Barnes v. Comm'r , 93 T.C.M. 1310 ( 2007 )

T.C. Memo. 2007-141
UNITED STATES TAX COURT
KIM H. BARNES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8025-06. Filed June 4, 2007.
Kim H. Barnes, pro se.
Melinda K. Fisher, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
HAINES, Judge: Respondent determined a deficiency in
petitioner’s 2002 Federal income tax of $1,953.1 The issues for
decision are: (1) Whether petitioner is entitled to an itemized
1
All section references are to the Internal Revenue Code,
as amended, and all Rule references are to the Tax Court Rules of
Practice and Procedure. Amounts are rounded to the nearest
dollar.
- 2 -
deduction for charitable contributions of money; (2) whether
petitioner is entitled to an itemized deduction for charitable
contributions of property other than money; and (3) whether
petitioner is entitled to a miscellaneous itemized deduction for
unreimbursed employee expenses.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time she filed her
petition, petitioner resided in Fort Washington, Maryland.
Respondent received petitioner’s 2002 Federal income tax
return on or about May 3, 2003. Petitioner reported total income
of $37,734, itemized deductions of $26,611, exemptions of $6,000,
taxable income of $5,123, tax of $513, a child tax credit of
$513, and total tax of zero. Petitioner’s itemized deductions
included, among other things: Charitable contributions of money
of $2,654; charitable contributions of property other than money
of $1,841; and unreimbursed employee expenses of $10,645, which
included $3,260 for a computer, $650 for books, $450 for
supplies, and $6,285 for attorney’s fees. Petitioner reported
total payments of $137, which included withholding of $50 and an
additional child tax credit of $87, and requested a refund of
$137.
- 3 -
On January 27, 2006, respondent issued petitioner a notice
of deficiency for 2002. Respondent disallowed petitioner’s
claimed itemized deductions for the charitable contributions and
the unreimbursed employee expenses.2 On the basis of the
disallowance, respondent determined a deficiency in petitioner’s
2002 Federal income tax of $1,953.
In response to the notice of deficiency, petitioner filed a
petition with this Court on May 1, 2006. Contrary to the
requirements of Rule 34(b)(4), the petition did not contain clear
and concise statements of each and every error which petitioner
alleged to have been committed by respondent in the determination
of the deficiency. On May 16, 2006, respondent filed a motion to
dismiss for failure to state a claim upon which relief can be
granted. On May 19, 2006, the Court ordered petitioner to file
an amended petition setting forth with specificity each error
petitioner alleged respondent made in the determination of the
deficiency. On July 10, 2006, petitioner filed a 132-page
amended petition which consisted mainly of allegations of
conspiracy by government agencies and third parties not related
to this suit.
On August 16, 2006, the Court heard arguments on
respondent’s motion to dismiss for failure to state a claim.
2
Respondent also increased petitioner’s child tax credit
from $513 to $600 but reduced the additional child tax credit
from $87 to zero. Petitioner has not disputed this change.
- 4 -
Respondent conceded that, while most of the material in
petitioner’s amended petition was irrelevant, the following three
sentences could be construed as stating a claim upon which relief
could be granted:
On December 15, 2005, or thereabout Barnes had received
a second Notice of Tax Deficiency from the IRS. It
disputed Barnes Tax Filings for Tax Year 2002.
* * * * * * *
All documents, receipts, and related paperwork deemed
necessary to substantiate reasonable deductions taken
by Mr. Edwards [petitioner’s tax return preparer] on
Barnes’ taxes had been provided to Joe Edwards.
After the hearing, the Court denied respondent’s motion and
struck all but the above three sentences from petitioner’s
amended petition. This case was tried in Washington, D.C., on
March 26, 2007.
