Wasik v. Comm'r

T.C. Memo. 2007-148

UNITED STATES TAX COURT

STANLEY A. AND CONNIE A. WASIK, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 20920-05. Filed June 13, 2007.

Stanley A. and Connie A. Wasik, pro sese.

Blaine Holiday, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

KROUPA, Judge: Respondent determined a $4,373 deficiency in

petitioners’ Federal income tax for 2003. After concessions,1 we

are asked to decide two issues. First, we are asked to decide

whether petitioner Stanley Wasik (Mr. Wasik) was away from home

1
See infra note 3 for the concessions each party made.
 - 2 -

when he worked as an airline mechanic for Northwest Airlines

(NWA) in Milwaukee to determine whether petitioners are entitled

to deduct expenses for his vehicle, meals, and lodging while Mr.

Wasik was away from Prior Lake, Minnesota, in the Minneapolis

area where he normally lived. We conclude that he was not away

from home when he worked in Milwaukee.2 Second, we are asked to

decide whether petitioners substantiated various other expenses.

We conclude that petitioners have substantiated and are entitled

to deduct some of these other expenses.

FINDINGS OF FACT

Some of the facts have been stipulated and are so found.

Petitioners resided in Prior Lake, Minnesota, at the time they

filed the petition.

Mr. Wasik’s Employment With NWA

Mr. Wasik began working in the airline industry as a

mechanic in 1986. After working for 4 years with Trans World

Airlines, Mr. Wasik began working for NWA. Mr. Wasik worked for

NWA for a total of 15 years, mostly in Minneapolis.

NWA sent layoff notices to some of its employees when it

experienced financial difficulties. The employees receiving the

notices could either choose to accept the layoff or exercise

their seniority. Seniority depended on the length of time an

2
As more fully described infra, we do find that Mr. Wasik is
entitled to deduct vehicle expenses for a training trip to
Duluth, Minnesota.
 - 3 -

employee had worked for NWA regardless of where the airline

facility was located. An employee with higher seniority could

exercise his or her seniority to bump an employee with less

seniority and take that employee’s position. The employee with

less seniority could then take the layoff or find another

employee with less seniority to bump. This seniority bumping

arrangement was in place across the country, so that an NWA

mechanic looking to keep his or her job at NWA had to look at

several different cities to find a less senior employee to bump.

Most employees exercised their seniority in the way that would

give them positions in cities as close as possible to their

families.

Mr. Wasik received a bump notice in September 2003. Mr.

Wasik looked into other job opportunities in the Minneapolis area

but did not find an opportunity that was right for him. Mr.

Wasik chose to exercise his seniority and bump another employee

rather than accept the layoff. Bumping another employee meant

that Mr. Wasik could retain his health care benefits. Mr. Wasik

was able to bump to Milwaukee, Wisconsin. Mr. Wasik was not

experienced with the type of aircraft typically arriving in

Milwaukee, so NWA first sent Mr. Wasik for training in Duluth,

Minnesota, to learn the skills he needed for the Milwaukee job.

Mr. Wasik was in Duluth for 2 weeks at the end of September 2003.

NWA reimbursed Mr. Wasik for his lodging and meals while he was
 - 4 -

attending training in Duluth, but not for vehicle expenses. Mr.

Wasik began the Milwaukee position on October 8, 2003.

Mr. Wasik’s position in Milwaukee had no defined end date.

He hoped to return to Minneapolis soon. He understood that union

representatives were meeting with NWA representatives on behalf

of the mechanics in an effort to return some of them to

Minneapolis. He expected he would be able to return to

Minneapolis as soon as there was an NWA job available there that

he had enough seniority to obtain. The timing of a return to

Minneapolis would depend on NWA’s needs for mechanics in that

city as well as the choices of the other mechanics also subject

to the seniority system. Mr. Wasik worked in Milwaukee until the

end of September 2004, days short of a year.

Mr. Wasik and petitioner Connie Wasik (Mrs. Wasik) decided

that Mrs. Wasik, a homemaker, and their children should remain in

Minnesota while Mr. Wasik worked in Milwaukee. They did not want

to uproot their family and thus decided that Mr. Wasik would

incur additional travel, lodging, and meal expenses in Milwaukee

rather than have the entire family move there. Mr. Wasik rented

an apartment in the Milwaukee area with three other NWA mechanics

during the week, and he traveled to the Minneapolis area to visit

his family on the weekends.

