T.C. Summary Opinion 2006-147
UNITED STATES TAX COURT
CHARLES E. TOWNSEND, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 21894-04S. Filed September 14, 2006.
Charles E. Townsend, pro se.
James H. Harris, Jr., for respondent.
CHIECHI, Judge: This case was heard pursuant to the provi-
sions of section 7463 of the Internal Revenue Code in effect at
the time the petition was filed.1 The decision to be entered is
not reviewable by any other court, and this opinion should not be
cited as authority.
1
Hereinafter, all section references are to the Internal
Revenue Code in effect for the year at issue. All Rule refer-
ences are to the Tax Court Rules of Practice and Procedure.
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Respondent determined a deficiency of $2,290 in petitioner’s
Federal income tax for his taxable year 2002.
The issues remaining for decision are:
(1) Is petitioner entitled to deduct certain claimed medical
and/or dental expenses? We hold that he is not.
(2) Is petitioner entitled to deduct certain claimed chari-
table contributions? We hold that he is not.
(3) Is petitioner entitled to deduct certain claimed automo-
bile expenses? We hold that he is not.
(4) Is petitioner entitled to deduct certain claimed lodging
expenses? We hold that he is not.
(5) Is petitioner entitled to deduct certain claimed meal
expenses? We hold that he is not.
(6) Is petitioner entitled to deduct certain claimed uniden-
tified travel expenses? We hold that he is not.
(7) Is petitioner entitled to deduct certain claimed uniden-
tified business expenses? We hold that he is not.
(8) Is petitioner entitled to deduct certain claimed union
dues in excess of those allowed by respondent? We hold that he
is not.
Background
Some of the facts have been stipulated and are so found.
At the time petitioner filed the petition in this case, he
resided in Keyser, West Virginia.
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From April through October of 2002, petitioner was employed
away from his residence as a truck driver by a pipeline construc-
tion company. During January through March and October 23
through December 2002, petitioner was not employed away from his
residence.
Petitioner timely filed a tax return for his taxable year
2002 (petitioner’s 2002 tax return). In Schedule A-Itemized
Deductions included as part of that return (2002 Schedule A),
petitioner claimed “Medical and Dental Expenses” (medical and/or
dental expenses) totaling $4,880 prior to the application of the
7.5-percent floor imposed by section 213(a). As required by
section 213(a), petitioner reduced the $4,880 of such expenses
claimed in the 2002 Schedule A by 7.5 percent of his adjusted
gross income (i.e., by $4,623).
In his 2002 Schedule A, petitioner also claimed “Gifts to
Charity” (charitable contributions) totaling $980.
Finally, in his 2002 Schedule A, petitioner claimed “Job
Expenses and Most Other Miscellaneous Deductions” (job expenses)
totaling $18,107 prior to the application of the two-percent
floor imposed by section 67(a). Of that total, petitioner
claimed $17,098 as “Unreimbursed employee expenses”, $175 as “Tax
preparation fees”, and $834 as “Other expenses” identified as
union dues. With respect to the $17,098 of claimed unreimbursed
employee expenses, petitioner, as required, completed Form 2106-
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EZ, Unreimbursed Employee Business Expenses, and included that
form as part of petitioner’s 2002 tax return (2002 Form 2106-EZ).
In the 2002 Form 2106-EZ, petitioner claimed the following
unreimbursed employee expenses:
Expense Amount
1
Vehicle $5,844
Travel2 $6,884
Business3 $950
4
Meals $3,420
1
Petitioner calculated the $5,844 of claimed vehicle ex-
penses by using the standard mileage rate for 2002 of 36.5 cents
per mile and multiplying that rate by 16,012, the number of miles
that petitioner claims he drove his automobile for business
(business miles) during 2002.
2
In the 2002 Form 2106-EZ, the expense category “Travel”
(travel expense category) covered “Travel expenses while away
from home overnight, including lodging, airplane, car rental,
etc.”, but not expenses for meals or entertainment. Petitioner
did not specify in the 2002 Form 2106-EZ the type(s) of travel
expenses that he was claiming.
