winnings . On Forms W-2G, Certain Gambling Winnings, Foxwoods Resort Casin o reported that petitioner . won $3,180„in,.gambling .proceeds durin g Petitioner timely ; which respondent examined . Eddy of Ekanem Tax Services-in Bosto n prepared the tax }return and .checked the 'box as, a, .self,-employe d paid .preparer ._ . Because petitioner could not recall the , 'preparer's last name, we willhereinafter .refer to the prepare r as . Mr . Ekanem . In .a notice of deficiency, respondent .determined ° a, deficiency in Federal income, ; tax .-of $1,57 .5-arising from th e following five adjustments : Schedule C Cost of goods sold $2,004- Car & tru c Insurance 2,100 -0-3,500 $1,620 -0- k expenses .Schedule A Charitablejlcontributions 3,175 - -0-3,180 Gambling losses I - 5, 0,3 2 Burden of Proof Discussio n II. _ r general, the Commissioner's determination set forth .in .a notice deficienc y the burden of showing that the determination is in error .' Rule 5 :142(a)(1) ; Welch . v . °'Helver.ina , 290'-U .' =S . ° 111, 115,.:.,(1933) . Under section 7491,(a) the .burden',may shift to the Commissioner ' regardih factual-matters,,if the taxpayer produces :credibl e .,evidence and meets the other requirements-'of the section . ,,Petitioner does not argue that he ;"sati-sfied the elements for a burden shift, but even if he ,did' advance .- this argument , petitioner did -not produce', suf-fi'cient'evidence= to support a burden shift .' Accordingly,, the burden of :: proof -remains- on . ,- . petitioner to disprove respondent's determination"fbr .2005 . II . Procedural Matter s a t .a. Before delving into respordent's~specifi c. adjustments, petitioner asks the .Cour .t to consider to issues with 'respect to respondent's procedural conduc t A . ;Preliminary : Notice s With respect to ,the . ;first". procedural "issue,' petitione r .claims .that he .did not receive any preliminary-notices,-'such as the so-called, . 30-day "lett-er on CP2000 -notice, :that-the Interna l Revenue Service ',(IRS) ° normally sends 'toL taxpayers Therefore, petitioner contends that the IRS'deprived hire of : . an. opportunit y discuss the adjustments before= the IRS determined hi s :deficiency . .' Petitioner does nbt, .dispute ; and would; have= no . first-hand knowledge to dsPute, respondent' s assertion that-the IRS sent preliminary°notice .s by'regularv'first class mail in .Marc h and . April® 2007. Petitioner simply states that'he did . not receive registered mail the notice of deficiency . dated July 31, 2007 ., determining an income tax deficiency of $1,575 for .2005 . I The Court generally ."will not look behind a, deficiency - notice to examine the evidence used or the propriety of * * * - [the Commissioner's,] motives .or of the administrative policy .or procedure involved-in .making his determinations ." Greenberg' s Express, Inc . v . Commissioner , 62 T .C . 324, 32 7 (1974) (declining to investigate the Commissioner's,alleged failures to issue , a 30-day letter, and to offer the taxpayers a conference wit h Appeals before issuing notice-of, deficiency) . The underlyin g rationale . for this principle is that the Court conducts it s proceedings de novo, deciding a taxpayer's tax liability on'th e merits of the case and Commissioner has developed at-the administrative level . Id . As long as the notice of deficiency-reveals on,its,face that the Commissioner has made a .determination for a particular year',., in,a particular ., amount ; and after reviewing, information,, specific to the particular taxpayer, then barring unusual facts o r circumstances not present here, the notice of deficiency is h; t valid . Campbell v ., Commissioner , . 90 T .C . 110, 112, 115 ;(198'8) ; Montgomery v . Commissioner , 65 .T .C .511, 522 (197,5) ; Whittingto n v . Commissioner , T .C . Memo . 199.9-279 . Preliminary notices and IG- administrative-meetings may be courteous-and ..-may allow taxpayers Ir . . - 7 .to resolve„ earlygmisconceptions by the . Commissioner, but . sectio n : :6212 : (a)t (setting forth the requirements for is"suing .'a° notice o f deficiency-) or . any other., section 'does not' . -requ re them . In petitioner',s<case, the 10-page,notice of deficiency ,indicates clearly' that „respondent made,, .