TAX COURT OPINION

Case: John Jones & Marga Jones
Docket Number: 8082-12S
Judge: Guy
Opinion Type: bench
Filed: 07/02/2013
Pages: 7

RMM UNITED STATES TAX COURT WASHINGTON, DC 20217 JOHN JONES & MARGA JONES, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 8082-12S. ) ) ) ) OR D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is 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 in the abovecaptioned case before Special Trial Judge Daniel A. Guy, Jr., at Tampa, Florida, on June 13, 2013, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Daniel A. Guy, Jr. Special Trial Judge Dated: Washington, D.C. July 2, 2013 SERVED Jul 02 2013 Capital Reporting Company Bench Opinion by Special Trial Judge Daniel Guy, Jr. 3 June 13, 2013 John & Marga Jones v. Commissioner Docket No. 8082-12S THE COURT: The Court has decided to render oral findings of fact and opinion in this case, and .the following represents the Court's oral findings of fact and opinion. The oral findings of fact and opinion shall not be relied upon as precedent in any other case. This proceeding for the redetermination of a deficiency is a small tax case conducted pursuant to the provisions of s.ection 7463 of the Internal Revenue Code of 1986, as amended, and Rules 170 through 174 of the Tax Court Rules of Practice and procedure. This bench opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code of 1986, as amended, and Rule 152 of the Tax Court Rules of Practice and Procedure. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Hereinafter in this bench opinion, section references 22 23 24 25 are to.the Internal Revenue Code of 1986, as amended, in effect for 2010, and Rule references are to the Tax Court Rules of Practice and Procedure. Petitioners resided in Florida at the time 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 2 3 4 5 6 7 8 9 10 11 12 13 the petition was filed and they appeared at trial pro se. Jeremy D. Cameron appeared on behalf of respondent. The issue for decision is whether petitioners are entitled to a deduction originally reported as an unreimbursed employee business expense (now treated as a medical expense) on Schedule A, Itemized Deductions, for ,the taxable year 2010. The parties filed with the Court a stipulation of facts with accompanying exhibits that are·incorporated herein by this reference. Mr. Jones is a military veteran and is receiving treatment on la regular basis at a Veteran's 14 Administration (VA) medical facility in Florida. Mr. 15 Jones is experiencing vision impairment, has 16 difficulty standing and walking, and uses a cane and 17 18 19 20 21 a wheelchair to aid in his mobility. On October 29, 2010, petitioners purchased a previously-owned 2004 Cadillac SRX (Cadillac). The purchase price of the Cadil·lac was approximately $16,000. Petitioners financed the purchase of the 22 Cadillac over a period of six years and they received 23 24 25 a Federal truth-in-lending disclosure statement indicating that the total cost of the vehicle to petitioners over time would be approximately $26,000. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company . 1 2 3 4 Petitioners filed a joint Federal income tax return for 2010 . On Schedule A petitioners reported medical expenses of $2,883 (before 7.5% limitation prescribed in section 213) and a 5 miscellaneous deduction of $16,625. The latter 6 7 8 9 amount consists of the purchase price of the Cadillac and ·related charges. Respondent examined petitioners' return and issued a. notice of deficiency to them disallowing the 10 miscellaneous deduction of $16,625 described above. 11 Petitioners filed a timely petition for 12 13 14 15 16 17 18 19 20 21 22 redetermination with the Court pursuant to section 6213 (a) . Mr. Jones testified that he traded in a four-door sedan for the Cadillac because the rear hatch on the Cadillac made it safer and easier to transport his wheelchair. Mr. Jones also testified that Mrs. Jones has taken on the role of his full- time caretaker and petitioners consider the Cadillac a medical necessity because of his frequent medical appointments. The parties stipulated that petitioners did not make any modifications to the 23 Cadillac. 24 25 We begin with the fundamental principle of Federal tax litigation that the Commissioner's 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 7 8 determinations normally are presumed correct. See INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering, 290 U.S. 111, 115 (1933). In conjunction with this principle, tax deductions are a matter of legislative grace, and the taxpayer bears the burden of proving that he or she is entitled to any deduction claimed. Rule 142(a); Deputy v. duPont, 308 U.S. 488, 49.3 (1940); New 9 Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (1934). ~ Section 213(a) allows for the deduction of amounts paid and "not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent *** to the extent that such expenses exceed 7.5 percent of adjusted gross income.·" We have characterized section 213 as carving out "a. limited exception" to the general·rule in section 262 that prohibits the deduction of personal, -living, or family expenses. Jacobs v. Commissioner, 62 T.C. 813, 818 (1974). The term "medical care" includes amounts paid "for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body".. Sec. 213(d) (1) (A). The regulations provide that 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 .1 . "Deductions for expenditures for medical care 2 3 4 5 6 7 8 9 allowable under section 213 will be confined strictly to expenses incurred primarily for the prevention or alleviation of a physical or mental defect or illness." Sec. 1.213-1(e) (1) (ii), Income Tax Regs. While the Court sympathizes.with Mr. Jones, the record does not establish that the Cadillac provided any therapeutic effect for his physical condition or that the vehicle was acquired primarily 10 for the prevention or alleviation of a physical or 11 mental defect. or illness. The parties agree that the 12 13 14 vehicle was not modified in any way and it is not enough to show that the Cadillac was more comfortable or provided a more convenient means o.f transporting 15 Mr. Jones or his medical equipment. See Mertie v. 16 Commissioner, T.C. Memo. 1982-687. Although the 17 Cadillac may have been used to transport Mr. Jones to 18 medical appointments, the record simply does not 19 20 21 22 23 establish that this. was the primary purpose for the purchase of the vehicle. In addition, it is clear that the Cadillac was also routinely used for petitioners' personal transportation. See Volwiler v. Commissioner, 57 T.C. 367, 370-371 (1971). 24 Considering all the facts and circumstances, we 25 conclude that petitioners have failed to show that 866.488.DEPO www.CapitalReportingCompany.com 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 ( Capital Reporting Company 8 the Cadillac was acquired primarily for medical purposes and hence the cost of the vehicle does not qualify as a medical expense under the provisions of section 213. Consistent with the foregoing, respondent's determination disallowing the deduction in dispute is sustained. Decision will be entered for respondent. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 11:40 a.m., the above- entitled matter was concluded.) 866.488.DEPO www.CapitalReportingCompany.com