TAX COURT OPINION

Case: James Boneparte, Jr.
Docket Number: 9404-08
Judge: Colvin
Opinion Type: bench
Filed: 03/16/2009
Pages: 10

UNITED STATES TAX COUR T WASHINGTON , DC 2021 7 JAMES BONEPARTE, JR ., Petitione r v . ) Docket No . 9404-08 . 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 a copy of the pages of the transcript of the trial in the above case before Judge Joseph H . Gale at New York, New York, .on January 28, 2009, containing his oral findings of fact and opinion rendered at the conclusion of trial . Decision will be entered for respondent in accordance with the oral findings of fact and opinion . (Signed ) Joseph H . Gale Judge Dated : Washington, D .C . March 16, 2009 SERVED Mar 17 2009 Bench opinion by Judge Joseph H . Gale 3 1/28/0 9 James Boneparte, Jr . Docket No : 9404-0 8 THE COURT : This bench opinion is mad e 1 2 3 4 pursuant to the authority granted by Section 7459(b) 5 of the Internal Revenue Code, 1986, as amended, and 6 Rule 152 of the Tax Court Rules of Practice an d 7 Procedure . 8 Hereinafter, in this bench opinion, al l 9 section references are to the Internal Revenue Code of 10 1986 in effect for the taxable year at issue, and all 11 rule references refer to the Tax Court Rules o f 12 Practice and Procedure . 13 Petitioner appeared on his own behalf . 14 Robert W . Mopsick appeared on behalf of Respondent . 15 Respondent determined a deficiency of $4,705 16 with respect to Petitioner's 2006 Federal Income Tax . 17 The sole issue for decision is whether Petitioner is 18 entitled to a charitable contribution deduction under 19 Section 170 of $30,200 for 2006, as claimed on hi s 20 return . 21 Some of the facts have been stipulated, and 22 they are incorporated by this reference . Petitioner 23 employed a mailing address in New Jersey when he filed 24 the petition . 25 Petitioner timely filed his Federal Income Heritage Reporting Corporatio n (202) 628-4888 4 1 Tax return for 2006, reporting gross income o f 2 $83,983, and claiming a-deduction of $30,200 fo r 3 charitable contributions . Respondent examined th e 4 Petitioner ' s return, disallowed the claimed charitable 5 contribution deduction , and issued a Notice o f 6 Deficiency in the amount previously noted . 7 Petitioner timely petitioned this Court for 8 a redetermination of the deficiency . 9 The Commissioner's determinations in the 10 Notice of Deficiency are presumed correct . The 11 Petitioner has the burden of proving error in the 12 determinations . Rule 142 ; Welch v . Helvering , 13 290 U .S . 111 ( 1993) . 14 Petitioner has not claimed or show n 15 eligibility for a shift in the burden of proof under 16 Section 7491 ( a) . He has not, in any event, introduced 17 credible evidence that , standing alone, would be a 18 sufficient basis for a decision in his favor . see 19 Higbee v . Commissioner , 116 T .C . 438, 442 (2001) . 20 As discussed more fully below, Petitioner's 21 testimony was vague and unpersuasive in the context of 22 the amounts claimed, and his documentary evidence does 23 not show any nexus with religious activity . 24 Consequently , the burden of proof does not shift to 25 Respondent pursuant to Section 7491(a) . Heritage Reporting Corporation (202) 628-4888 5 1 Pursuant to Sections 170(a) and (c), a 2 deduction is allowed for any charitable contribution 3 made during the taxable year 1~ \ to or for the use of // an 4 entity organized and operated exclusively fo r 5 religious purposes/ If a taxpayer makes a charitable 6 contribution of money, the taxpayer must keep a 7 canceled check, a receipt from the donee organization, 8 or another reliable written record . Sectio n 9 1 .170A-13(a)(1), Income Tax Regulations . 10 Further, any charitable contribution of $250 11 or more must be substantiated with a contemporaneou s 12 written acknowledgment of the contribution by the (,) (8) 13 donee organization . Section 1703 . 14 For purposes of this $250 threshold , 15 separate contributions of less than $250 to a single 16 donee need not be aggregated . see Sectio n 17 1 .170A-13(f), Income Tax Regulations . 18 Petitioner seizes upon the foregoing 19 aggregation rule applicable to contributions of $250 20 or more and contends that he is not legally required 21 to provide any substantiation for contributions that 22 are separately made in amounts less than $250 . 23 Petitioner is mistaken . The law is well settled that . 24 a reliable written record is necessary to substantiate 25 a charitable contribution in cash, regardless o f Heritage Reporting Corporation (202) 628-4888 6 1 amount . 2 Petitioner argues that the IRS publication, 3 "2006 Instructions for Schedules A and B, (Form 1040)," 4 states a rule that says no receipts or othe r 5 documentation is necessary for cash charitabl e 6 contributions of less than $250 . However, the 200 6 7 Instructions Petitioner cites are clear on this point . 8 Under the heading "Contributions You Can Deduct," the 9 instructions state : "Contributions can be in cas h 10 (keep canceled checks, receipts, or other reliable 11 written records showing the name of the organization 12 and the date and amount given), property,, out of or 13 pocket expenses you to do volunteer work . " a td 14 The Instructions thereafter provide a 15 separate section devoted to gifts of $250 or more 16 which contains the aggregation rule on whic h 17 Petitioner relies . We do not believe that th e 18 instructions can be fairly described as confusing or 19 misleading with respect to the requirements fo r 20 contributions of less than $250 . 21 With respect to the written proof that is 22 required to support a claimed charitable contribution 23 deduction, generally speaking written records ar e 24 reliable if theyshowlIthe name of the donee, the date 25 of the contribution, and the amount of contribution . I t Heritage Reporting Corporation (202) 628-4888 7 1 Section 1 .170A-13(a)(1), Income . Tax Regulations . 