-a . determination for . a - , particular- year, 2005, . in : a particular. amount, ;, '$11, .575 :, after examining the particular items of petitioner's2005"Federal income tax return . Accordingly, : we (cid:127)find,-that respondent's notic e of . deficiency is valid .'. B . Detrimental'Rel,anc e .Petitioner's second . complaint against . .respondent' s procedures 'begins with a September 18,- 200'7 . ; telephone . 'conversation-that-Mrs .. Ekanem arid- .petitioner had-'with Richard Theodore, the IRS representative -whose name the notice of ' deficiency, dated July-31-,-2007, . . lists -as . the proper . person to contact at the ° IRS . #.-According to' :peti"tioner, .-during the telephone conversation, Mr . .'. Theodore told£.Mr .° 'Ekanem :and petitioner (cid:127)-that the 'IRS was "all- set' with respect . to !th e adjustments . Petitioner interpreted this comment as .having convinced'Mr ."Theodore that the Commissioner's determination was in error and' .petitioner;'s .2005 return . was correct as .filed . The Court received into evidence"a copy of .the-notice of deficiency with a note ' petitioner wrote on the front page asking Mr . Theodore to "please ' close : this audit" 'per the September 18,, 2007, . r. - 8 telephone conversation . Petitioner therefore felt misled .when o n October 23, 200 7.., . he called Mr . .,Theodore and discovered that4, .he still owed the,$1,575 ., Petitioner-then had to scramble to,'.fil e his':petition quickly before the 90-day. .per.zod expired 6 day s iP later, leaving petitioner wondering whether Mr :° .. Theodore ..and. .the IRS had intentionally tr-ied'to trick him into missing th e ,I! deadline for filing a petition with the Tax Court . °., . .Respondent cl'aimsjthat after-the notice-of deficiency wa s issued, the Appeals Office sent several : letters to petitioner, but petitioner did not! respond . Pet-itionercounters~ that but for Mr . Theodore's false-representation, petitioner would have had his accountant available to provide copies of his records to. -respondent . Instead, by'the .time petitioner called Mr .- Ekanem for additional(cid:127)assistance, an,individual in the office informed petitioner that, Mr . Ekanem was unavailable because he .was,in . A. .1 1 Nigeria .' Petitioner Had given all of his taxrecords to Mr ... . Ekanem during the tax preparation session .in<early 2006 . Petitioner acknowledged that Mr . Ekanem returned the :originals, but petitioner lost th'm . Unfortunately forlipetitioner, even if,Mr .,Theodore made such a statement, the Commissioner,is :empowered .to retroactively , 'We take judicial notice that on Jan . 23, 2008, a Lexington, Mass ., resident named Eddy Ekanem pleaded guilty to one count of embezzlement and four counts of larceny related to insuranc e fraud, receiving a sentence of'2-1/2 years in the House of '' . Corrections . correct mistakes of law, even where a taxpayer has-,relied to his detriment on the Commissioner's mistake . Dixon v . United States, 381 U .S . 68, 72-7.3 (1965) ; Montgomery v . Commissioner , supra at 522' (the recommendation of-an IRS agent for a ' .no change" audi t ' is-not binding . on the Commissioner for purposes of litigation) ; Hodel v .Commissioner , T .C . .Memo . 1996-348 (an IRS .. agent does not have the authority to bind the Commissioner, even if the„taxpayer has detrimentally relied on the erroneous advice of,an agent) . III . Respondent's Disallowances A . Deductions in General - , Deductions are a matter of legislative grace, . and taxpayer s must satisfy the statutory requirements for claiming the =deductions . INDOPCO, Inc . v . Commissioner, . 503 U .S . 79,-8 4 (1992) ; New Colonial Ice Co . v ._Helvering , 292 U .S . 435, 44 0 (1934)' . Section 6001 requires taxpayers to maintain records sufficient to establish the amount of-each deduction . See also Ronnen v .7Commissioner ,- 90 T .C . 74, 102 (1988) ; sec .- 1 .6 .001-1(a) , '(e), Income Tax Regs . If ..a-taxpayer can establish that he onc e possessed adequate . records, .but lost the'records .on account . of circumstances beyond his .control, such as a . fire or flood or other casualty, then the=Court will permit the-taxpayer to reasonably reconstruct his expenses . Gizzi v . Commissioner , 65 T .C . 