T.C. Memo. 2009-221
UNITED STATES TAX COURT
ARTHUR BRUCE AND LINDA LEE COPPIN, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 3921-08, 7032-08.1 Filed September 23, 2009.
Arthur Bruce and Linda Lee Coppin, pro sese.
J. Robert Cuatto, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
HALPERN, Judge: By notices of deficiency, respondent
determined deficiencies of $2,411 and $2,385 in petitioners’
Federal income tax for taxable (calendar) years 2004 and 2005.
The deficiencies for both years involve various employee business
deductions that respondent disallowed.
1
The cases were consolidated by order of the Court dated
Dec. 2, 2008.
- 2 -
Unless otherwise stated, section references are to the
Internal Revenue Code in effect for the years in issue, and Rule
references are to the Tax Court Rules of Practice and Procedure.
We round all dollar amounts to the nearest dollar.
FINDINGS OF FACT
Some facts are stipulated and are so found. The stipulation
of facts, with accompanying exhibits, is incorporated herein by
this reference. Petitioners resided in Arizona when they filed
the petition.
During 2004 and until April 17, 2005, Arthur Bruce Coppin
(petitioner) was a case initiation clerk at the U.S. Bankruptcy
Court for the Central District of California, responsible for
“fully [supporting] the Clerk’s Office in all areas of
operations, such as case administration, case closing, intake and
records”. Petitioner performed those duties at the bankruptcy
court.
Petitioners’ 2004 and 2005 Federal Income Tax Returns
For 2004 and 2005, petitioners jointly filed Forms 1040,
U.S. Individual Income Tax Return. For those 2 years,
petitioners had gross income of $41,969 and $46,991. On Forms
2106, Employee Business Expenses, submitted with their Schedules
A, Itemized Deductions, petitioners claimed the following
deductions:
- 3 -
Description 2004 2005
Vehicle expenses $6,896 $7,682
Parking fees, tolls, and
transportation expenses 901 1,609
Travel expenses while away
from home overnight 923 984
Other business expenses 9,063 8,533
Meal and entertainment expenses 2,163 2,874
Total1 19,945 21,682
1
Because of rounding, the sum of the 2004 deductions appears
to exceed the total.
OPINION
I. Preliminary Matters
A. The 14-Day Rule
At trial, petitioner sought to introduce into evidence 12
exhibits not stipulated. We sustained respondent’s objections to
10 of them on the ground that petitioner had failed to comply
with our standing pretrial order, which states that any
“documents or materials” that a party expects to use at trial,
but which are not stipulated, must “be identified in writing and
exchanged by the parties at least 14 days before the first day of
the trial session.” The order states that we may “refuse to
receive * * * any document or material not so stipulated or
exchanged”. Petitioner argues that he was first notified of that
14-day rule on November 21, 2008, at a meeting with respondent’s
counsel fewer than 14 days before trial in these cases. Yet we
sent petitioner two copies of our standing pretrial order (one
for each docket) dated July 1, 2008, and petitioner never
suggested--and does not suggest--that he did not receive them.
- 4 -
He thus had more than adequate notice; his argument is without
merit.
B. Petitioner’s Right To Testify
On brief, petitioner states that we denied not only his
“submission of evidence”, but also “any testimony based upon that
evidence.” Petitioner avers: “This severely prejudiced any
outcome of the trial.”
At trial, moments before petitioner took the stand, we
expressly told him: “I again tell you that you are free to
testify in support of your claims.” Once he had taken the stand,
we said again: “Now, this is the time for you to testify in
support of your case.” At no time did we suggest that our
refusal to accept proffered written evidence in any way
restricted the scope of his testimony, and petitioner said
nothing to imply that he thought his right to testify was in any
way limited. Further, we asked petitioner more than once after
he testified whether he had any other evidence he wanted to
present. He responded: “I believe I have presented my case,
sir.” Therefore, we deny that petitioner suffered any prejudice.
C. Petitioner’s Employment Status
Petitioner insists that he was not a Federal employee but
rather was an at will employee. Petitioner seems to believe that
the former is entitled “to receive compensation for certain job
expenses and may receive an official expense account” but that
the latter is not so entitled. Without accepting petitioner’s
statements as true, we note that his argument is unnecessary:
- 5 -
Respondent concedes that petitioner was never reimbursed for any
of his claimed expenses.
