Bridgett Jeanette Bell v. Commissioner , 2013 T.C. Summary Opinion 20 ( 2013 )

PURSUANT TO INTERNAL REVENUE CODE
SECTION 7463(b),THIS OPINION MAY NOT
BE TREATED AS PRECEDENT FOR ANY
OTHER CASE.
T.C. Summary Opinion 2013-20
UNITED STATES TAX COURT
BRIDGETT JEANETTE BELL, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13948-11S. Filed March 4, 2013.
Bridgett Jeanette Bell, pro se.
James H. Brunson III and David Delduco, for respondent.
SUMMARY OPINION
MARVEL, Judge: This case was heard pursuant to the provisions of section
74631 of the Internal Revenue Code in effect when the petition was filed. Pursuant
1
Unless otherwise indicated, all section references are to the Internal Revenue
Code, as amended and in effect for the year in issue, and all Rule references are to
(continued...)
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to section 7463(b), the decision to be entered is not reviewable by any other court,
and this opinion shall not be treated as precedent for any other case.
In a notice of deficiency dated March 11, 2011, respondent determined a
deficiency in petitioner’s 2006 Federal income tax of $6,017 and an accuracy-
related penalty under section 6662(a) of $1,203. The issues for decision are: (1)
whether petitioner is entitled to the noncash charitable contribution deduction she
claimed on her Schedule A, Itemized Deductions; and (2) whether petitioner is
liable for the accuracy-related penalty.
Background
Some of the facts have been stipulated and are so found. The stipulation of
facts is incorporated herein by this reference. Petitioner resided in Georgia when
she filed her petition.
Petitioner’s Background
Petitioner holds both a bachelor’s degree in business management and a
master’s degree in management. She is a licensed certified public accountant
(C.P.A.). For the past 15 years she has taught college-level business and accounting
classes. During 2006 she taught accounting and business courses at Atlanta
1
(...continued)
the Tax Court Rules of Practice and Procedure. Some monetary amounts have been
rounded to the nearest dollar.
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Metropolitan College and also taught some classes at the University of Phoenix and
Western International University.
Although petitioner resided in Georgia during the year in issue, she also
owned property in Houston, Texas (Houston property). Her brother, Robert Bell,
rented the Houston property from her during 2006. Petitioner’s mother, Jennie Bell,
also resided in the Houston area during 2006.
Holistic Opportunities for Mental Empowerment
In 2001 petitioner (and others) established and caused to be incorporated
Holistic Opportunities for Mental Empowerment (HOME). HOME provided adult
basic literacy classes in Texas. At all relevant times HOME qualified as an
organization described in section 501(c)(3) and was listed as an organization
eligible to receive tax-deductible charitable contributions in Internal Revenue
Service (IRS) Publication 78, Cumulative List of Organizations described in Section
170(c) of the Internal Revenue Code of 1986. HOME did not file a Form 990,
Return of Organization Exempt From Income Tax, for 2006. In 2010 the IRS
revoked HOME’s Federal tax-exempt status for failure to file a Form 990 for three
consecutive years.
During 2006 petitioner served as the president of HOME and as president of
HOME’s board of directors. HOME’s board of directors comprised petitioner,
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Terence Freeman, Poat Givens, Byron Riley, and Tiffany Taylor. Petitioner
attended several HOME board meetings during 2006.
HOME operated its literacy program at the facilities of Good Shepherd
Church (Good Shepherd) in Houston, Texas. HOME had no paid employees and
relied on volunteers to teach the classes. Both petitioner and Mr. Bell taught
literacy classes at Good Shepherd.
Petitioner’s Tax Reporting and the Notice of Deficiency
Petitioner untimely filed a Form 1040, U.S. Individual Income Tax Return,
for 2006, which she signed on October 13, 2008. On her Form 1040 petitioner
reported that she had adjusted gross income of $91,491 and taxable income of
$18,569. She attached a Schedule A on which she claimed a deduction for
charitable contributions totaling $45,746. On an attached Form 8283, Noncash
Charitable Contributions, she reported noncash charitable contributions to HOME of
land2 and building materials valued at $4,236 and $24,662, respectively. Petitioner
signed Part IV, Donee Acknowledgment, on behalf of HOME in her capacity as its
president. The acknowledgment is dated October 13, 2008.
2
On the Form 8283 petitioner reported that she acquired the land in August
2006 and contributed the land to HOME on August 1, 2006.
