TAX COURT OPINION

Case: Robert C. Kelnhofer, III & Teresa D. Moss Kelnhofer
Docket Number: 20921-13S
Judge: Goeke
Opinion Type: bench
Filed: 05/18/2015
Pages: 6

UNITED STATES TAX COURT WASHINGTON, DC 20217 RICHARD B. SLATER & LISA SLATER, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 8469-14S. ) ) ) ) ORDER 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 above case before Judge Joseph Robert Goeke at San Francisco, California, on May 1, 2015, containing his oral findings of fact and opinion rendered at the trial session at which this case was heard. In accordance with the oral findings of fact and opinion, a decision will be entered under Rule 155, Tax Court Rules of Practice and Procedure. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. May 18, 2015 SE4WED MAY 2 0 2015 Capital Reporting Company 3 1 2 Bench Opinion by Judge Joseph Robert Goeke May 1, 2015 3 Richard B. Slater & Lisa Slater v. Commissioner 4 5 Docket No. 8469-14S THE COURT: The Court has decided to render 6 Oral Findings of Fact and Opinion in this case, and 7 8 the following represents the Court' s Oral Findings of Fact and Opinion. The Oral Findings of Fact and 9 Opinion shall not be relied upon as precedent in any 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 other case. This case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code in effect when the petition was filed. Pursuant to section 7463(b), the decision to be entered is not reviewable by any other Court. The present case is before us based upon our jurisdiction to review deficiency determinations made by the Respondent in Notices Of Deficiency which are timely petitioned by the Petitioners. Respondent issued a Notice of Deficiency to the Petitioners for 2011, determining a deficiency in the amount of $11,232 in income tax and the addition to tax under section 6662(a) in the amount of $2,246. Section 6662(a) is in the Internal Revenue Code, and section references hereinafter are to the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 Internal Revenue Code. At the time the petition was filed in this case, the Petitioners were residents of California. This case is based upon Respondent' s disallowance of certain credits and deductions claimed on Schedule A. The credits relate to educational credits, and Respondent has conceded that 8 PetitionerN entitled to $960 regarding these credits. s art 9 (,s-i-e+ . 10 11 12 13 14 15 16 Based upon the testimony at trial and the other evidence offered, Petitioner©sonot substantiated that they are entitled to any additional credits other than those conceded by Respondent at the time of trial. In addition to a Stipulation of Facts, the record at trial consisted of the testimony of 17 Petitioner Richard B. Slater. Mr. Slater was a 18 19 20 21 22 23 24 25 prison guard for the State of California in the year 2011, and was also qualified as a sniper and with respect to various other weapons qualifications as part of his job in 2011. First we note that the employee business expenses claimed on Petitioners' joint return for 2011 include an unreimbursed expense statement which does not reconcile with the actual total amount 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 claimed on Schedule A of Petitioners' return, and, in fact, is less than the amount claimed. After carefully reviewing Petitioner's testimony at trial, we determined that only the following amounts would be allowable as unreimbursed employee business expenses, based upon the substantiation and testimony provided: Weapons expense, in the amount of $2,290. Weapon, handgun, in the amount of $1,119. Ammunition, in the amount of $400. Range fees, in the amount of $100. Screen Actors Guild dues, in the amount of Publication expense, in the amount of $175. Union and professional dues, in the amount $196. of $1,260. In all other respects, the unreimbursed employee expenses claimed on Petitioners' 2011 federal income tax return are disallowed. We next address the question of whether 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Petitioners are subject to the addition to tax in 22 23 24 25 2011. In that regard, we note that Petitioners did have a paid return preparer. However, Petitioners bear some responsibility for determining whether the actual income tax return they signed and submitted 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 was accurate. It appears that they did not even provide a cursory review of the return, which would have demonstrated that the schedules supporting the unreimbursed employee business expenses was less than the amount that they actually claimed on the Schedule A. In addition, Petitioners well knew that they did not participate in any education activities in 2011 themselves, and yet they claimed education credit relative to their personal activities, which was incorrect, by the admission of Petitioner husband in his testimony at trial. Finally, many of the expenses claimed were not reasonable and the amounts were not in accord 16 with substantiated materials submitted at trial. 17 18 19 20 21 22 23 24 25 Given these circumstances, we believe that the addition to tax under section 6662 should be applicable to any deficiency determined based upon our analysis of what expenses were properly allowed, and Respondent's concession of certain education credit. A Rule 155 computation under the Tax Court Rules of Practice & Procedure will be required to determine the actual deficiency in federal income tax 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 for the year in question. This concludes the Court's Oral Findings of Fact and Opinion in this case. (Whereupon, at 10:55 a.m., in the above- entitled matter was concluded.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com