342, 345 -(1'975) .- 10 - Taxpayers may'dedufct ordinary and necessary expenses-tha t they pay_;.in' -connection P with operating a'trade or business . Sec . 162 (a) Boyd v . Commissioner ; 122 T .C . 305,, X313 (2004),.' . To be ordinary the expense must be (cid:127)of a : common or frequent, occurrenc e in the type of business involved . Deputy v . du Pont , 308 U .S . 488,- :4.95-,(1940) .: 'To bd' necessary an expense .;, must be (cid:127) appropriate and helpful to, the, taxpayer' s business' .' 'Welch 'v . Helverina ;y°, 290 U .,S . at 113 . Additionally the expenditure must be''"directly; connected with or pertaining to the taxpayer's(cid:127)trade or business" . Sec . 1 .162'1(a), Income' Tax Regs :":,Section 262(a) disallows deductions for personal, liveng, or familY expense s If a taxpayer establishes that 'an 'expense is deductible but is unable to substantiate . the precise. amount,_'we .may .estimate .the amount, bearing heavily;;- againstthe taxpayer whose inexactitud e is of his own making . Cohan v . Commissioner , 39 .F .2d 540,, :543- 544 (2d Cir . 1930)'(hereinafter the Cohan rule or simply . Cohan ) . Thei taxpayer must present sufficieht . :evidence .for the Court to form ;an' estimate, because without such" a foundation, 'any . allowance would amount to'unguided largesse .' Vanicek v . Commissioner , 85 T .C . 731,=742-743-.'(1985) . Congress enacted,,-legislation negat°ing'the"judicial' doctrine of Cohan with regard to certain, .but not all, expenses . . Sec . ; 1.I 274(d) ; sec . 1 .274-5T(a), Temporary Income Tax Regs ., .50=Fed ., Reg . 46014 (Nov . 6, 1985) . Expenses associated with travel, -, l1 meals ,(cid:127) and certain listed property ° defined - in section 280F ( d)(4) , including passenger . automobiles, computers, -and cellular telephones, are ally .now subject .to 'a heightened level. of substantiation ,- .requiring 'taxpayers . to":corroborate their statements with adequate ; records or sufficient -other evidence establishing . the .amount , time, place, and,business . purpose of the . expense . .',,. Sec, .: 274 .(d) : .' Thu's,, for ,these categor .ies_'of, expenses, -even if an estimate would otherwise-be allowable under Cohan , th e Code prohibits a'deduct'ion unless the . taxpayer has-:,sufficien t substantiation ., See sec . . .:1 .9274-5T : (a) , Temporar y Income Ta x supra . .With respect to'cos t ~f goods sold, Purchases' are not , dedu tible but are . instead an, o off set, to'Fgross 'receipts- in : determining gross ' income ;n Metra' Chem -Corp . -v .. -Commissioner , .88 T .C . 654 ( .19a7) ;a Nurin v'.' Commissioner ',' T% C : Memo . 2002-250 ; . 5 Wright v . Commissioner , T. .,C . Memo .c. '. 1993 - 27 ; sec . 1 . 61-3 (a)Y, Income ' Tax .:Begs , Thus , the . Code' does ' not .treat cost of goods sold as a deduction from gross income', and it is' not-subject t o the limitations yon deductions . in sections 162'and 274 " :See Metra . Chem Corp . v . :Commi'ssioner ; " 'supra ; B .C .- Cook & Sons ;" Inc .' v . Commissioner , 65 T .C . 422, ''428 (1975) , affd . per curiam 584 F .2d 53 (5th .Cir . =1978) ; Nunn -v . Commissioner ;= 'supra ; .,sec s 1 .61-3(a) ; 1 . .162-1(a), : 1 .47.1-3, Income'Tax Regs .' Nonetheless, taxpayers mustsubstantiate the amount they report as cost of' - 12 - goods sold, and they must maintain sufficient records for this x purpose . Sec . 6001 ; Nunn v ., Commissioner , supra ; Wright°>v . _ Commissioner , supra ;°sec .~ .1 .6001-1(a)_, Income Tax Regs . Keeping in mind tkese,well-established principles, we no w apply . the law to petitioner's specific facts to" decide whether- respondent's determinations .are correct for,2005 . B . Schedule C--Translation and Interpretation Services 1 . Cost of Goods-Sol d .Petitioner-reported $2,004 . in cost of goods sold, . ,and, " respondent disallowed the entire amount . Petitioner is unsure what items .Mr . Ekanem included in cost of goods sold, . Petitioner testified that the items wereprobably .