3
In the 2002 Form 2106-EZ, the expense category “Business”
covered business expenses not included in the expense categories
“Vehicle”, “Travel”, and “Parking fees, tolls, and transporta-
tion, including train, bus, etc., that did not involve overnight
travel or commuting to and from work”. Petitioner did not
specify in the 2002 Form 2106-EZ the type(s) of business expenses
that he was claiming.
4
In calculating the $3,420 of claimed meal expenses, peti-
tioner claimed in the 2002 Form 2106-EZ total meal expenses of
$6,840 and reduced that total by 50 percent, as required by sec.
274(n).
As required by section 67(a), petitioner reduced the $18,107 of
total job expenses claimed in the 2002 Schedule A by two percent
of his adjusted gross income (i.e., by $1,233).
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In determining the taxable income reported in petitioner’s
2002 tax return, petitioner deducted $257 as medical and/or
dental expenses and $16,874 as job expenses, as well as the other
itemized deductions claimed in the 2002 Schedule A, including the
claimed $980 of charitable contributions, that were not subject
to the 7.5-percent floor imposed by section 213(a) or the two-
percent floor imposed by section 67(a).
Respondent issued to petitioner a notice of deficiency
(notice) for his taxable year 2002. In that notice, respondent
disallowed the deductions for the $257 of medical and/or dental
expenses that petitioner claimed in the 2002 Schedule A after the
reduction required by section 213(a), the $980 of charitable
contributions that petitioner claimed in the 2002 Schedule A, and
the $16,874 of job expenses that petitioner claimed in the 2002
Schedule A after the reduction required by section 67(a).
Discussion
Petitioner bears the burden of proving that the determina-
tions in the notice are erroneous.2 Rule 142(a); Welch v.
Helvering, 290 U.S. 111 (1933). Moreover, deductions are a
matter of legislative grace, and the taxpayer bears the burden of
proving entitlement to any deduction claimed. INDOPCO, Inc. v.
2
Petitioner does not claim that the burden of proof shifts
to respondent under sec. 7491(a). In any event, petitioner has
failed to establish that he satisfies the requirements of sec.
7491(a)(2). On the record before us, we find that the burden of
proof does not shift to respondent under sec. 7491(a).
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Commissioner, 503 U.S. 79, 84 (1992). Petitioner was required to
maintain records sufficient to establish the amount of any
deduction claimed. Sec. 6001; sec. 1.6001-1(a), Income Tax Regs.
Petitioner claims3 the following deductions: (1) Medical
and/or dental expenses of $4,880 prior to the application of the
7.5-percent floor imposed by section 213(a); (2) charitable
contributions of $980; and (3) job expenses of $16,874 prior to
the application of the two-percent floor imposed by section 67(a)
that consisted of (a) automobile expenses of $5,844, (b) lodging
expenses of $999.84 that petitioner included as part of the
$6,884 claimed in the travel expense category in the 2002 Form
2106-EZ, (c) meal expenses of $3,420,4 (d) the balance of
$5,884.16 that petitioner included as part of the $6,884 claimed
in the travel expense category in the 2002 Form 2106-EZ,
(e) unidentified business expenses of $950, and (f) union dues of
$188 in excess of those allowed by respondent.5 Respondent
counters that petitioner has failed to carry his burden of
3
Although the Court ordered petitioner to file a posttrial
brief, he failed to do so.
4
In the 2002 Form 2106-EZ, petitioner claimed total meal
expenses of $6,840, which he reduced by 50 percent, as required
by sec. 274(n).
5
Respondent concedes that during the year at issue peti-
tioner paid $646 of the $834 of union dues that petitioner
claimed in the 2002 Schedule A included as part of petitioner’s
2002 tax return.
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establishing his entitlement to any of the deductions that he is
claiming.6
Claimed Medical and/or Dental Expenses
Petitioner presented no evidence and advances no argument
with respect to the medical and/or dental expenses for which he
claims a deduction.