II. Petitioner’s Employee Business Expense Deductions
Section 162(a) permits “as a deduction all the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on any trade or business”. To be deductible, ordinary
and necessary expenses must be “directly connected with or
pertaining to the taxpayer’s trade or business”. Sec. 1.162-
1(a), Income Tax Regs.
Personal, living, or family expenses are not deductible
except as otherwise expressly permitted. Sec. 262(a).
A. 2004
Petitioner bears the burden of proof. See Rule 142(a).2 In
support of his claimed employee business expense deduction of
$19,945, petitioner offers detailed records and receipts of his
monthly expenses and testified in part to explain those records
and receipts.
1. Vehicle Expenses
Petitioner’s $6,896 deduction includes almost all the
expenses related to maintaining and running a car, including
everything from gas to petitioner’s driver’s license.
Petitioner concedes that he cannot deduct commuting
expenses. On his 2004 tax return, petitioner stated that he and
2
Petitioner makes no argument that the burden of proof has
shifted to respondent pursuant to sec. 7491(a), and we would not
sustain such an argument. Among other things, as discussed
infra, petitioner has introduced no credible evidence that he is
entitled to the deductions here in issue. See sec. 7491(a)(1).
- 6 -
his wife had only one car and that they drove 18,743 miles.
Petitioner stated that his “[a]verage daily roundtrip” commute
was 30 miles and that he commuted 938 miles; petitioner also
stated that he drove 16,020 business miles. That is, 85 percent
of the total miles petitioner and his wife drove were his
noncommuting business miles. Thus, in 2004, petitioner contends
that he drove to and from work only 31 times and that he and his
wife drove, in addition, only 1,785 personal miles, or less than
5 miles a day.
Petitioner has failed to substantiate his vehicle expenses
under section 274(d). See sec. 280F(d)(4) (defining “any
passenger automobile” as “‘listed property’”, any deduction
related to which requires substantiation under section
274(d)(4)). On brief, petitioner states that he “frequently
attended training meetings, lunch meetings, and scheduled work at
* * * other locations”, and that he presented “evidence in the
form of daily written logs, receipts, notes * * *, and * * *
testimony during trial.” Petitioner quotes the flush language in
section 274(d), which lists the four elements of the expense that
the taxpayer must substantiate, and evidently he believes that
his records and receipts run the gamut of those requirements.3
3
In pertinent part, sec. 274(d) provides that no deduction
shall be allowed with respect to “any listed property”
unless the taxpayer substantiates by adequate records
or by sufficient evidence corroborating the taxpayer’s
own statement (A) the amount of such expense or other
item, (B) the time and place of the travel,
entertainment, amusement, recreation, or use of the
(continued...)
- 7 -
They do not. Specifically, petitioner offers no evidence of “the
time and place of the travel” or “the business purpose of the
expense”. See sec. 274(d); see also Rule 143(b) (“[S]tatements
in briefs * * * do not constitute evidence.”). Petitioner’s
records may detail his vehicle expenses, but they offer no
evidence regarding his business use of his car. Petitioner has
failed to satisfy his burden of proof. We deny petitioner’s
$6,896 deduction for vehicle expenses.
2. Parking Fees, Tolls, and Transportation Expenses
Petitioner’s $901 deduction includes only the cost of
monthly bus passes. In support of the deduction, petitioner
alleges that he took public transportation to work. Yet
petitioner concedes that he cannot deduct commuting expenses.
See, e.g., Neal v. Commissioner, 681 F.2d 1157 (9th Cir. 1982)
(holding that ordinary commuting expenses are nondeductible
personal expenditures), affg. T.C. Memo. 1981-407. There is no
deduction analogous to the exclusion in section 132(f) for the
qualified transportation fringe benefit. We deny petitioner’s
$901 deduction for parking fees, tolls, and transportation
expenses.
3
(...continued)
facility or property, or the date and description of
the gift, (C) the business purpose of the expense or
other item, and (D) the business relationship to the
taxpayer of persons entertained, using the facility or
property, or receiving the gift. * * *
- 8 -
3. Travel Expenses While Away From Home Overnight
Petitioner’s $923 deduction, according to his records and
receipts, includes various expenses from three alleged business
trips. Petitioner, however, has failed to substantiate those
expenses under section 274(d). See sec. 274(d)(1).