(cid:127)goods "which would help me as an : interpreter, . may5e clothes, maybe some items which :[were ] ,helpful to me to go .,up there and interpret :." Petitioner, acknowledged that he bought,1suits for-his interpretin g assignments-and that M . Ekanem probably,°incl(cid:127)uded the, costs"of the suits in cost of goods=sold . Petitioner stated that th e Ali . suits he bought, in 200 .for -interpreting ,were different 'fro m -suits he would wear. for other purposes such as going out to,a'° formal dinner, but he did not specify how-the'suits wer e different . Taxpayers may -deduct expenses for articles of clothing' .under x section 162 (a), only :if'the,, clothing is required 'in . the taxpayer's employment, is not suitable forgeneral or personal wear ,, and,i's, not . worn for ° general .r or personal-'purposes . Yeomans v . Commissioner ', 30 T .C «-757 :, 767- 768 (1958 ) We f'i'nd the suits petitioner purchased i n 200 '5 'to serve as an ' interpreter ar e suitable, for general' wear .-: Therefore, petitioner is' . not, entitle d to claim a°s a cost of . goods "sold or .otherwise . deduct amounts he paid 'for . clothing in 2005° tb -serve .as an interpreter . "With respect to any other :items petitioner included in cost--of .goods sold for 2005, petitionerµunfortunat"ely- provided no information . We therefore sustain responden'ts full disallowance o f petitioner's cost of goods 'sold . J Car and Truck' Expense s Petitioner claimed $3,500 and respondent allbwed$l-,620 in "'deductions' for car and truck . expenses : for ,2005 . Petitioner, ' -,claimed he owned two- automobiles, in 2005 : '- A' largep Chevrole t Suburban for :personal use and for :commuting to- .and-from his . :as .a- corrections officer ;- and a' smaller, gas .-efficient Dodge Neo n he .bought in 2005 for $4 ;800 that he" used' exclusivelyfor-driving to ; and"' from his interpreting 'assignments . Petitioner claims he maintained a-F contemporaneous~'log detailing the trips he made fo r .interpreting and that he'presented"< .thelog to Mr Ekane m calculate "the' .: proper deduction- . But',a's noted, petitioner was unable to find the .."original log and Mr .- Ekanerr -was unavailable at trial to produce a- cbpy(cid:127) or . to explaih'I the deduction' . 14 - . Petitioner did not establish-that he lost 'the originalon account_of .circumstance.s-beyond his control . Even if. thiswere the case, petitioner has not -,. satisfied the second requirement of reasonably reconstructing or even attempting to reconstruct-his' expenses . See Gizzi, vJ, Commissioner , 65 T .C . at 346 . Moreover, sectionbb274 .(d) requires stringent substantiation requirements-for certa .n expenses, including expenses related to passenger automobiles as listed property . under . sectio n 280F(d) (4) (A) (i) ; Respondent already allowed a deduction°° fo r 2005 of $1,620, which was apparently, an allowance of 4,00 0 business miles times tYe 2005 standard mileage rate of 40 .5 cent s per mile . See ..,Rev . Proc . 2004-64, sec . 5 .01, 2004-2 C .B . 898, 900 .(setting the standard mileage rate for 2005 at 40 .5 ...cents per mile) . We also,note that in Part V, Other Expenses,~of Schedule C, Mr . Eka.men,on petitioner's behalf separately deducted $1,40 0 as a gasoline expense which respondent did .not challenge . Th e .standard mileage rate includes an allowance fo r as .for depreciation or' lease payments, . maintenance and rep-airs, and registration fees . Id . sec . 5 .03, ;;, 2004-2 C .B . at-900 .(cid:127) Consequently,, petitioner has provided no evidence to support a larger deduction than the one or one s , . respondent has .already,allowed . . We sustain respondent's partia l disallowance of petitioner's . car and truck expenses . -Insuranc e .-Petitioner deducted $2 ., 100 . asaninsurance expense for'.2005 , and respondent disallowed,-th e entire- amount .',,Petitione r estimated : that the,$2, 100, he paid-about-$5'00 or $ .600, fo r homeowner's :Yinsurance,' and, the ;rema ning $i500 .to -$l, 600 was fo r automobile .insurance"on the,Dodge Neon thatzhe ..drove exclusivel y .for his interpreting,assignments For, the . 'rest of thi s ,;discussion, we will assume petitioner .<spent °$500'' .on homeowner's insurance, and . the remaining ..$,1, 600 on automobile insurance for. As-noted above,-=the standard mileage rate'already~include s an allowance .for insurance . Rev . Proc 2004 .