OPINION
Section 161 provides for itemized deductions in computing
taxable income. However, deductions are a matter of legislative
grace, and a taxpayer bears the burden of proving that she is
entitled to the deductions.3 See INDOPCO Inc. v. Commissioner,
503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292
3
Under sec. 7491(a)(1), if the taxpayer introduces
credible evidence with respect to any factual issue relevant to
the taxpayer’s liability for tax, the burden of proof shall shift
to the Commissioner. The burden of proof does not shift to
respondent because petitioner did not maintain adequate records.
See sec. 7491(a)(2).
- 5 -
U.S. 435, 440 (1934); see also Rule 142(a). The taxpayer has the
burden of substantiating any deduction. Hradesky v.
Commissioner, 65 T.C. 87, 89-90 (1975), affd. per curiam 540 F.2d
821 (5th Cir. 1976); see also Rule 142(a).
Section 170 allows an itemized deduction for charitable
contributions. Petitioner claimed an itemized deduction for
charitable contributions of money of $2,654. See sec. 1.170A-
13(a), Income Tax Regs. At trial, petitioner substantiated
charitable contributions of money of $320, which included
contributions of $225 to educational institutions and $95 to her
church. Petitioner testified that she did not have additional
documentation to substantiate the remaining $2,334. Petitioner
alleged that her documents were destroyed because of flooding in
her basement. Petitioner testified that “the big flood” occurred
in 2001. Presumably, any documentation that would substantiate
charitable contributions made during 2002 would not be in
existence in 2001. Additionally, there is no indication
petitioner tried to obtain any reliable written records to
reconstruct the alleged charitable contributions of money. See
sec. 1.170A-13(a)(1)(iii), Income Tax Regs. Because petitioner
failed to substantiate $2,334 of the claimed charitable
contributions of money, we hold that petitioner is entitled to an
itemized deduction of only $320 for charitable contributions of
money.
- 6 -
Petitioner also claimed an itemized deduction for charitable
contributions of property other than money of $1,841. See sec.
1.170A-13(b), Income Tax Regs. To substantiate the deduction,
petitioner introduced into evidence receipts allegedly issued by
the Purple Heart Service Foundation (the foundation), indicating
petitioner donated various items of furniture to the foundation
during 2002. While the receipts indicate various contribution
dates in 2002, the form for the receipts indicates a form
revision date of February 2004. Petitioner explained that she
lost the original receipts in the basement flood, and she went
back to the foundation to obtain new receipts. Petitioner
testified that she told someone at the foundation what she
donated, and the person at the foundation filled in the receipts
according to what petitioner said. Petitioner could not explain
how she determined the dates of contribution shown on the
receipts and even testified that some of the donations were made
in 2001. We do not find the receipts to be reliable, as the
person at the foundation simply put down the items petitioner
told him to and the dates bear no relationship to when the
alleged contributions were made. See sec. 1.170A-13(b)(1) and
(2), Income Tax Regs. We hold that petitioner is not entitled to
an itemized deduction for charitable contributions of property
other than money.
- 7 -
Petitioner claimed a miscellaneous itemized deduction for
unreimbursed employee expenses of $10,645, which included $3,260
for a computer, $650 for books, $450 for supplies, and $6,285 for
attorney’s fees.4 Petitioner failed to introduce any evidence
regarding the alleged expenses for books, supplies, or attorney’s
fees. Petitioner testified that she was sure she had supporting
documents somewhere but did not bring them to trial. Regarding
the alleged unreimbursed employee expense for the computer, a
receipt for a computer and related equipment was introduced into
evidence. However, the receipt indicated a date of August 20,
2001. Petitioner failed to prove that she incurred unreimbursed
employee expenses during 2002. Therefore, we hold that
petitioner is not entitled to a miscellaneous itemized deduction
for unreimbursed employee expenses.
In reaching our holdings, we have considered all arguments
made, and, to the extent not mentioned above, we conclude that
they are moot, irrelevant, or without merit.
To reflect the foregoing,
Decision will be
entered under Rule 155.
4
At trial, petitioner alleged respondent conceded she was
entitled to deduct the attorney’s fees. There is no evidence in
the record that supports petitioner’s allegation, and we find
respondent did not concede the matter.