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Respondent subsequently mailed to petitioner the notice of deficiency in
which respondent disallowed the entire amount of petitioner’s claimed noncash
charitable contribution deduction.
Petitioner’s Alleged Noncash Contributions to HOME in 2006
In August 2006 petitioner purchased several properties in Liberty, Texas
(Liberty properties). All but one of the properties were unimproved. A mobile
home was on one of the properties. At some point petitioner prepared several
warranty deeds conveying the properties and the mobile home to HOME. The
deeds are dated August 24, 2006. All of the deeds bear petitioner’s signature and
contain a statement that they were “[s]igned, sealed and delivered in the presence
of” petitioner. All of the deeds bear notarizations dated April 28, 2010, reflecting
that petitioner appeared on that date and acknowledged executing the deeds.
Petitioner alleges that she delivered the executed deeds to HOME in 2006, and she
introduced unsigned and undated board meeting minutes that purport to confirm
delivery of the deeds to HOME in 2006.
During 2006 petitioner paid various expenses purportedly on behalf of
HOME, including expenses that she claimed were for hosting board meetings,
luncheons, and other celebrations for both board members and volunteers. Some of
the expenses were for travel between: (1) various locations in and around Houston,
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Texas; (2) Atlanta, Georgia, and Houston, Texas; and (3) Atlanta, Georgia, and
New Orleans, Louisiana. Petitioner classified all of these purported expenses as
“building materials” on her 2006 return and deducted them as noncash charitable
contributions.
At trial petitioner introduced copies of various deeds, receipts, and invoices
and two summary logs which she prepared sometime after the examination of her
2006 return began and a travel log,3 in an effort to substantiate the noncash
charitable contribution deduction she claimed. Except as noted herein, petitioner
has not sustained her burden of proving that the documentation she introduced into
evidence is credible, and she has not convinced us that her alleged noncash
contributions were made or, if made, were paid primarily for charitable purposes.
Discussion
I. Burden of Proof
In general, the Commissioner’s determination of a deficiency is presumed
correct, and the taxpayer bears the burden of proving otherwise. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). The burden of proof, however, may
shift to the Commissioner under section 7491(a)(1) if certain requirements are met.
3
Petitioner claimed that she prepared the travel log during respondent’s
examination using Excel spreadsheets that she had prepared during 2006.
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See sec. 7491(a)(1) and (2); see also Higbee v. Commissioner, 116 T.C. 438, 440-
441 (2001).
Petitioner does not contend that section 7491(a)(1) applies, and the record
does not establish that she satisfied the section 7491(a)(2) requirements.
Accordingly, petitioner bears the burden of proving that respondent’s determinations
are erroneous.
II. Charitable Contribution Deduction
A. In General
Deductions are a matter of legislative grace, and a taxpayer ordinarily must
prove that she is entitled to a claimed deduction. INDOPCO, Inc. v. Commissioner,
503 U.S. 79, 84 (1992). A taxpayer is required to maintain records to substantiate
claimed deductions and to establish her correct tax liability. Higbee v.
Commissioner, 116 T.C. 440; see also sec. 6001. The taxpayer must produce
those records upon the request of the Secretary. Sec. 7602(a); see also sec. 1.6001-
1(e), Income Tax Regs. Substantiation is generally adequate if it establishes the
amount and purpose of the claimed deduction. Higbee v. Commissioner, 116 T.C.
440; see also Hradesky v. Commissioner, 65 T.C. 87 (1975), aff’d per curiam, 540
F.2d 821 (5th Cir. 1976).
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Ordinarily, a taxpayer may deduct charitable contributions made during the
taxable year. Sec. 170(a). Charitable contributions, however, may be deducted only
to “the extent that the aggregate of such contributions does not exceed 50 percent of
the taxpayer’s contribution base for the taxable year.” Sec. 170(b)(1)(A). A
charitable contribution deduction is allowed only if verified under regulations
promulgated by the Secretary. Sec. 170(a)(1). A taxpayer who deducts charitable
contributions must maintain adequate documentation to substantiate them. See sec.
1.170A-13(a)(1), Income Tax Regs.
B. Petitioner’s Alleged Noncash Charitable Contributions
On her 2006 return petitioner deducted noncash charitable contributions to
HOME of land and building materials valued at $4,236 and $24,662, respectively.