Specifically, petitioner offers no evidence of “the time and
place of the travel” or “the business purpose of the expense”.
See sec. 274(d). Petitioner’s records may detail the amounts of
his expenses, but they do not explain when, where, or why he
traveled. Petitioner has failed to satisfy his burden of proof.
We deny petitioner’s $923 deduction for travel expenses while
away from home overnight.
4. Other Business Expenses
Petitioner’s $9,063 deduction includes expenses for
“grooming”, clothing, and dry cleaning. Petitioner deducted
additional expenses pursuant to section 280A(c)(1) for his “home
office”, including the cost of one-quarter of his rent, half his
electric bill, and his phone and Internet bill. On brief,
petitioner concedes he is not entitled to deduct the cost of his
phone service. See sec. 262(b). Although petitioner deducted
many other expenses, he does not explain how any of those other
expenses related to his business of being an employee of the
bankruptcy court; moreover, he cites no authority to support
those items.4 We take petitioner’s omission as his concession.
4
For example, petitioner deducted the cost of postage,
office supplies, personal checks, his health club membership, and
(continued...)
- 9 -
See Mendes v. Commissioner, 121 T.C. 308, 312-313 (2003) (“If an
argument is not pursued on brief, we may conclude that it has
been abandoned.”).
a. Grooming, Clothing, and Dry Cleaning Expenses
“Haircuts are nondeductible personal expenses even when
required as a condition of employment.” Boltinghouse v.
Commissioner, T.C. Memo. 2007-324. Petitioner is not entitled to
deduct any expense relating to his appearance. See id.
For the cost of clothing to be deductible as an ordinary and
necessary business expense, (1) the clothing must be required or
essential in the taxpayer’s employment, (2) the clothing cannot
be suitable for general or personal wear, and (3) the clothing
cannot be so worn. E.g., Deihl v. Commissioner, T.C. Memo. 2005-
287. On brief, petitioner states that his “shirts, work slacks *
* *, and soft-soled work shoes” were all “specific to court needs
and not suitable for general wear.”
Petitioner misunderstands the cases he cites to support his
deduction for work clothes. For example, petitioner cites Hynes
v. Commissioner, 74 T.C. 1266 (1980). In Hynes v. Commissioner,
supra at 1291, we denied a television newsman any deduction for
the cost of his work clothes, stating: “The fact that the
petitioner chose not to wear his business clothes when he was
away from the station does not mean that such clothes were not
suitable for his private and personal wear. Indeed, most people
4
(...continued)
business gifts. At trial, petitioner conceded that no work duty
required him to pay for a health club membership.
- 10 -
do not wear their business clothes at home.” Petitioner fails to
distinguish himself from the taxpayer in Hynes because he fails
to offer any evidence to show that his work clothes are not
suitable for general wear by him and by men in general.5 Indeed
(other than receipts) petitioner offers no evidence at all
related to his claimed expenses for work clothes. Because he
offers no evidence that the expenses he seeks to deduct were
related to clothing required or essential to his employment and
unsuitable for general wear, petitioner has failed to satisfy his
burden of proof. Petitioner’s clothing expenses thus are
nondeductible personal expenses under section 262(a), as are his
expenses for dry cleaning. See Boltinghouse v. Commissioner,
supra.
b. Home Office Expenses
In pertinent part, section 280A provides the following:
SEC. 280A. DISALLOWANCE OF CERTAIN EXPENSES IN
CONNECTION WITH BUSINESS USE OF HOME * * *
(a) General Rule.--Except as otherwise provided in
this section, in the case of a taxpayer who is an
individual * * *, no deduction otherwise allowable
under this chapter shall be allowed with respect to the
use of a dwelling unit which is used by the taxpayer
during the taxable year as a residence.
* * * * * * *
5
On brief, petitioner states that the cuffs of his shirts
have “severe ink stains” and thus his shirts are “not suitable
for general wear”. First, “statements in briefs * * * do not
constitute evidence.” Rule 143(b). Second, even if petitioner
wore his work clothes only when at work, those clothes are
nonetheless “of a type that people ordinarily wear” and, for that
reason, are “suitable for general wear”. Boltinghouse v.
Commissioner, T.C. Memo. 2007-324.