-.64,sec . 5 .03 . Moreover ;' passenger automobiles are -included-as :listed property ,Undersection 280F (d) .(4) ,((cid:127)A) E(i )-, and= related . . expenses are ' therefore subject to the stringent substantiation"requirements of section 274(d) Petitioner,provided no records, no cancele d s checks from, his bank, and not' even copies--of bills or policy' :' statements from hisinsurancen :cornpany,to. .s.ubstantiate that-he paid $1,600 in .automobile"(cid:127)' :i.nsurance in 2005 or that-the paymen t was 'solely . for- .the .Dodge Neon .,,,Petitioner"also did not'present a reconstructed record ' toreplace hi's lost . l'og,es.tablishing-his 200S .-business use percentage .for the Dodge :Neon . . -„' (cid:127) For all of these reasons, we sustain respondent's ful l disallowance of petitioner's : automobile insurance expense . b ., Homd'owner's Insuranc e Regarding the homeowner 's'insurance, taxpayers may deduc t expenses related to a portion of their home that they us e -regularly and exclusively as thefF'prihcipal place of any trade o r business. Sec . 280A (c) (cid:127) Tobin v. Commissioner, T .C . tMemo . 1999-328 . The' .record contains no indication that Words provide d petitioner with office lspace ., Even if Words didt.provide space , we doubt petitioner could have conveniently accessed his mess"ages,, and conducted his business there . Peti :tioner's uncontroverted testimony is that he dedicated part ofhis home regularly and exclusively to . coordinating his interpreting activities . . . Petitioner estimated the space as 300- .or 400-square feet'ofhis , 2,400 - square -foot home.;, In'.this space petitioher maintained(cid:127) a computer., a desk, a fax machine, , and a printer 'to receiv e telephone-calls .and faxes from- .hospitals, immigration offices ; and courts . Petitioner checked his messages regularly ' before- an d after. his job as a corrections officer . 9 Respondent did .:not challenge this . aspect . of petitioner . testimony . We find pe4itioner's'testimony regarding . the business use,of ;his home credible . However, petitioner's estimate of'°a 300- or 400-square-foot area seems~excessive-for .such a limited activity (only 37 .5 paid hours for all of 2005) . Therefore, . . - 17 - without additional information, applying Cohan , and bearing; heavily against.- petitioner, we find it likely that petitioner dedicated no more than a small area,_perhaps 100 square feet out of the 2,400-square-foot home, or 4 .17 .percent,,,for business use . ;Ordinarily, .at this juncture we would find that petitioner is entitled to a $21 ($5 100 x 4 .17 percent) deduction . on . Schedul e C for a homeowner's insurance expense for 2005 . However, section 280A(c)(5) provides two . additional considerations . :; First, section . 280A (c) (5) limits -a taxpayer's deductions for-busines s use of a home to the amount by which the activity's gross income from the taxpayer's business use of .the residence . exceeds the sum of deductions which are allowable regardless of whether the taxpayer used, the residence for business, : such as,mor.tgage interest and property taxes, plus deductions for expenses of the business which are not allocable to the business use of the residence . See Tobin v . Commissioner , . supra In other words, a ,taxpayer may not claim a deduction : that would give rise to., ; or increase a . net loss from, the business to which the, deduction relates . Visin V . Commissioner , T .C . Memo 2003-246 . Additionally, section 280A,(c)(5) provides that the taxpayer may carry forward any . resulting{ disallowed deductions .to the next year . See sec . 280A (c) (5) ; (flush language) . On-Schedule C for 2005, petitioner reported a loss of $10,754 before-respondent's adjustments . Accordingly, the amount of the $21 eligible homeowner's insurance expense that petitioner may deduct in 2005 or must carry forward to 2006 will be'computed under R6le'15'5 . -18 C . Itemized Deduction s 1 . Charitable Contributions , Petitioner deducted $3,175-in charitable contributions on Schedule A, Itemized;Deductions, for 2005 . Respondent disallowed . .the entire amount as'n©t being made to a qualifying organization . Petitioner acknowledges that part of the $3,175 total includes donations he sent to Ethiopia to help 'charitable- causes there-, and he concedes that tFaese overseas organizations are no t ii qualified section 501(c)(3) charities within the meanin g section- .170(c) . Howevr, petitioner' also claims that he belongs to, attended, and tithed his income .