On the record before us, we find that petitioner has failed
to carry his burden of establishing that he is entitled for his
taxable year 2002 to the deduction that he claims for medical
and/or dental expenses.
Claimed Charitable Contributions
Section 170(a) allows a deduction for any charitable contri-
bution, as defined in section 170(c), that is made during the
taxable year. A taxpayer claiming a deduction under section 170
must satisfy certain requirements prescribed by regulations
promulgated under that section. See sec. 1.170A-13, Income Tax
Regs.
In support of his position that he is entitled for his
taxable year 2002 to a deduction of $980 for charitable contribu-
6
In addition to respondent’s concession that petitioner paid
union dues of $646, see supra note 5, respondent concedes that
during the year at issue petitioner paid a tax preparation fee of
$175. Respondent’s concessions will not affect the deficiency
determined in the notice unless we were to sustain petitioner’s
position with respect to his claimed expenditures for the use of
his automobile, lodging, meals, unidentified travel purposes, or
unidentified business purposes. That is because of the two-
percent floor imposed by sec. 67(a).
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tions, petitioner apparently relies on a letter dated March 18,
2005 (petitioner’s March 18, 2005 letter). We find petitioner’s
March 18, 2005 letter to be nothing more than a self-serving and
conclusory document that in any event does not satisfy certain
requirements prescribed by regulations promulgated under section
170. See sec. 1.170A-13, Income Tax Regs.
On the record before us, we find that petitioner has failed
to carry his burden of establishing that he is entitled for his
taxable year 2002 to the deduction that he claims for charitable
contributions.
Claimed Job Expenses
A taxpayer is entitled to deduct all the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on a trade or business, “including * * * traveling
expenses (including amounts expended for meals and lodging other
than amounts which are lavish or extravagant under the circum-
stances) while away from home in the pursuit of a trade or
business”. Sec. 162(a).
Claimed Expenditures for Use of an Automobile,
Lodging, Meals, and Certain Unidentified Travel Purposes
For certain kinds of expenses otherwise deductible under
section 162(a), a taxpayer must satisfy certain substantiation
requirements set forth in section 274(d) before such expenses
will be allowed as deductions. In order for petitioner’s claimed
expenditures for the use of his automobile, lodging, meals, and
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certain unidentified travel purposes to be deductible, such
expenditures must satisfy the requirements of not only section
162(a) but also section 274(d). To the extent that petitioner
carries his burden of showing that such claimed expenditures
satisfy the requirements of section 162(a) but fails to satisfy
his burden of showing that such expenditures satisfy the
recordkeeping requirements of section 274(d), petitioner will
have failed to carry his burden of establishing that he is
entitled to deduct such expenditures, regardless of any equities
involved. See sec. 274(d); sec. 1.274-5T(a), Temporary Income
Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985).
The recordkeeping requirements of section 274(d) will
preclude petitioner from deducting expenditures otherwise allow-
able under section 162(a)(2) for the use of his automobile,
lodging, meals, and certain unidentified travel purposes unless
he substantiates the requisite elements of each such expenditure
or use. See sec. 274(d); sec. 1.274-5T(b)(1), Temporary Income
Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985). A taxpayer is
required to
substantiate each element of an expenditure or use
* * * by adequate records or by sufficient evidence
corroborating his own statement. Section 274(d) con-
templates that a taxpayer will maintain and produce
such substantiation as will constitute proof of each
expenditure or use referred to in section 274. Written
evidence has considerably more probative value than
oral evidence alone. In addition, the probative value
of written evidence is greater the closer in time it
relates to the expenditure or use. A contemporaneous
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log is not required, but a record of the elements of an
expenditure or of a business use of listed property
made at or near the time of the expenditure or use,
supported by sufficient documentary evidence, has a
high degree of credibility not present with respect to
a statement prepared subsequent thereto when generally
there is a lack of accurate recall. Thus, the corrobo-
rative evidence required to support a statement not
made at or near the time of the expenditure or use must
have a high degree of probative value to elevate such
statement and evidence to the level of credibility
reflected by a record made at or near the time of the
expenditure or use supported by sufficient documentary
evidence. The substantiation requirements of section
274(d) are designed to encourage taxpayers to maintain
the records, together with documentary evidence, as
provided in paragraph (c)(2) of this section [1.274-5T,
Temporary Income Tax Regs.].