Mr. Wasik had a cellular phone and bought some computer

equipment during 2003. Mr. Wasik also claimed he purchased
 - 5 -

safety shoes and supplies during 2003. Petitioners subscribed to

the Minneapolis Star Tribune newspaper, and everyone in the

family read it.

Mr. Wasik wore a uniform while he worked for NWA. He needed

to clean his uniforms often because his work involved airline

fuel and oil and was messy.

Petitioners claimed they contributed some items to charity

and made cash contributions in 2003.

Petitioners’ Return

Petitioners claimed certain expenses on Schedule A, Itemized

Deductions, on the joint return for 2003. Respondent examined

the return for 2003 and issued petitioners a deficiency notice in

which he disallowed many of the expenses. Of the expenses still

in dispute,3 petitioners assert they are entitled to deduct

claimed cash and noncash charitable contributions as well as

unreimbursed employee business expenses. The unreimbursed

employee business expense deductions petitioners claimed include

expenses for Mr. Wasik’s vehicle while in Duluth and Milwaukee,

lodging and meals while in Milwaukee, and expenses for safety

3
Respondent concedes that petitioners are entitled to deduct
State and local taxes, real estate taxes, a portion of personal
property taxes, home mortgage interest, certain amounts for
tools, a portion of union dues, and tax preparation fees.
Petitioners have conceded they are not entitled to deduct fax
machine expenses, Internet expenses, and investment expenses.
 - 6 -

shoes, supplies, uniform cleaning, financial publications,

cellular telephone, and equipment.

Petitioners timely filed a petition.

OPINION

The parties resolved many of the disputed expenses before

trial. We are asked to determine whether petitioners are

entitled to deduct the remaining expenses. We begin by

considering whether Mr. Wasik was away from home when he incurred

expenses for his vehicle, meals, and lodging in Milwaukee and his

vehicle expenses he incurred when attending training in Duluth.

Travel Expenses While Away From Home

We begin by briefly outlining the rules for deducting travel

expenses. A taxpayer may deduct reasonable and necessary travel

expenses such as those for vehicles, meals, and lodging incurred

while away from home in the pursuit of a trade or business.

Secs. 162(a)(2), 262(a).4 A taxpayer must show that he or she

was away from home when he or she incurred the expense, that the

expense is reasonable and necessary, and that the expense was

incurred in pursuit of a trade or business. Commissioner v.

Flowers, 326 U.S. 465, 470 (1946). The determination of whether

the taxpayer has satisfied these requirements is a question of

fact. Id.

4
All section references are to the Internal Revenue Code in
effect for 2003, and all Rule references are to the Tax Court
Rules of Practice and Procedure, unless otherwise indicated.
 - 7 -

The purpose of the deduction for expenses incurred away from

home is to alleviate the burden on the taxpayer whose business

needs require him or her to maintain two homes and therefore

incur duplicate living expenses. Kroll v. Commissioner, 49 T.C.

557, 562 (1968). The duplicate costs are not deductible where

the taxpayer maintains two homes for personal reasons. Sec. 262;

Commissioner v. Flowers, supra at 474.

A taxpayer may deduct the expenses he or she incurred while

away from home. Sec. 162(a)(2). The word “home” for purposes of

section 162(a)(2) has a special meaning. It generally refers to

the area of a taxpayer’s principal place of employment, not the

taxpayer’s personal residence. Daly v. Commissioner, 72 T.C.

190, 195 (1979), affd. 662 F.2d 253 (4th Cir. 1981); Kroll v.

Commissioner, supra at 561-562.

There is an exception to the general rule that a taxpayer’s

tax home is his or her principal place of employment. Peurifoy

v. Commissioner, 358 U.S. 59, 60 (1958). The taxpayer’s tax home

may be the taxpayer’s personal residence if the taxpayer’s

employment away from home is temporary. Id.; Mitchell v.