Petitioner signed the attached Form 8283 in her capacity as president of HOME,
acknowledging her contribution of land valued at $4,236 and building materials
valued at $24,662.4
4
Petitioner also introduced a written acknowledgment she prepared dated
December 23, 2006, certifying that in 2006 she contributed to HOME land valued at
$4,236, building materials valued at $18,485, and travel, meals, and entertainment
expenses valued at $7,146. Although the acknowledgment contains a statement
below petitioner’s signature as donor that HOME “accepts the services/property
indicated above”, the statement is not signed on behalf of HOME.
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In addition to various deeds, invoices, and receipts, petitioner introduced two
itemized logs purporting to show her noncash charitable contributions for 2006,
including the date of each contribution, the amount of the contribution, and the
purpose of the contribution. The logs were not prepared or maintained
contemporaneously; rather, petitioner created the logs ostensibly to summarize the
documentation she maintained to substantiate her 2006 contributions. On the logs
petitioner identified certain items as building materials or property expenses. Both
logs purport to show that she purchased building materials and paid property
expenses of $18,555, including a $15,000 payment to a subcontractor for work at a
property in Cleveland, Texas (Cleveland property),5 a $100 payment to an architect,
5
On April 18, 2011, this Court issued an opinion with respect to petitioner’s
2004 taxable year. Bell v. Commissioner, T.C. Summary Opinion 2011-54.
Pursuant to Fed. R. Evid. 201, we take judicial notice of this Court’s opinion. In
Bell this Court found that petitioner acquired the Cleveland property in 1999. Id.
Petitioner contended that she donated the Cleveland property to HOME during 2004
and was entitled to a charitable contribution deduction with respect to the Cleveland
property for 2004. Id. This Court found that petitioner was not entitled to a
charitable contribution deduction with respect to the Cleveland property because she
failed to introduce sufficient evidence to show that she transferred the property to
HOME during 2004. Id. In particular, the Court noted that petitioner listed her
mother as the owner of the Cleveland property on multiple documents prepared
months after the purported delivery of the Cleveland property. While we do not rely
on the findings in Bell to support our holding in this opinion, the Court’s findings in
Bell raise significant questions regarding whether HOME owned the Cleveland
property and used the Cleveland property in pursuit of its charitable mission during
the year at issue. In the absence of testimony or other evidence to support a finding
(continued...)
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$607 for property taxes, and $2,847 for the contribution of various physical building
materials. The logs also purport to show that petitioner paid for airline tickets,
airport parking, gas, and rental cars, totaling $5,427, and for meal and entertainment
expenses, including expenses attributable to board meetings and various celebrations
for volunteers and students, totaling $1,397.
Petitioner also claims that she made additional contributions to HOME as
follows: (1) books and a cassette tape valued at $31 and $8, respectively; (2) a $36
payment she purportedly made on behalf of HOME for rental of a post office box;
and (3) a $20 fee she paid to attend a conference on behalf of HOME.
Petitioner’s claimed noncash charitable contribution deduction consisted of
both contributions of property and various cash payments that she asserts
5
(...continued)
that HOME owned the Cleveland property and planned to use the refurbished
Cleveland property for charitable purposes, we cannot find that the subcontractor
payment, described infra pp. 24-25, the architect payment, described infra pp. 25-
26, or the property taxes, described infra pp. 26-27 were directly connected with
and solely attributable to petitioner’s rendition of services to HOME. See Van
Dusen v. Commissioner, 136 T.C. 515, 525 (2011).
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were unreimbursed volunteer expenses.6 Because the recordkeeping requirements
for the contribution of property differ from the recordkeeping requirements for
unreimbursed volunteer expenses, see Van Dusen v. Commissioner, 136 T.C. 515,
530-532 (2011), we first will address whether petitioner satisfied the recordkeeping
requirements with respect to her reported property contributions as follows: (1)
$4,236 for the Liberty properties; and (2) $2,847 for various building materials. We
then will address whether petitioner satisfied the recordkeeping requirements with
respect to her reported unreimbursed volunteer expenses as follows: (1) $15,000 for
the subcontractor payment; (2) $100 for the architect payment; (3) $607 for her
payment of property taxes; (4) $5,427 for travel expenses; (5) $1,397 for meal and
entertainment expenses; (6) $36 for rental of the post office box; (7) $20 for the
conference fee; and (8) $31 and $8 for the purchase of books and the cassette tape,
respectively.