- 11 -
(c) Exceptions for Certain Business * * * Use;
Limitation on Deductions for Such Use.--
(1) Certain business use.--Subsection
(a) shall not apply to any item to the extent
such item is allocable to a portion of the
dwelling unit which is exclusively used on a
regular basis--
(A) as the principal place of
business for any trade or business
of the taxpayer * * *
* * * * * * *
In the case of an employee, the preceding
sentence shall apply only if the exclusive
use referred to in the preceding sentence is
for the convenience of his employer. For
purposes of subparagraph (A), the term
“principal place of business” includes a
place of business which is used by the
taxpayer for the administrative or management
activities of any trade or business of the
taxpayer if there is no other fixed location
of such trade or business where the taxpayer
conducts substantial administrative or
management activities of such trade or
business.
We deny petitioner any deduction under section 280A(c)(1)
for his home office. First, petitioner offers no evidence that
his home office was for the convenience of his employer, alleging
on brief only that he had the implied consent of his employer to
use a home office for secondary duties. Second, petitioner
concedes that his home office was in his bedroom; petitioner thus
cannot satisfy the requirement that his home office be
exclusively used as his principal place of business. Third,
petitioner concedes that the bankruptcy court was his principal
place of business. Each of those reasons is sufficient to deny
petitioner any deduction under section 280A(c)(1).
- 12 -
c. Conclusion
For the reasons stated, we deny petitioner’s $9,063
deduction for other business expenses.
5. Meal and Entertainment Expenses
Petitioner’s $2,163 deduction includes his expenses at
various restaurants and one-third of various grocery bills.
(Petitioner deducted one-third of each grocery bill because each
day he had “three meals and one at the court”.) Petitioner also
deducted various entertainment expenses (including movie tickets
for himself and his wife). Petitioner cites three cases to
support his deduction for meal expenses. He cites no cases and
makes no argument to support his deduction for entertainment
expenses. We take that as his concession that he is not entitled
to any deduction for entertainment expenses. See Mendes v.
Commissioner, supra at 312-313 (“If an argument is not pursued on
brief, we may conclude that it has been abandoned.”).
First, petitioner cites Sutter v. Commissioner, 21 T.C. 170,
173 (1953), for the proposition that “the presumptive
nondeductibility of personal expenses may be overcome only by
clear and detailed evidence * * * that the expenditure in
question was different from or in excess of that which would have
been made for the taxpayer’s personal purposes.” Petitioner
argues: “Those differences [here] include preparation, quality,
and quantity of meals prepared for the specific purpose of
lunch.” Contrary to that statement, however, petitioner offers
no evidence that he spent any more than he would have spent had
- 13 -
he eaten all his meals at home; indeed, petitioner offers no
evidence that his lunches at work differed in any way from his
lunches at home. We therefore accord petitioner’s statement on
brief no weight. See Rule 143(b).
Second, petitioner cites Christey v. United States, 841 F.2d
809 (8th Cir. 1988), to support his deductions for “lunch
expenses * * * using the formula of 1/3 of food cost--a fair
fraction based on actual items purchased.” In Christey, the
Court of Appeals for the Eighth Circuit held that State highway
patrol officers were “entitled to deduct as ordinary and
necessary business expenses under § 162(a) of the Internal
Revenue Code expenses incurred for restaurant meals while on
duty.” Id. at 809 (fn. ref. omitted). Christey, however, is
distinguishable. The Court of Appeals focused on the “specific
instructions concerning meal breaks while on duty” that the
officers had to follow. Id. at 810.
The restrictions here and their cumulative effect are
substantial. The troopers must eat at certain times
and places [i.e., a public restaurant]. The troopers
remain on duty throughout their meals. They may not
bring a meal from home or return home to eat their
meal. As part of their job the troopers are required
during their meal break to be available to the public
not only to respond to emergencies but to provide any
information the public may seek. Thus, they are
frequently interrupted during meals and are subject to
being called away from a meal for an emergency, whether
they have eaten what they have paid for or not.
Id. at 812-813 (fn. refs. omitted). The Court of Appeals found
that, as a result, the regulation governing meal breaks while on
duty “effectively requires the troopers ‘to spend amounts
different from or in excess of amounts they would have spent for
- 14 -
their own personal purposes.’” Id. at 213 n.11 (quoting Sutter
v. Commissioner, supra at 173). As we stated supra, petitioner
offers no evidence that his lunches at work differed in cost or
in kind from his lunches at home. Christey is inapposite.