Commissioner, T.C. Memo. 1999-283. On the other hand, the

exception does not apply and the taxpayer’s tax home remains the

principal place of employment if the employment away from home is

indefinite. Kroll v. Commissioner, supra at 562.
 - 8 -

It is presumed that a taxpayer will generally choose to live

near his or her place of employment. Frederick v. United States,

603 F.2d 1292, 1295 (8th Cir. 1979). A taxpayer must, however,

have a principal place of employment and accept temporary work in

another location to be away from home. Kroll v. Commissioner,

supra. A person who has no principal place of business nor a

place he or she resides permanently is an itinerant and has no

tax home from which he or she can be away. Deamer v.

Commissioner, 752 F.2d 337, 339 (8th Cir. 1985), affg. T.C. Memo.

1984-63; Edwards v. Commissioner, T.C. Memo. 1987-396.

All the facts and circumstances are considered in

determining whether a taxpayer has a tax home. See Rev. Rul. 73-

529, 1973-2 C.B. 37 (describing objective factors the

Commissioner considers in determining whether a taxpayer has a

tax home). The taxpayer must generally have some business

justification to maintain the first residence, beyond purely

personal reasons, to be entitled to deduct expenses incurred

while temporarily away from that home. Hantzis v. Commissioner,

638 F.2d 248, 255 (1st Cir. 1981); Bochner v. Commissioner, 67

T.C. 824, 828 (1977); Tucker v. Commissioner, 55 T.C. 783, 787

(1971). Where a taxpayer has no business connections with the

primary residence, there is no compelling reason to maintain that

residence and incur substantial, continuous, and duplicative

expenses elsewhere. See Henderson v. Commissioner, 143 F.3d 497,
 - 9 -

499 (9th Cir. 1998), affg. T.C. Memo. 1995-559; Deamer v.

Commissioner, supra; Hantzis v. Commissioner, supra. In that

situation, the expenses incurred while temporarily away from that

residence are not deductible. Hantzis v. Commissioner, supra;

Bochner v. Commissioner, supra; Tucker v. Commissioner, supra;

see McNeill v. Commissioner, T.C. Memo. 2003-65; Aldea v.

Commissioner, T.C. Memo. 2000-136.

We now consider whether Mr. Wasik was away from home when he

was bumped from Minneapolis and took a position in Milwaukee.

Once Mr. Wasik was bumped from Minneapolis, he had no job to

return to there. His choices were to be laid off and have no

work, or to bump other employees and move to different cities to

continue working. NWA gave Mr. Wasik no end date for his

position in Milwaukee. NWA no longer required Mr. Wasik to

perform any services whatsoever in the Minneapolis area once he

was bumped. Mr. Wasik introduced evidence that he searched for

work in the Minneapolis area but was unsuccessful. Although Mrs.

Wasik and the family remained in the family residence with

occasional visits from Mr. Wasik while Mr. Wasik worked in

Milwaukee, this fact alone does not dictate that Mr. Wasik’s tax

home was in Prior Lake, Minnesota, where the family residence was

located. Unlike traveling salespersons who may be required to

return to the home city occasionally between business trips, Mr.
 - 10 -

Wasik’s business ties to the Minneapolis area ceased when he was

bumped.

The Court understands that the NWA mechanics’ lives were

unsettled and disrupted. Mechanics did not know how long they

would have a job in one specific location. They only knew the

system was based on seniority. They could bump less senior

employees, and they could be bumped by more senior employees.

While we acknowledge that Mr. Wasik would have liked to return to

the Minneapolis area to work for NWA, Mr. Wasik did not know when

such a return would be possible due to the seniority system. The

likelihood of Mr. Wasik’s return to a position in Minneapolis

depended on NWA’s needs for mechanics there as well as the

choices of more senior mechanics. Mr. Wasik did not know how

long he would be in Milwaukee or where he might go next. It was

not foreseeable that he would be able to return to Minneapolis at

any time due to the seniority system.