2 Other factors indicating that written 3 records are reliable include : 4 "\(a) the contemporaneous nature of the 5 writing evidencing the contributionr (cid:127) 6 (b) the regularity of the taxpayer's 7 recordkeeping proceduresa2. (cid:127) 8 (c) in the case of a contribution of a 9 small amount, the existence of any written or other 10 evidence from the donee charitable organizatio n 11 evidencing receipt of a donation . Section 12 1 .170A-13(a)(2), Income Tax Regulations . 13 The written evidence that Petitioner ha s 14 adduced in this case falls far short of the standards 15 outlined in the regulations . Petitioner's evidence, 16 which is contained in exhibits to the parties ' 17 stipulations, consists of : 18 (1) Handwritten summaries of expenditures 19 that Petitioner claims represent direct cas h 20 contributions to his church or churches, backed to 21 some extent by bank records showing cash withdrawals 22 matching the summary ; an d 23 (2) Receipts for car rentals tha t 24 Petitioner contends were undertaken in connection with 25 church activities . Heritage Reporting Corporation (202) 628-4888 8 1 We first consider the documentation of 2 purported cash contributions made directly t o 3 churches . None of these handwritten summaries were 4 prepared contemporaneously . Petitioner conceded at 5 trial that all of the handwritten materials wer e 6 prepared by him after Respondent had commenced an 7 examination of the 2006 return . 8 In some instances, the handwritten summaries 9 can be traced back to 2006 records of a bank account 10 in Petitioner's name, but these bank records merely 11 record, cash withdrawals . They do not establish that 12 the amounts were given to or expended on behalf of any 13 church or other charitable donee . 14 Petitioner has also provided various bank 15 deposit slips to support another claim of charitable 16 expenditures . These documents suffer the same defect 17 as the account records . Nothing on the document s 18 indicates that the funds were expended for a 19 charitable purpose . One deposit slip in evidence 20 records a 2007 transaction . 21 A second set of bank account records covers 22 an account registered in the name of Daisy dos s 23 Enterprises, LLC . There is no reliable evidence in 24 the record showing the connection, if any, between 25 Petitioner and that entity . Heritage Reporting Corporation (202) 628-4888 9 1 Given the size of the claimed charitable 2 contributions for direct cash gifts to churches, we 3 conclude, as fact finder, that it is reasonable to 4 expect that Petitioner could have procured som e 5 documentation from the purported donee churches if 6 such contributions had, in fact, occurred . In any 7 event, there is no evidence that Petitioner eve n 8 attempted this . Because there are no reliable written 9 records of direct cash contributions to any church, we 10 conclude that Petitioner has failed to substantiat e 11 any such contributions . 12 With respect to the contributions tha t 13 Petitioner claims were for travel-related expenditures 14 in connection with church activities, we note firs t 15 that the only expenditures for which there are any 16 third-party receipts are car rentals . The claime d 17 meal, lodging, gas, and toll expenditures are recorded 18 only by means of Petitioner's handwritten summarie s 19 that he concedes were not prepared contemporaneously . 20 There is no contemporaneous record of these trips . 21 The claimed deduction for these expenditures would 22 fail on that basis, alone . 23 However, we note that, to the exten t 24 Petitioner addressed these travel-related expenditures 25 at trial, he explained that some were occasioned by a Heritage Reporting Corporatio n (202) 628-4888 1 0 1 trip to Florida to accompany his goddaughter for her 2 church-sponsored coming of age festivities . Othe r 3 expenses were occasioned by a trip to Las Vegas that 4 Petitioner purportedly took with a minister of hi s 5 church who resided in Florida . The purpose of the 6 trip was religious fellowship or the like . 7 According to Petitioner's handwritte n 8 non-contemporaneous summaries, there were also some 9 expenditures associated with the christening of a 10 house . 11 Petitioner conceded that he was not a 12 deacon, member of the vestry, or otherwise engaged in 13 any management function of the church or churches to 14 which his travel-related donative expenditures were 15 directed . Given these facts, we conclude that th e 16 travel expenditures were non-deductible personal 17 expenditures . See Churukian v . Commissioner , T .C . 18 Memo 1980-205 . 19 Finally, turning to the car rental receipts, 20 we note first that, just as with the bank records , 21 nothing on the face of these documents connects the 22 car rental to a church-related or other charitabl e 23 activity . There are also several objective indicators 24 of the unreliability of these receipts . 25 There are five receipts in evidence . Three Heritage Reporting Corporatio n (202) 628-4888 1 1 1 of them are not, in fact, receipts, but merel y 2 estimates of charges to be incurred, one of which i s 3 for a 2007 rental . Of the remaining two that actually 4 document a cash payment in 2006, one records that the 5 miles driven were 573 . This mileage is inconsisten t 6 with Petitioner's testimony that the car rentals were 7 for round-trips between New York, where the vehicl e 8 was rented, and Florida . 9 For the foregoing reasons, we conclude that 10 there are no reliable written records to substantiate 11 that Petitioner incurred any travel-relate d 12 expenditures to or for the use of any church or other 13 charitable donee . We shall, therefore, sustai n 14 Respondent's disallowance of Petitioner's claimed 15 charitable contribution deduction of $30,200 in its 16 entirety . Consequently, decision will be entered for 17 Respondent . 18 This concludes the Court's oral findings of 19 fact and opinion in this case . 20 (Whereupon, at 3 :00 p .m ., the bench opinion 21 in the above-entitled matter was concluded . ) 2 2 2 3 24 // 25 Heritage Reporting Corporation (202) 628-4888