T.C. Summary Opinion 2011-47
UNITED STATES TAX COURT
MARC ROBERT GITTENS, SR., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 28121-09S. Filed April 7, 2011.
Marc Robert Gittens, Sr., pro se.
Steven N. Balahtsis, for respondent.
SWIFT, Judge: This case was heard pursuant to the
provisions of section 7463 of the Internal Revenue Code in effect
when the petition was filed.1 Pursuant to section 7463(b), the
decision to be entered is not reviewable by any other court, and
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for 2006, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
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this opinion shall not be treated as precedent for any other
case.
Respondent determined an $8,594 deficiency in petitioner’s
2006 Federal income tax. After settlement of a number of
adjustments, we must decide whether petitioner can deduct $19,304
in claimed business expenses under section 162 and $2,552 in
claimed tuition expenses under section 222.
Background
At the time his petition was filed, petitioner resided in
New York.
During 2006 petitioner was employed full time for Tanenbaum
Harber Co., Inc. (Tanenbaum), as a building facility manager and
part time for Pan American Investigation Services (Pan American)
as a security guard. Petitioner earned from Tanenbaum total
wages of $41,498 and from Pan American total wages of $3,497.
Also during 2006 petitioner had a part-time side activity
as a handyman which he conducted from his home. During this time
petitioner was enrolled as a part-time student at Herbert H.
Lehman College in the Bronx, New York.
In 2006 petitioner owned one vehicle and used that vehicle
both for his handyman activity and for personal travel.
Petitioner maintained one bank account for his personal use and
also for his handyman activity.
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On a Schedule C, Profit or Loss From Business, attached to
his 2006 Federal income tax return, petitioner reported total
income from his handyman activity of $1,000 and no income from
what petitioner refers to as a real estate activity.
On the Schedule C petitioner also claimed the following
business expense deductions relating to his handyman and real
estate activities:
Advertising $120
Car & truck 9,988
Depreciation 1,991
Legal & professional 120
Rental 210
Supplies 342
Meals & entertainment 1,000
Miscellaneous other:
Bank fees 2,700
Bus. cards 60
Education 225
Internet 618
Domain 140
Dues 350
Cell phone 1,440
Total 19,304
On audit respondent disallowed for lack of substantiation
the above $19,304 in business expenses and $4,000 in tuition
expenses that were deducted on petitioner’s 2006 Federal income
tax return. Respondent now concedes that petitioner is entitled
to deduct $1,448 of the claimed $4,000 tuition expenses, subject
to the adjusted gross income limitation of section 222.
At the December 2, 2010, trial herein petitioner admitted
and we so find: (1) That in 2006 petitioner did not engage in a
real estate business; and (2) that the tools with respect to
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which petitioner claimed depreciation were acquired for personal
use.
Discussion
Petitioner bears the burden of establishing his entitlement
to deduct the claimed business expenses and tuition expenses in
dispute. See Rule 142(a).
Section 162 permits deductions for ordinary and necessary
business expenses, but taxpayers are required to maintain books,
records, and other substantiating documentation relating to the
claimed expenses. Sec. 6001.
For courts to allow business expenses or make estimates of
allowable expenses under Cohan v. Commissioner, 39 F.2d 540, 543-
544 (2d Cir. 1930),2 there must be some basis for reasonable
estimates to be made. Williams v. United States, 245 F.2d 559,
560 (5th Cir. 1957) (“there [must] be sufficient evidence * * *
that at least the amount allowed in the estimate was in fact
spent or incurred for the stated purpose.”); see also Vanicek v.
Commissioner, 85 T.C. 731, 742-743 (1985).
2
We note that many of the expenses petitioner deducted are
not susceptible of estimation under Cohan v. Commissioner, 39
F.2d 540 (2d Cir. 1930), but rather must be substantiated
pursuant to sec. 274(d). Such expenses include petitioner’s car
and truck, meals and entertainment, and cell phone expenses. For
the reasons discussed infra--namely that petitioner has failed to
produce any reasonable substantiation for his claimed deductions
--this distinction is immaterial.
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Petitioner has not produced any books, records, receipts,
client invoices, canceled checks, or other documentation to
substantiate credibly any aspect of the expenses in dispute--
their actual cost, their estimated cost, or their purpose.3
Further, petitioner did not call any witnesses to corroborate the
claimed expenses.
Conclusion
We conclude that petitioner is not entitled to any of the
claimed business expense deductions in dispute and that
petitioner is entitled to deduct only $1,448 of the claimed
tuition expenses subject to the adjusted gross income limitation
of section 222(b)(2)(B).
Decision will be entered
under Rule 155.
3
For example, petitioner did not identify the clubs or
organizations to which he allegedly paid membership fees. For
the cell phone he and his children used, petitioner provided some
monthly AT&T billing statements for periods in later years, but
petitioner provided no statements for 2006.