Mr. Wasik testified that he thought his position in

Milwaukee would not last very long because he thought union

representatives were negotiating with NWA to return some

displaced mechanics to Minneapolis. Mr. Wasik acknowledged that

nothing was guaranteed, however, although he believed the union

was doing what it could for the mechanics. Petitioners did not

introduce evidence pertaining to the status of negotiations

between NWA and the union at the time Mr. Wasik accepted the
 - 11 -

Milwaukee job nor evidence indicating that Mr. Wasik even would

have known the substance of the negotiations or how they were

proceeding. Moreover, even assuming the union representatives

did ultimately agree with NWA that NWA would add new mechanic

jobs in Minneapolis at some future time, these jobs would likely

also be subject to the seniority system. Thus, Mr. Wasik would

have no way to know whether he would be senior enough to obtain

one of the Minneapolis jobs if and when the Minneapolis jobs were

made available at some future, unknown date. The Court also

takes judicial notice that union negotiations did not prevail.

Mr. Wasik’s return to Minneapolis was not foreseeable because of

the prospect of union negotiations.

We conclude there was no business reason for petitioners to

maintain a home in the Minneapolis area. Petitioners kept the

family residence in the Minneapolis area for purely personal

reasons. Accordingly, Mr. Wasik was not away from home in

Milwaukee, and the expenses he incurred while there are not

deductible.

We next examine petitioners’ argument that they are entitled

to deduct vehicle expenses Mr. Wasik incurred traveling to Duluth

for training before beginning the Milwaukee position. Respondent

focuses his arguments on brief on the Milwaukee position and

fails to address whether Mr. Wasik was away from home while he

was training in Duluth. Respondent acknowledges that NWA
 - 12 -

considered Mr. Wasik to be away from Milwaukee during that time

and reimbursed Mr. Wasik’s meals and lodging for that reason. It

appears under the circumstances that respondent has conceded that

Mr. Wasik was temporarily away from home with respect to the 2-

week training session in Duluth. We shall discuss, therefore,

infra whether petitioners met the strict substantiation

requirements under section 274(d) concerning the vehicle expenses

incurred traveling to Duluth for training.

Substantiation of Expenses

We next turn to the substantiation issues to determine

whether petitioners are entitled to deduct any remaining

expenses. We begin by noting the fundamental principle that the

Commissioner’s determinations are generally presumed correct, and

the taxpayer bears the burden of proving that these

determinations are erroneous.5 Rule 142(a); INDOPCO, Inc. v.

Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering, 290

U.S. 111 (1933). Moreover, deductions are a matter of

legislative grace, and the taxpayer has the burden to prove he or

she is entitled to any deduction claimed. Rule 142(a); Deputy v.

du Pont, 308 U.S. 488, 493 (1940); New Colonial Ice Co. v.

Helvering, 292 U.S. 435, 440 (1934); Welch v. Helvering, supra.

5
Petitioners do not claim the burden of proof shifts to
respondent under sec. 7491(a). Petitioners also did not
establish they satisfy the requirements of sec. 7491(a)(2). We
therefore find that the burden of proof remains with petitioners.
 - 13 -

This includes the burden of substantiation. Hradesky v.

Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam 540 F.2d

821 (5th Cir. 1976).

A taxpayer must substantiate amounts claimed as deductions

by maintaining the records necessary to establish he or she is

entitled to the deductions. Sec. 6001; Hradesky v. Commissioner,

supra. The taxpayer shall keep such permanent records or books

of account as are sufficient to establish the amounts of

deductions claimed on the return. Sec. 6001; sec. 1.6001-1(a),

(e), Income Tax Regs. The Court need not accept a taxpayer’s

self-serving testimony when the taxpayer fails to present

corroborative evidence. Beam v. Commissioner, T.C. Memo. 1990-

304 (citing Tokarski v. Commissioner, 87 T.C. 74, 77 (1986)),

affd. without published opinion 956 F.2d 1166 (9th Cir. 1992).

Unreimbursed Employee Business Expenses

We shall now consider whether petitioners are entitled to

deduct the claimed expenses, beginning with the unreimbursed

employee business expenses petitioners claimed on Schedule A.

In general, all ordinary and necessary expenses paid or

incurred in carrying on a trade or business during the taxable

year are deductible, but personal, living, or family expenses are

not deductible. Secs. 162(a), 262. Services performed by an

employee constitute a trade or business. O’Malley v.
 - 14 -

Commissioner, 91 T.C. 352, 363-364 (1988); sec. 1.162-17(a),

Income Tax Regs.