6
Petitioner’s itemized logs also show a number of purported noncash
charitable contributions to Youth Under Construction (YUC). Both logs show that
petitioner made noncash contributions of $125 to YUC, consisting solely of
unreimbursed expenditures. Petitioner did not report any noncash contributions to
YUC on her Form 8283 for 2006. It is unclear whether she included these
contributions to YUC in her calculation of noncash contributions to HOME in
preparing her 2006 return. Regardless, she has introduced no evidence to show that
YUC was a charitable organization. Accordingly, petitioner is not entitled to a
deduction for noncash contributions to YUC.
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1. Contributions of Real Estate and Building Materials
For any charitable contribution of $250 or more, the taxpayer must obtain a
contemporaneous written acknowledgment from the donee. Sec. 170(f)(8)(A).
Section 170(f)(8)(B) provides that the contemporaneous written acknowledgment
must include the following:
(B) Content of acknowledgment.--An acknowledgment meets the
requirements of this subparagraph if it includes the following
information:
(i) The amount of cash and a description (but not value) of
any property other than cash contributed.
(ii) Whether the donee organization provided any goods or
services in consideration, in whole or in part, for any property
described in clause (i).
(iii) A description and good faith estimate of the value of
any goods or services referred to in clause (ii) or, if such goods or
services consist solely of intangible religious benefits, a statement
to that effect.
Section 170(f)(8)(C) provides that a written acknowledgment is contemporaneous
when the taxpayer obtains it on or before the earlier of: (1) the date the taxpayer
files a return for the year of contribution; or (2) the due date, including extensions,
for filing that return.
The only written acknowledgment from HOME that petitioner introduced to
satisfy the section 170(f)(8) requirement was the acknowledgment on the Form 8283
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attached to her 2006 return. Petitioner signed part IV of the Form 8283, titled
“Donee Acknowledgment”, as president of HOME. The only contributions
identified on the Form 8283 to which the acknowledgment relates are land purchased
in August 2006 at a cost of $4,236 and building materials with an appraised fair
market value (equal to petitioner’s alleged cost) of $24,662.
In addition to the written acknowledgment requirement, the regulations
establish a three-tier recordkeeping system for contributions of property other than
money. For a noncash contribution of $500 or less, the taxpayer must substantiate
the contribution with a receipt from the donee indicating the donee’s name, the date
and location of the contribution, and “[a] description of the property in detail
reasonably sufficient under the circumstances.” Sec. 1.170A-13(b)(1), Income Tax
Regs. If the taxpayer makes a charitable contribution of property other than money
and claims a deduction in excess of $500, the taxpayer must maintain written records
showing the manner of acquisition of the item, the approximate date of acquisition,
and the cost or adjusted basis of the property. Sec. 1.170A-13(b)(3), Income Tax
Regs.; see also Lattin v. Commissioner, T.C. Memo. 1995-233. Lastly, if the
noncash contribution deduction exceeds $5,000, the taxpayer must (1) obtain a
qualified appraisal for the contributed property, (2) attach a fully completed appraisal
summary (i.e., a Form 8283) to the tax return on which the deduction is claimed, and
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(3) maintain records pertaining to the claimed deduction in accordance with
section 1.170A-13(b)(2)(ii), Income Tax Regs. See sec. 1.170A-13(c)(2),
Income Tax Regs.
a. Liberty Properties
In addition to the other requirements related to noncash charitable
contributions, a donor claiming to have made a gift of property must establish that
legal title to the gift has been irrevocably transferred from the donor to the donee.
See Guest v. Commissioner, 77 T.C. 9, 15-16 (1981); Weil v. Commissioner, 31
B.T.A. 899, 906 (1934), aff’d, 82 F.2d 561 (5th Cir. 1936). If the gift is an interest
in real property, the transfer of legal title generally is evidenced by a deed or the
equivalent of a deed. If the gift is made between related parties, then the transaction
warrants close scrutiny. See Kimbell v. United States, 371 F.3d 257, 265 (5th Cir.
2004); Estate of Bongard v. Commissioner, 124 T.C. 95, 123 (2005).
Whether a taxpayer owns an interest in, or exercises a right with respect to,
property is determined under State law. See Aquilino v. United States, 363 U.S. 509
(1960). Accordingly, Texas law controls whether petitioner transferred title of the
Liberty properties to HOME in 2006. See United States v. Nat’l Bank of
Commerce, 472 U.S. 713, 722 (1985).
