T.C. Memo. 1996-120
UNITED STATES TAX COURT
HORACE E. McCANN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 678-95. Filed March 12, 1996.
Horace E. McCann, pro se.
Horace Crump, for respondent.
MEMORANDUM OPINION
POWELL, Special Trial Judge: This case was assigned
pursuant to the provisions of section 7443A(b)(3) and Rules 180,
181, and 182.1
By notice of deficiency dated November 3, 1994, respondent
determined a deficiency in petitioner's 1991 Federal income tax
and an accuracy-related penalty pursuant to section 6662(a) in
1
Section references are to the Internal Revenue Code in
effect for the year in issue. Rule references are to the Tax
Court Rules of Practice and Procedure.
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the respective amounts of $2,394 and $479. At the time the
petition was filed petitioner resided in Birmingham, Alabama.
The issues are whether petitioner is (1) entitled to
deductions in amounts greater than those allowed by respondent
for charitable contributions, employee business expenses, and
other miscellaneous deductions, and (2) liable for an accuracy-
related penalty for negligence under section 6662(a).
The facts may be summarized as follows. Petitioner is an
employee of the Occupational Safety and Health Administration
(OSHA). On Schedule A of petitioner's 1991 Federal income tax
return petitioner claimed deductions for the following:
Charitable Contributions $3,125
Miscellaneous Employee Business Expenses 4,088
Other Miscellaneous Deductions 5,821
Upon examination respondent disallowed portions of the claimed
deductions as follows:
Allowed Disallowed
Charitable Contributions $2,040 $1,085
Miscellaneous Employee Business Expenses 1,814 2,274
Other Miscellaneous Deductions 670 5,151
The primary difficulty with this case is that, although
petitioner prepared his return for 1991, he cannot identify with
any specificity items of contributions or expenses he claimed.
He had no documentation with regard to the disallowed amounts.
Furthermore, his testimony was unclear and often evasive.
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Charitable Contributions
Petitioner testified that he made cash contributions in the
amount of $1,085 to various, but unspecified, churches and
charitable organizations. Petitioner has the burden of
establishing that respondent's determination is incorrect in
whole or in part, and he has not carried that burden. Rule 142.
Respondent's determination is sustained.
Employee Business Expenses
Petitioner claims that the disputed employee business
expenses arise from three areas: (1) Education and training
expenses; (2) cost of a printer for his computer; and (3) cost of
safety shoes. With regard to the training and eduction
expenses, petitioner contends that he incurred expenses in
learning how to operate computers. He has no records showing the
date or amounts of these alleged expenses.
Petitioner submitted a receipt in the amount of $310.26 for
the cost of a computer printer. According to petitioner he uses
a computer and printer in his employment. Petitioner concedes,
however, that the printer was located at his home and that he was
not required to buy the computer or printer as a condition of his
employment. The printer is so-called listed property as defined
by section 280F(d)(4), and accordingly no deduction is allowable
under section 280F(d)(3)(A).
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Petitioner also submitted a receipt in the amount of $133.86
for safety shoes that he testified are required for his job. We
will allow petitioner a deduction in this amount as an employee
business expense to the extent that the amount exceeds the
limitation contained in section 67(a).
Other Miscellaneous Deductions
Of the $5,151 at issue in this category, the parties agree
that petitioner paid $1,000 in legal expenses during 1991. Legal
expenses are deductible under section 162 or 212 if they are
ordinary and necessary expenses incurred in a trade or business,
expenses incurred for the management, conservation, or
maintenance of property held for the production of income, or
expenses incurred with respect to Federal income taxes. Personal
expenses are not deductible. Sec. 262. Petitioner contends that
$1,000 was incurred in connection with a suit concerning his
Federal income taxes. Whether a legal expense is deductible
under section 162 or 212 depends on the origin and nature of the
expense. United States v. Gilmore, 372 U.S. 39, 42 (1963). It
appears from an order of the Circuit Court of Tuscaloosa County,
Alabama, filed July 15, 1991, that petitioner's former wife
brought an action against petitioner to recover from petitioner
various amounts including "monies withheld from * * * [the former
wife's] income tax refund by the Internal Revenue Service for
payment of taxes due from * * * [petitioner which petitioner] was
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ordered to pay under Paragraph 8 of the Final Decree of Divorce
entered on February 8, 1988." The action, therefore, had nothing
to do with any dispute concerning petitioner and the Internal
Revenue Service over petitioner's tax liability, but rather arose
from a debt between petitioner and his former wife that in turn
arose out of the divorce proceedings. As such the legal expenses
incurred were clearly personal and are nondeductible. United
States v. Gilmore, supra.
The remainder of the miscellaneous deductions in dispute
($4,151) are more nebulous. Petitioner appears to argue that at
least part of this amount was for other legal expenses, including
his former wife's attorney's fees incurred in connection with the
litigation described above. For the same reason, these expenses
are not deductible. Petitioner also contends that a part of this
amount was incurred in purchasing or depreciating a computer.
Petitioner, however, offers no substantiation for this expense.
Moreover, it appears that, similar to the printer discussed
infra, section 280F(d)(3)(A) prohibits any deduction.
In sum, except for the allowance of $133,86 for safety
shoes, respondent's determination is sustained with respect to
the deficiency.
Respondent also determined that petitioner was liable for an
accuracy-related penalty for negligence in the preparation and
filing of his return. Section 6662(a) imposes a penalty in the
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amount of 20 percent on any underpayment to which the section
applies. Section 6662(b) applies to underpayments due to
negligence. Sec. 6662(b)(1). Negligence is the failure to make
a reasonable attempt to comply with the law. Sec. 6662(c).
Petitioner has not established that he used reasonable care in
preparing his return. Indeed, all of the deductions, except for
the safety shoes, are clearly not deductible. Thus, the entire
deficiency as redetermined is attributable to negligence.
Respondent's determination with respect to the penalty under
section 6662(a) is sustained.
Decision will be entered
for respondent.