If a taxpayer establishes that he or she paid or incurred a

deductible business expense but does not establish the amount of

the deduction, we may approximate the amount of the allowable

deduction, bearing heavily against the taxpayer whose

inexactitude is of his or her own making. Cohan v. Commissioner,

39 F.2d 540, 543-544 (2d Cir. 1930). For the Cohan rule to

apply, however, a basis must exist on which this Court can make

an approximation. Vanicek v. Commissioner, 85 T.C. 731, 742-743

(1985). Without such a basis, any allowance would amount to

unguided largesse. Williams v. United States, 245 F.2d 559, 560

(5th Cir. 1957).

Certain business expenses may not be estimated because of

the strict substantiation requirements of section 274(d). See

sec. 280F(d)(4)(A); Sanford v. Commissioner, 50 T.C. 823, 827

(1968), affd. per curiam 412 F.2d 201 (2d Cir. 1969). For such

expenses, only certain types of documentary evidence will

suffice.

Safety Shoes

We now examine those expenses not subject to the strict

substantiation requirements. Petitioners claimed $104 for safety

shoes during 2003. A taxpayer is entitled to deduct unreimbursed

employee expenses only to the extent that the taxpayer
 - 15 -

demonstrates that he or she could not have been reimbursed for

such expenses by his or her employer. Sec. 162(a); Podems v.

Commissioner, 24 T.C. 21, 23 (1955).

Petitioners offered no receipts from the store where the

safety shoes were allegedly purchased. Moreover, petitioners

failed to show that NWA did not reimburse Mr. Wasik for the

safety shoes. Petitioners have not provided adequate

substantiation for this claimed expense. Petitioners are

therefore not entitled to a deduction for safety shoes for 2003.

Supplies

Petitioners claimed $300 for supplies during 2003. Mr.

Wasik acknowledged at trial that he was not sure what supplies he

sought to deduct on the return. Petitioners offered no testimony

regarding what specific supplies Mr. Wasik needed for his job or

even what supplies petitioners sought to deduct. We conclude

that petitioners are not entitled to a deduction for supplies for

2003.

Cleaning Expenses for Uniforms

Petitioners claimed $720 for cleaning expenses for Mr.

Wasik’s NWA uniforms. Expenses for uniforms are deductible if

the uniforms are of a type specifically required as a condition

of employment, the uniforms are not adaptable to general use as

ordinary clothing, and the uniforms are not worn as ordinary
 - 16 -

clothing. Yeomans v. Commissioner, 30 T.C. 757, 767-769 (1958);

Beckey v. Commissioner, T.C. Memo. 1994-514.

We are satisfied that petitioners incurred deductible

expenses to clean Mr. Wasik’s uniforms. Mr. Wasik gave unclear

testimony, however, regarding how he calculated the cleaning

costs. Petitioners introduced a document on the letterhead of

his certified public accountant that purports to indicate how the

sum was calculated, but it suggests an excessive amount, 22

cleanings for shirts and pants per month, roughly corresponding

to the number of days per month Mr. Wasik worked.

We may estimate the amount of deductible cleaning expenses

under the Cohan rule. We adopt the unit cost of $1.36 listed on

petitioners’ exhibit as the cost to wash or dry one load of

laundry. We find that approximately eight loads of laundry per

month is a reasonable number to yield 22 clean shirts and pairs

of pants per month. Petitioners are therefore entitled to deduct

$261.12 for cleaning expenses for Mr. Wasik’s uniforms in 2003.

Publications

Petitioners claimed $680 for publications. Petitioners

introduced copies of checks made out to Star Tribune totaling

$225.16. Mr. Wasik testified that the amount petitioners claimed

included the Star Tribune delivered to the family home in

Minnesota that everyone in the family read as well as costs for

financial publications that Mr. Wasik used to monitor
 - 17 -

investments. Petitioners did not keep receipts for the purchase

of the financial publications.

The cost of a daily newspaper of general circulation is

generally nondeductible. Wheeler v. Commissioner, T.C. Memo.

1984-425. Petitioners also have not introduced any receipts for

the other financial publications and thus have not substantiated

expenses for these publications. We conclude that petitioners

are therefore not entitled to any deduction for publications in

2003.

Expenses Subject to Strict Substantiation Requirements

We now consider those expenses that are subject to the

additional strict substantiation requirements under section

274(d). Expenses subject to strict substantiation may not be

estimated under the Cohan rule. Sanford v. Commissioner, supra

at 827.

