TAX COURT OPINION

Case: Vilma Hernandez & Rene A. Hernandez
Docket Number: 3373-20S
Judge: Carluzzo
Opinion Type: bench
Filed: 04/15/2021
Pages: 5

United States Tax Court Washington, DC 20217 Docket No. 3373-20S. ) ) ) ) ) ) ) ) ) ) ) VILMA HERNANDEZ & RENE A. HERNANDEZ, Petitioners v. Commissioner of Internal Revenue, Respondent O R 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 the parties a copy of the pages of the transcript of the trial in this case before Chief Special Trial Judge Lewis R. Carluzzo at Los Angeles, California, containing his oral finds 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) Lewis R. Carluzzo Chief Special Trial Judge Served 04/15/21 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 Bench Opinion by Judge Lewis R. Carluzzo March 12, 2021 3 Vilma Hernandez & Rene A. Hernandez v. Commissioner Docket No. 3373-20S 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 (bench opinion). Section references made in this bench opinion are to the Internal Revenue Code of 1986, as amended, in effect for the relevant period, and Rule references are to the Tax Court Rules of Practice and Procedure. This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. This proceeding for the redetermination of a deficiency is a small tax case subject to the provisions of section 7463 and Rules 170 through 174. Except as provided in Rule 152(c), this bench opinion shall not be cited as authority, and pursuant to section 7463(b) the decision entered in this case shall not be treated as precedent for any other case. Vilma Hernandez appeared unrepresented by counsel. Rene Hernandez, who signed the stipulation of facts, did not appear at trial. Catherine A. Sullivan appeared on behalf of respondent. In a notice of deficiency dated November 27, 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 2019 (notice), respondent determined deficiencies in 4 petitioners' 2016 and 2017 Federal income tax. The issues for decision are whether petitioners are entitled to deductions claimed on Schedule A, Itemized Deductions, included with each return in excess of what respondent has already allowed for each year in issue. Some of the facts have been stipulated and are so found. At the time the petition was filed, petitioners lived in California. During the relevant period Mr. Hernandez was employed as a mechanic with the Los Angeles County Metropolitan Transportation Authority and Mrs. Hernandez was employed as a help desk coordinator, also with the Los Angeles County Metropolitan Transportation Authority. Petitioners' timely filed joint 2016 and 2017 Federal income tax returns were prepared by a paid income tax return preparer. Each return includes a Schedule A on which petitioners claimed various deductions, including, as relevant here, home mortgage interest and unreimbursed employee business expenses. Petitioners' Schedule A for 2017 includes a deduction for other expenses. In the notice, respondent disallowed: (1) the majority of each deduction claimed on the Schedule A for home mortgage interest and unreimbursed employee business expenses for each year in issue, and (2) the entire 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 deduction for other expenses claimed on the Schedule A for 5 2017. As we have observed in countless opinions, deductions are a matter of legislative grace, and the taxpayer bears the burden of proving entitlement to any claimed deduction. Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). Mrs. Hernandez, who is unsophisticated in Federal tax matters, relied on her return preparer to accurately prepare petitioners' 2016 and 2017 joint Federal income tax returns. At trial, Mrs. Hernandez agreed that the determinations in the notice are proper. She explained that the overstatement of deductions resulted from her return preparer arbitrarily showing deductions unsupported by actual expenses. She was remorseful that she did not discover her return preparer's errors at the time she signed the return and suggested that return preparers should in some manner or other be regulated. Many of us who repeatedly see the ultimate consequences of unscrupulous return prepares might very well agree with her suggestion. Be that as it may, it is clear that petitioners are not entitled to the deductions disallowed by respondent. To reflect the foregoing, decision will be entered for respondent. This concludes the Court's bench 6 opinion in this case. (Whereupon, at 8:30 a.m., 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