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Under Texas law, conveyance by deed requires delivery of the deed. See Tex.
Prop. Code Ann. sec. 5.021 (West 2004); Noell v. Crow-Billingsley Air Park Ltd.
P’ship, 233 S.W.3d 408, 415 (Tex. App. 2007). A grantor effectively delivers a
deed if she places the deed within the control of the grantee with the intention that
the instrument become operative as a conveyance. Noell, 233 S.W.3d at 415.
Whether a deed was delivered is controlled by the intent of the grantor and is
determined by examining all the facts and circumstances preceding, attending, and
following the execution of the instrument. Id. If a grantor delivers a deed, the deed
is binding even if neither party records it. See Tex. Prop. Code Ann. sec. 13.001(b)
(West 2004). “Without evidence to the contrary, the law presumes a grantor delivers
a deed on the date of execution and acknowledgment.” Burgess v. Easley, 893
S.W.2d. 87, 90 (Tex. App. 1994).
Respondent contends that petitioner has failed to establish that she conveyed
legal title of the Liberty properties to HOME during 2006. Respondent also
contends that petitioner has failed to produce a contemporaneous written
acknowledgment with respect to the Liberty properties.
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The record contains a copy of a receipt from the Liberty County Sheriff’s
Department showing that petitioner purchased several properties for $4,236.7 The
record also contains copies of warranty deeds, one for each of the properties
petitioner purportedly donated to HOME, signed by petitioner and dated August 24,
2006. However, the deeds were not notarized until 2010, and the notarizations
reflect that petitioner appeared in 2010 and acknowledged in the notary’s presence
that she signed the deeds.
Although petitioner testified that she signed the deeds in 2006, her testimony
appears to conflict with the notarizations. More importantly, the notarizations
confirm that the deeds were still in petitioner’s possession in 2010. Because
petitioner was on both sides of the alleged contribution transactions, in order for us
to find that she actually delivered the deeds to HOME in 2006, she must show by a
preponderance of credible evidence that she released physical possession, custody,
and control over the deeds and actually gave the deeds to HOME in 2006. Absent
that proof, there was nothing to prevent petitioner from destroying the deeds and
reasserting her ownership over the properties if and when her self-interest dictated
she do so.
7
The date on the receipt from the Liberty County Sheriff’s Department is
illegible.
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The timing of the notarizations is troublesome given that HOME’s tax-exempt
status was revoked in 2010. The lack of any independent third-party verification of
the actual delivery of the deeds to HOME is also troublesome given that petitioner
executed all the relevant documentation with respect to the purported gift of the
properties to HOME as both the donor and the authorized representative of HOME.
Under such circumstances, at a minimum, adequate and credible substantiation of a
charitable contribution of property would seem to require verification of the
contribution by an independent third party, or at least by someone other than the
donor who could testify that HOME actually received the deeds and accepted the
contributions.
Although petitioner offered minutes of a board meeting purportedly held on
October 23, 2006, as evidence that HOME acknowledged and accepted her
contribution of the Liberty properties, the minutes apparently were prepared by her,
are not signed or dated, and do not contain any information as to when they were
prepared. We do not find this documentation credible in the absence of verification
from a third party acting on behalf of HOME who can confirm personally that
someone other than petitioner accepted delivery of the deeds on behalf of HOME.
While this conclusion may seem harsh, it becomes less so when we consider
the other evidence in the record. Petitioner, a C.P.A. and a professor of accounting,
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failed to timely file her 2006 return. As president of HOME, petitioner failed to
ensure that HOME timely filed Forms 990 for multiple years, including 2006.
Petitioner asks us to believe that she would take the time to arrange for the
preparation of and/or prepare the deeds and board meeting minutes to document her
charitable contributions while, during the same timeframe, she failed to file her
Federal income tax return and the Form 990 on behalf of HOME. We simply cannot
do so given the complete lack of any verification of the contributions by a third party.
See Tokarski v. Commissioner, 87 T.C. 74, 77 (1986) (the Court is not required to
accept unverified testimony).
Because petitioner has failed to convince us that she actually delivered the
deeds conveying the Liberty properties to HOME in 2006, we sustain respondent’s
determination disallowing the charitable contribution deduction she claimed with
respect to the Liberty properties on her 2006 return.
b. Building Materials
On her 2006 return petitioner claimed a noncash charitable contribution
deduction for building materials of $24,662. Petitioner’s records, however, reveal
that petitioner included in this $24,662 amount a variety of expenditures for items
that were not building materials. Petitioner nevertheless claims that she paid for and
contributed a variety of items in 2006 for the benefit of HOME and that those items
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are deductible as charitable contributions. We start with petitioner’s claim regarding
her contribution of building materials.