Cellular Phone Expenses

Petitioners claimed $1,668 for cellular phone expenses for

2003. Cellular phones are included in the definition of “listed

property” for purposes of sections 274(d)(4) and 280F(d)(4)(A)(v)

and are thus subject to the strict substantiation requirements.

Gaylord v. Commissioner, T.C. Memo. 2003-273. A taxpayer must

establish the amount of business use and the amount of total use

for the property. Nitschke v. Commissioner, T.C. Memo. 2000-230;
 - 18 -

sec. 1.274-5T(b)(6)(i)(B), Temporary Income Tax Regs., 50 Fed.

Reg. 46016 (Nov. 6, 1985).

Petitioners offered no testimony regarding their claimed

expenses for the cellular phone. Petitioners did introduce

copies of checks made out to Verizon Wireless totaling $1,250.46,

which is less than the claimed deduction. Petitioners did not

provide any breakdown of the personal versus business use of the

cellular phone. In addition, petitioners failed to introduce any

testimony or evidence to prove that NWA required Mr. Wasik to

have a cellular phone. Petitioners are therefore not entitled to

deduct any cellular phone expenses for 2003.

Equipment Expenses

Petitioners claimed $3,500 of equipment expenses.

Petitioners introduced a Best Buy receipt for a computer for

$1,837 to support their deduction. Petitioners did not introduce

any evidence that NWA required Mr. Wasik to have a computer or

that he used the computer for business purposes. Petitioners

also gave no explanation of what equipment made up the roughly

$1,600 difference between the cost of the computer and the amount

petitioners claimed. Mr. Wasik admitted that the deduction was a

mistake. We conclude that petitioners are not entitled to deduct

$3,500 for equipment.
 - 19 -

Vehicle Expenses for Travel to Duluth for Training

We now consider whether petitioners are entitled to deduct

vehicle expenses incurred in connection with Mr. Wasik’s training

trip to Duluth.

Passenger automobiles are listed property under section

280F, and strict substantiation is therefore required. Sec.

274(d)(4). No deduction is allowed for any travel expense unless

the taxpayer corroborates by adequate records or by sufficient

evidence corroborating the taxpayer’s own statement the amount of

the expense, the mileage for each business use of the automobile

and the total mileage for all use of the automobile during the

taxable period, the date of the business use, and the business

purpose for the use. Sec. 1.274-5T(b)(6), Temporary Income Tax

Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985). Adequate records

include the maintenance of an account book, diary, log, statement

of expenses, trip sheets, and/or other documentary evidence,

which, in combination, are sufficient to establish each element

of expenditure or use. Sec. 1.274-5T(c)(2)(i), Temporary Income

Tax Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985).

Taxpayers may use a standard mileage rate established by the

Internal Revenue Service in lieu of substantiating the actual

amount of the expenditure. See sec. 1.274-5(j)(2), Income Tax

Regs. The standard mileage rate is generally multiplied by the

number of business miles traveled. See Rev. Proc. 2002-61, 2002-
 - 20 -

2 C.B. 616 (in effect for transportation expenses incurred during

2003). 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 establish the actual mileage, the time, and

the business purpose of each use. Nicely v. Commissioner, T.C.

Memo. 2006-172; sec. 1.274-5(j)(2), Income Tax Regs.

Petitioners claimed $810 for vehicle expenses, a portion of

which is attributable to Mr. Wasik’s travel to Duluth for

training. Petitioners used the standard business mileage rate of

36 cents per mile in effect for 2003 in computing their vehicle

expenses. Petitioners introduced a calendar indicating the days

in September and October Mr. Wasik drove from Prior Lake,

Minnesota, to Duluth, Minnesota, a total of two round trips.

Petitioners also introduced evidence indicating the 180-mile

distance between petitioners’ home and Duluth. We are satisfied

that petitioners substantiated the mileage and met the strict

substantiation requirements relating to the vehicle expenses for

the Duluth travel. After applying the standard mileage rate in

effect for 2003, we find that petitioners are entitled to deduct

$259.20 for vehicle expenses for 2003.

Charitable Contributions

We finally consider petitioners’ charitable contributions.