-to the Ethiopian Orthodox Church -in the United States, not the' Ethiopian Methodist Churc h which Mr . Ekamen'mistakenly keyed onto Schedule A . )Petitioner states! that he attended an Ethiopian Orthodo x Church about once a . month in the Washington,, D .C ., area wher e most-of his family resides and that he also attended an Ethiopian Orthodox Churchin Boston,when .his .schedule permitted . Petitioner claims he donated clothes to families in need in=th e Boston area and that he put about $100 cash in the church's-box each time he attended-a church in Washington or Boston . II, Petitioner acknowledge he did not ask for receipts, but he has offered to provide respondentawith .the telephone number=and contact,. . information for the church in Washington, D .C . Taxpayers .-may generally deduct'a charitable :(iontributio n only if they substantiate . the deduction in a' manner verifiabl e according to "regulat(cid:127)ions prescribed by the Secretary ." Sec .. ,1:7.0 (a)-+l), . For each 'charitable -contribution of money less' than $250 made before 2006-the'-pertinent regulation-requires that the -taxpayer substantiate the contribution with a . canceled check, a receipt, or ,other ~reliableevidence showing the name of th e donee, the date of the .contribution,"and the amount'-of the contribution . Alami =El-Moujahid v . Commissioner, , T .C ,Memo' :. (cid:127) : .2009-42 ; sec :. 1 :1:70A-13(a) ( 1 )", Income, Tax-IRegs' . Contributions o f cash or, property .of over' $250- . require the donor -to obtain the donee's contemporaneous written acknowledgment" .:of'the donation . Sec . 1=70 (f) (8) Alami El = Moujahid v . Commission-er ', supra '. The Court has not - decided definitively whether Cohan is" available to estimate charitabley .contributions, . . See Kendrix v . Commissioner ,- T ."C(cid:127) . 'Memo': 2006-9 " .('finding that theCourt has not yet squarely- addressed-'the : inherent conflict' between section 170 (a) (1) and' the 'application of Cohari to unverified or inadequately substantiated charitable contributions) . However, precedents existto'allow .a Cohan estimate for charitable . contributi-ons, especiall'y where we ;find the : -taxpayer was candid , forthright, and . credible Stockwell v .-Commissioner , T .C:Memo . 2007-149 (stating . uncorditionallyythat "We may estimate cash charitable contributions under the Cohan rule".) ; Hooks v . Commissioner , T .C . Memo . 1993-437 ; Wren v . Commissioner , T .C . Memo . 1984-456 . Petitioner provided no substantiation of-his charitable . contributions . -However, respondent's blanket . disallowance . goe s too far . Petitioner is an industrious individual working tw o jobs while attending school . His,religious commitment appears genuine . In summary for charitable contributions, using our bes t judgment on the entire record before us, and under Cohan bearin g heavily against, petitioner's own, inexactitude, we find it credible that at"least once a month throughout 2005 petitioner attended and made a cash contribution of~at least $25 to a qualified-Ethiopian Orthodox"Church in Washington, D .C ., or in, Boston . Accordingly, p etitioneris entitled to an itemized deduction of $300 for chari-table contributions in 2005 . 2 . Gambling Losse s Petitioner deducted $55,032 in gambling Losses as an itemized deduction, and respondent limited the deduction to $3,180, the amount of,petitioner's1reported gambling winnings . Losses fro m ,wagering transactions are limited to the gains from the transactions . Sec . 165(d) ; Merkin v . . Commissioner:, T .C . Memo . 2008-146 ; sec .. 1 .165-10,,Income Tax Regs . Petitioner has provided no justification to disregard this rule, and we,find,- I! none . Therefore ; we sustain respondent's partial disallowance of - 21 - petitioner's gambling losses . To reflect our disposition of the issues , Decision will be entered under Rule 155 .