Decision will be entered under
HALPERN, Judge: By notice of deficiency (notice), respondent determined a deficiency in petitioner's 2008 Federal income tax of $6,724 and an accuracy-related penalty of $1,345. Petitioner assigned error to the notice and claimed a $1,500 overpayment of her 2008 tax.
*192 Unless otherwise indicated, all section references are to the Internal Revenue Code (Code) in effect for 2008, and all Rule references are to the Tax Court Rules of Practice and Procedure. All dollar amounts have been rounded to the nearest dollar.
Some items have been established, and we need not further discuss them. First, we have made absolute our order of October 25, 2011, to show cause under
The issues remaining for decision are whether petitioner *200 (1) is entitled to a charitable contribution deduction of $9,024; (2) is entitled to miscellaneous itemized deductions totaling $6,751; (3) is entitled to a deduction for a dependency exemption for Albert Salako; (4) is entitled to head of household filing status; (5) has made an overpayment of tax; and (6) is liable for the accuracy-related penalty under
*193 Petitioner bears the burden of proof. See
When she filed the petition, petitioner resided in Norwalk, California. During 2008, petitioner was employed as a registered nurse by Los Angeles County-University of Southern California Medical Center.
Petitioner timely filed Form 1040, U.S. Individual Income Tax Return, for 2008, on which she reported a total tax liability *201 of $21,532. On the Form 1040, she elected head of household filing status and claimed a dependency exemption deduction for Mr. Salako, whom she listed as her son. On Schedule A, Itemized Deductions, attached to her return, petitioner claimed, among other deductions, a deduction of $9,024 for charitable contributions by cash or check and deductions totaling $6,751 (before application of the 2% floor) for job expenses and certain miscellaneous deductions.
Respondent issued the notice, in which, among other adjustments, he disallowed petitioner's claimed dependency exemption deduction for Mr. Salako, changed petitioner's filing status from head of household to single, disallowed the *194 charitable contribution deduction, and disallowed the job expense and miscellaneous deductions. He also determined that petitioner was liable for a
On Schedule A, petitioner claimed a deduction of $9,024 for a gift of cash *202 or by check to charity. She testified that during 2008 she made numerous gifts totaling $10,000 to the Church of the Immaculate Conception (Immaculate Conception), a Catholic church in Jos, Nigeria, within the Catholic Archdiocese of Jos.
*195 Petitioner has failed to prove that Immaculate Conception, in Nigeria, was created or organized within the United States or any of its possessions, or under any law of the United States, any State, the District of Columbia, or any possession of the United States. She has, thus, failed to show that Immaculate Conception is a qualified organization with the meaning of
On Schedule A, petitioner claimed a deduction of $6,751 for what she testified were job expenses. In a statement attached to her Form 1040, she described those as expenses as follows: $1,308 in union dues, $1,415 in uniform and dry cleaning expenses, $2,613 in journals, magazines, and books, and $1,415 in stethoscopes.
In general,
Personal, living, or family expenses are not deductible, except as otherwise expressly permitted.
Petitioner claimed a deduction of $1,308 for union dues. We found petitioner credible on that point and will allow the deduction. 3
*197 Uniforms and Dry CleaningPetitioner *205 claimed a deduction of $1,415 for uniforms and dry cleaning. We will allow the deduction to the extent of $717, the extent to which her Bank of America statements show payments to Uniform Advantage and Carlos Uniforms.
Journals, Magazines, and BooksPetitioner claimed a deduction of $2,613 for journals, magazines, and books. Petitioner has submitted credit card statements that indicate that petitioner spent $3,847 at Borders Books and Barnes & Noble, as well as receipts from Goodwill listing numerous "Books" among the items she purchased. Petitioner has not identified the books purchased with any degree of specificity and has not provided any evidence beyond her own testimony that the purchases were necessary job expenses, rather than personal purchases. We sustain respondent's disallowance of the claimed deduction.
StethoscopesPetitioner claimed a deduction of $1,415 for stethoscopes. Petitioner relies on her credit card statements showing three transactions at New East-West Corp. as support of her claimed expense. The credit card statements show only where the transactions occurred and the amounts paid, but not the items purchased. Indeed, the statements show that she spent only $958 *206 at New East-West Corp., *198 and, thus, they do not support her claim on her return that she spent $1,415 for stethoscopes. We have no receipts for stethoscopes and only petitioner's testimony that that is what she spent $958 for at New East-West Corp. We do not find that her testimony and the other evidence persuasively support her claim that she spent either $1,415 or $958, or, indeed, any amount on stethoscopes, and we sustain respondent's disallowance of the deduction.
Dependency Exemption DeductionPetitioner has failed to show that she is entitled to the dependency exemption deduction for Mr. Salako. Petitioner claimed on her 2008 return that Mr. Salako was her son. Mr. Salako was born on January 12, 1961, and was thus 47 years old at the close of 2008. Petitioner, born in 1959, is only two years older than Mr. Salako. Thus, he cannot be her biological son, and we do not find credible petitioner's unsubstantiated testimony that Mr. Salako is her adopted son. Petitioner does not contend, and there is no evidence to find, that she bears any other familial relationship to Mr. Salako.