Petitioners claimed they contributed $2,575 cash and $1,073 of
 - 21 -

property to charitable organizations in 2003. Charitable

contributions are generally deductible under section 170(a). No

deduction is allowed, however, for any contribution of $250 or

more unless the taxpayer substantiates the contribution by a

contemporaneous written acknowledgment of the contribution by a

qualified donee organization. Sec. 170(f)(8)(A). The deduction

for a contribution of property equals its fair market value on

the date contributed. Sec. 1.170A-1(c)(1), Income Tax Regs.

A taxpayer claiming a charitable contribution of money is

generally required to maintain for each contribution a canceled

check, a receipt from the donee charitable organization showing

the name of the organization and the date and amount of the

contribution, or other reliable written records showing the name

of the donee and the date and amount of the contribution. Sec.

1.170A-13(a)(1), Income Tax Regs.

We first consider petitioners’ cash contributions.

Petitioners claimed they donated to their hometown church in 2003

and introduced a list they created with the name and address of

the church and the dates and amounts of contributions, totaling

$464.6 Petitioners did not use the numbered envelopes provided

by the church that would have allowed the church to verify and

6
The remaining balance of the $2,575 claimed cash donations
appears not to be a donation of cash at all, but the videotapes
Mr. Wasik claims to have purchased and allowed Prior Lake
Athletics for Youth (P.L.A.Y.) coaches to view.
 - 22 -

substantiate donations they made and introduced no receipts or

acknowledgment from the church of any contributions. The balance

of the evidence introduced to substantiate petitioners’ cash

contributions relates to Prior Lake Athletics For Youth

(P.L.A.Y.). Mr. Wasik testified that he purchased instructional

videos and kept them at his home, but that he told the other

P.L.A.Y. coaches they were free to use the videos. Mr. Wasik

acknowledged that he did not donate money to the organization.

We are convinced that petitioners attended the church and

donated money. We may estimate such cash charitable

contributions under the Cohan rule.7 See Fontanilla v.

Commissioner, T.C. Memo. 1999-156. We conclude that petitioners

are entitled to deduct $400 of cash charitable contributions to

the church. Petitioners are not entitled to deduct any amount

for cash charitable contributions related to the instructional

videos as they acknowledged they did not make any cash

contributions to that organization. Moreover, we note that

donations must be to the charity. Petitioners may not deduct the

costs of videos they purchased as a charitable contribution

7
There are now stricter requirements for contributions of
money. Sec. 170(f)(17). No deduction for a contribution of
money in any amount is allowed unless the donor maintains a bank
record or written communication from the donee showing the name
of the donee organization, the date of the contribution, and the
amount of the contribution. Id. This new provision is effective
for contributions made in tax years beginning after Aug. 17,
2006. Pension Protection Act of 2006, Pub. L. 109-280, sec.
1217, 120 Stat. 1080.
 - 23 -

unless they actually contributed the videos to the charity and

substantiated the contribution with a receipt from the charity

for the donation.

We next turn to petitioners’ contributions of property.

Petitioners provided a receipt from the CAP Agency, and Mrs.

Wasik testified she added the amount, $1,284, to the receipt.

Petitioners also introduced a detailed three-page handwritten

list of the items donated and the estimated values, totaling

about $3,800, well over the $1,284 written on the receipt.

Petitioners stated on the return, however, that they donated

property worth $1,073 to Goodwill Industries. Mrs. Wasik stated

that when preparing the detailed list of items, she simply

estimated their values according to what each item was and how

old it was.

We are troubled by the significant inconsistencies and

contradictions in the evidence and testimony on this issue.

Petitioners introduced a receipt from an organization different

from the organization they claimed on their return. In addition,

petitioners’ tax return reflects a different amount from

petitioners’ receipt, which reflects a still different amount

from petitioners’ handwritten notes. Mrs. Wasik did not explain

these discrepancies at trial to the Court’s satisfaction.

We do not find this inconsistent, contradictory testimony to

be credible, and we decline to accept it. We find that
 - 24 -

petitioners have not substantiated to which charities they

donated property or the value of that property. Petitioners are

therefore not entitled to deduct any amount for charitable

contributions of property.

To reflect the foregoing and the concessions of the parties,

Decision will be entered

under Rule 155.