Third, petitioner cites Moss v. Commissioner, 758 F.2d 211,
212 (7th Cir. 1985), affg. 80 T.C. 1073 (1983), for the
proposition that “meals are deductible under section 162(a) when
they are ordinary and necessary business expenses (provided the
expense is substantiated with adequate records, see section
274(d)) even if they are not within the express permission of any
other provision”. Petitioner argues that he “provided adequate
records in the form of daily logs, receipts, and testimony that
substantiate the validity of his meal expenses while at work.”
If by “validity” petitioner means “cost”, then we might agree.
But petitioner must substantiate more than the cost, and he has
failed to do so. See sec. 274(d). Moreover, petitioner has
failed to distinguish Moss, in which the Court of Appeals for the
Seventh Circuit denied the taxpayer any deduction for meal
expenses under section 162(a). The taxpayer sought to deduct his
meal expenses because he and his partners met daily to eat lunch
at a cafe to discuss the work of their law firm. See Moss v.
Commissioner, supra at 212. The Court of Appeals stated that
even if “it was necessary for Moss’s firm to meet daily to
coordinate the work of the firm” and even if “lunch was the most
convenient time”, “it does not follow that the expense of the
lunch was a necessary business expense.” Id. at 213. Indeed,
- 15 -
“to allow a deduction for all business-related meals would confer
a windfall on people who can arrange their work schedules so they
do some of their work at lunch.” Id. at 212. We find Moss
directly on point; its facts are analogous and its reasoning is
persuasive. We reach the same result here.
“Daily meals are an inherently personal expense, and a
taxpayer bears a heavy burden in proving they are routinely
deductible.” Moss v. Commissioner, 80 T.C. at 1078. “[A]lthough
taxpayers may find it necessary to eat meals away from their
personal residences because of the exigencies of their
businesses, this circumstance, alone, will not ordinarily provide
a basis for the deduction of the cost of these meals.” Coombs v.
Commissioner, 608 F.2d 1269, 1272 (9th Cir. 1979), affg. on this
issue 67 T.C. 426 (1976) and affg. Cox v. United States, 42 AFTR
2d 78-5373, 78-2 USTC par. 9572 (D. Nev. 1978). Petitioner has
failed to satisfy his burden of proof. We deny petitioner’s
$2,163 deduction for meal and entertainment expenses.
B. 2005
Petitioner offers no evidence for 2005 comparable to that he
offered for 2004. At trial, petitioner acknowledged that he had
not “had enough time to prepare” “the 2005 case” and that he
hoped for “extra time”. We interpreted that as a motion to
continue, and respondent objected. Petitioner acknowledged that
he could have asked the Court to try the 2005 case at a later
date, but said that, because respondent’s counsel had objected to
certain exhibits that he had wanted to include in the stipulation
- 16 -
of facts, petitioner had “decided to proceed” with trial rather
than pursue “any of the other options available”. We then denied
the motion to continue and granted respondent’s motion to
consolidate the two cases.
At trial, we warned petitioner: “I caution you, there is
not * * * any evidence that you made any of the expenditures for
2005 * * *. There is no evidence that any specific expenditure
was made.” We asked: “Is there anything further you want the
Court to consider?” He replied: “I believe I have presented my
case, sir.”
On brief, petitioner states:
(1) I was unemployed for 9 months of the tax year
2005.
(2) I spent one entire year trying to resolve the
issues re: 2004 tax year. All my attempts to resolve
have proven futile.
(3) I have no desire to prolong this examination of my
2005 tax filing, and do not wish to repeat the prior
year’s attempts at resolution.
We take petitioner’s statements at trial and on brief as a
concession that in 2005 he was not entitled to an employee
business expense deduction of $21,682. We so find.
III. Conclusion
Petitioners ask us to consider their economic hardship. We
are not a court of equity, however. See Paxman v. Commissioner,
50 T.C. 567, 576 (1968) (“[N]ot only is the Tax Court not a court
of equity but * * * petitioners, in effect, are asking us to
legislate changes in the statute as enacted by Congress”.), affd.
- 17 -
414 F.2d 265 (10th Cir. 1969). We sustain the deficiencies of
$2,411 and $2,385 that respondent determined for 2004 and 2005.
Decisions will be entered
for respondent.