Nor has petitioner shown that Mr. Salako was a member of her household during 2008. In order for an individual to be considered a member of a taxpayer's household, both the taxpayer and the individual must occupy the household for the entire taxable year.
Moreover, Mr. Salako does not satisfy other requirements to be claimed as a dependent. Mr. Salako, who was 47 years old at the end of 2008, is too old to be petitioner's qualifying child. See
Petitioner has not proven that Mr. Salako was her dependent in 2008. We sustain respondent's disallowance of the dependency exemption deduction.
Filing StatusPetitioner has failed to prove that she overpaid her 2008 Federal income tax.
Section 6662(a) Penalty*202 A substantial understatement of income tax exists for an individual if the amount of the understatement exceeds the greater of 10% of the tax required to be shown on the return or $5,000. See
The determination of whether a taxpayer acted with reasonable cause and in good faith is made on a case-by-case basis, taking into account all pertinent facts and circumstances. * * * Circumstances that may indicate reasonable cause and good faith include an honest misunderstanding of * * * law that is reasonable in light of all of the facts and circumstances, including the experience, knowledge, and education of the taxpayer. * * *
Respondent bears the burden of production with respect to the penalty. See
*203 Respondent has satisfied his burden of production with respect to petitioner's negligence. The record in this case clearly *212 establishes that petitioner failed to report a portion of her taxable income on her return and failed to maintain records adequately to substantiate many of her claimed Schedule A deductions. She improperly claimed as her dependent son an individual who was only two years younger than herself, did not introduce any documentation in support of her position that he was her son or her adopted son, and improperly claimed head of household filing status.
Respondent has also established that petitioner's understatement of income tax for 2008 is substantial. On her return, petitioner reported her total tax liability to be $21,532 for 2008. Respondent determined a deficiency of $6,724 and, even taking into account the $2,025 of disputed deductions we have allowed, petitioner's understatement still exceeds the greater of 10% of the correct tax liability or $5,000. 5*213 Therefore, respondent has satisfied his burden of production with respect to the accuracy-related penalty. To avoid the penalty, petitioner must come forward with evidence that she acted with reasonable cause and in good faith.
*204 Petitioner asserts that she did not understate her income tax because she has substantiated her claimed deductions and thus should not be liable for the penalty. For the reasons discussed supra, petitioner's argument fails.
Petitioner further argues that she should not be liable for the penalty because she hired a tax return preparer for her 2008 return and provided that preparer with "all available documents." Reliance on the advice of a professional tax adviser does not necessarily demonstrate reasonable cause and good faith.
*205 Petitioner has failed to carry her burden of showing that she is entitled to relief under
We sustain respondent's adjustments disallowing petitioner's charitable contribution deduction, a portion of her job expense deductions, and her dependency exemption deduction. We find no overpayment of tax. We sustain respondent's determination that petitioner is not entitled to claim head of household filing status. We sustain respondent's determination of a
Decision will be entered under
Footnotes
1. Petitioner has not raised the issue of
sec. 7491(a) , which shifts the burden of proof to the Commissioner in certain situations. We conclude thatsec. 7491(a)↩ does not apply here because petitioner has not produced any evidence that she has satisfied the preconditions for its application.2. At trial, the Court reserved judgment with respect to respondent's hearsay objection to Exhibit 15-P, purportedly a letter from Immaculate Conception offered as substantiation of the claimed contribution, and directed the parties to address its admissibility on brief. Because petitioner's failure to demonstrate that Immaculate Conception is a qualified organization under
sec. 170(c)↩ is a sufficient reason to sustain respondent's disallowance of the deduction, we will not rule on the admissibility of the letter and do not address whether petitioner has shown that she actually paid the amounts claimed.3. At trial, the Court sustained respondent's hearsay objection to Exhibit 14-P, purportedly a letter from petitioner's union claiming to provide a breakdown of the union dues petitioner paid in 2008. We offered petitioner the opportunity to address on brief whether the exhibit satisfies an exception to the hearsay rule. Petitioner has not done so. Our ruling stands. Nevertheless, as stated, we will allow the deduction.↩
4. Although
sec. 1.152-1, Income Tax Regs. , has not been amended to reflect changes insec. 152 that were enacted by the Working Families Tax Relief Act of 2004, Pub. L. No. 108-311, sec. 201, 118 Stat. at 1169, we continue to rely on the regulation to the extent it is not inconsistent withsec. 152 , as amended. See, e.g.,Gaitor v. Commissioner, T.C. Memo 2010-70">T.C. Memo. 2010-70 , 2010 WL 1407204">2010 WL 1407204, at *2↩ n.9.5. As discussed above, we have found that petitioner did properly substantiate certain job expenses and miscellaneous deductions totaling $2,025.