Sec. 1.274-5T(c)(1), Temporary Income Tax Regs., 50 Fed. Reg.
46016-46017 (Nov. 6, 1985).
The elements that a taxpayer must prove with respect to an
expenditure for traveling away from home on business, including
expenditures for the use of his automobile, lodging, meals, and
certain unidentified travel purposes are: (1) The amount of each
such expenditure for traveling away from home, except that the
daily cost of the traveler’s own breakfast, lunch, and dinner may
be aggregated; (2) the time of each such expenditure, i.e., the
dates of departure and return for each trip away from home and
the number of days away from home spent on business; (3) the
place of each such expenditure, i.e., the destinations or local-
ity of travel, described by name of city or town or other similar
designation; and (4) the business purpose of each such expendi-
ture, i.e., the business reason for the travel or the nature of
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the business benefit derived or expected to be derived as a
result of travel. Sec. 1.274-5T(b)(2), Temporary Income Tax
Regs., 50 Fed. Reg. 46014-46015 (Nov. 6, 1985).
In lieu of substantiating the actual amount of any expendi-
ture relating to the business use of a passenger automobile, a
taxpayer may use a standard mileage rate established by the
Internal Revenue Service (standard mileage rate). See sec.
1.274-5(j)(2), Income Tax Regs.; Rev. Proc. 2001-54, sec. 5.02,
2001-2 C.B. 530, 532. The standard mileage rate is to be multi-
plied by the number of business miles traveled. Rev. Proc. 2001-
54, sec. 5.02, 2001-2 C.B. at 532. The use of the standard
mileage rate establishes only the amount deemed expended with
respect to the business use of a passenger automobile. Sec.
1.274-5(j)(2), Income Tax Regs. The taxpayer must still estab-
lish the amount (i.e., the business mileage), the time, and the
business purpose of each such use. Id.
In lieu of substantiating the actual amount spent for a meal
while traveling away from home on business, a taxpayer may use an
amount computed at the Federal meal and incidental expense (M&IE)
rate set forth in Appendix A of 41 C.F.R. chapter 301 (Appendix
A) for the locality of travel for each calendar day that the
taxpayer is traveling away from home on business. See sec.
1.274-5(j)(1), Income Tax Regs.; Rev. Proc. 2001-47, secs.
3.02(1)(a), 4.03, 2001-2 C.B. 332, 333-334 (applicable to, inter
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alia, Jan. 1 through Sept. 30, 2002); Rev. Proc. 2002-63, secs.
3.02(1)(a), 4.03, 2002-2 C.B. 691, 693-694 (applicable to, inter
alia, Oct. 1 through Dec. 31, 2002). The use of the M&IE estab-
lishes only the daily amount deemed spent for meals while travel-
ing away from home on business. Sec. 1.274-5(j)(1), Income Tax
Regs. The taxpayer must still establish the time, the place, and
the business purpose of the daily expenditures for meals. Id.
In support of the deductions that petitioner claims for his
taxable year 2002 for expenditures for the use of his automobile,
lodging, meals, and certain unidentified travel purposes, peti-
tioner testified that during that year he worked in North
Carolina and Pennsylvania.7 In support of his testimony, peti-
tioner relies on a document (document one) that his certified
public accountant prepared sometime after the Internal Revenue
Service contacted petitioner regarding petitioner’s 2002 tax
return. Document one purports to list the job site locations at
which petitioner claims he worked during 2002 (i.e., West Jeffer-
son, North Carolina, and Wind Gap, Pennsylvania), the respective
time periods during which he claims he worked at such locations,
and the respective round-trip mileages from Core, West Virginia,
to such locations. The record does not establish where peti-
tioner resided during the periods in 2002 when petitioner claims
7
Petitioner did not identify during his testimony the loca-
tions in N.C. or Pa. where he claims he worked during his taxable
year 2002.
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he traveled to certain job site locations in North Carolina and
Pennsylvania.8 Nor does the record establish the location of the
principal office or place of business of petitioner’s employer
for such periods. Document one also purports to list meal ex-
penses in 2002 of $38 per day for (1) 24 days in each of the
months of April, May, July, August, and October and (2) 30 days
in each of the months of June and September. Petitioner also
relies on another document (document two) to support his position
with respect to the deduction that he is claiming for lodging
expenses. It is not clear from the record when document two was
prepared. Document two purports to list the dates on which
petitioner incurred lodging expenses, the respective names of the
establishments at which such expenses were incurred, and the
amounts of such expenses.
Petitioner concedes that document one was not prepared at or
near the time in 2002 of the expenditures for the use of his
automobile, lodging, meals, and certain unidentified travel
purposes that are at issue. Petitioner failed to establish when
document two was prepared. We find that document one and docu-
ment two do not have the high degree of credibility that would be
present with a record or statement made at or near the time of
the use of petitioner’s automobile and the expenditures for
8
In petitioner’s 2002 tax return, which he timely filed,
petitioner indicated that his home address was Keyser, W. Va.
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lodging, meals, and certain unidentified travel purposes that are
at issue. See sec. 1.274-5T(c)(1), Temporary Income Tax Regs.,
50 Fed. Reg. 46016-46017 (Nov. 6, 1985). Although petitioner
testified about document one and document two, we found his
testimony to be sparse, vague, general, and conclusory. We do
not find his testimony to be the type of reliable corroborative
evidence required to support a record or statement not made at or
near the time of the use or expenditures at issue. See id. We
are unwilling to rely on document one, document two, and peti-
tioner’s testimony to establish petitioner’s position with re-
spect to the claimed expenditures for the use of his automobile,
lodging, meals, and certain unidentified travel purposes.9
On the record before us, we find that petitioner has failed
to carry his burden of establishing that he is entitled for his
taxable year 2002 to the deductions that he claims for expendi-
tures for the use of his automobile, lodging, meals, and certain
unidentified travel purposes.
Claimed Unidentified Business Expenses
Petitioner presented no evidence and advances no argument
with respect to the unidentified business expenses for which he
9
Assuming arguendo that we had found document one, document
two, and petitioner’s testimony to be reliable, those documents
and that testimony do not establish all of the elements that
petitioner must prove in order to satisfy the requirements under
sec. 274(d). See sec. 1.274-5T(b)(2), Temporary Income Tax
Regs., 50 Fed. Reg. 46014-46015 (Nov. 6, 1985).
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claims a deduction.
On the record before us, we find that petitioner has failed
to carry his burden of establishing that he is entitled for his
taxable year 2002 to the deduction that he claims for certain
unidentified business expenses.
Claimed Union Dues
In support of his position that he is entitled for his
taxable year 2002 to deduct $188 of union dues in excess of the
amount allowed by respondent,10 petitioner relies on document two.
Document two purports to list union dues totaling $645.50 that
petitioner claims he paid in 2002 to three different unions.
Petitioner did not offer any other evidence, such as canceled
checks, to corroborate that claim. In any event, the total
amount of union dues that petitioner claims in document two is
$645.50, which is less than the amount conceded by respondent.
On the record before us, we find that petitioner has failed
to carry his burden of establishing that he is entitled for his
taxable year 2002 to the deduction that he claims for union dues
in excess of the amount allowed by respondent.
We have considered all of the parties’ contentions and
arguments that are not discussed herein, and we find them to be
without merit, irrelevant, and/or moot.
10
See supra note 5.
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To reflect the foregoing,
Decision will be entered for
respondent.