The evidence shows purchases of building materials of $2,847 during 2006,
so we evaluate whether petitioner has substantiated that: (1) she purchased the
materials; and (2) she contributed the materials to HOME in 2006. Because her
contribution of building materials exceeds $500 but does not exceed $5,000,
petitioner must introduce a contemporaneous written acknowledgment from
HOME as well as written records showing the manner of acquisition, the
approximate date of acquisition, and the cost or adjusted basis of the building
materials. See sec. 1.170A-13(b)(3), Income Tax Regs.; see also Lattin v.
Commissioner, T.C. Memo. 1995-233; sec. 1.170A-13(c)(1)(i), Income Tax Regs.
To substantiate her reported contributions petitioner introduced the
following:
• check registry receipts dated January 11, 2006, showing payments of
$120.81 and $994.32, respectively, to Montalbano Lumber Co., Inc.
(Montalbano Lumber);
• a check registry receipt dated January 18, 2006, showing a payment of
$148.93 to Montalbano Lumber;
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• invoices from Montalbano Lumber dated January 11, 2006, for $994.32
and $137.43;
• an incomplete invoice from Montalbano Lumber dated January 18,
2006;8
• an invoice from Montalbano Lumber dated January 30, 2006, for
$31.92;
• receipts from Lowe’s dated January 17 and 19, 2006, for $100.45 and
$8.12, respectively;
• a receipt from McCoy’s dated January 9, 2006, for $19.46;
• a receipt from Home Depot dated January 22, 2006, for $56.81;
• an illegible receipt from Home Depot purportedly for a purchase of
$96.20, along with a copy of petitioner’s Washington Mutual account
statement showing a purchase of $96.20 at Home Depot on November
27, 2006; and
• a receipt from a lumberyard dated January 18, 2006, for $504.
None of the invoices from Montalbano Lumber include any information
regarding the identity of the purchaser. Although the invoices are marked paid, with
8
The relevant invoice from Montalbano Lumber shows a handwritten total of
$648.93. A second page attached to this invoice shows that one item was returned,
eliminating $45.47 from the total purchase price.
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respect to the invoices for $31.92 and $137.43 and the incomplete invoice, petitioner
introduced no evidence to show that she actually purchased the materials or that she
made the purchases using her personal funds rather than HOME’s funds. The
lumberyard receipt does not show the name of the purchaser, the delivery address, or
any other identifying information.
Furthermore, petitioner purchased most of the building materials in January
2006, before her purchase and donation of the Liberty properties. While petitioner
testified that, in addition to donating building materials for the development of the
Liberty properties, she also donated building materials for construction work with
respect to another HOME property, she did not testify regarding the location or
ownership of the other property or the nature and purpose of the improvements.9
With respect to the building materials petitioner purchased after her alleged
contribution of the Liberty properties, we have found that she has not established that
she contributed the properties to HOME during 2006, and we reach the same
9
Petitioner’s records show that she had unreimbursed expenditures with
respect to the Cleveland property, purportedly owned by HOME. We note that
some of the Montalbano Lumber invoices appear to relate to the Cleveland property.
As we discussed supra note 5, petitioner has failed to show that HOME owned the
Cleveland property or that her expenses with respect to the Cleveland property were
directly connected with the performance of charitable work.
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conclusion with respect to the building materials allegedly purchased for those
properties.
Petitioner introduced no documents prepared by third parties acknowledging
her contributions, and she called no witnesses to corroborate her testimony.
Accordingly, we find that petitioner failed to introduce credible and adequate written
records to substantiate her contributions of the building materials to HOME during
2006, and consequently, we conclude that she is not entitled to the deduction she
claimed with respect to the building materials.
2. Unreimbursed Volunteer Expenses
No deduction is allowed under section 170 for a contribution of services.
However, “unreimbursed expenditures made incident to the rendition of services to
an organization contributions to which are deductible may constitute a deductible
contribution.” Sec. 1.170A-1(g), Income Tax Regs. To be deductible, unreimbursed
expenses must be directly connected with and solely attributable to the rendition of
services to a charitable organization. Van Dusen v. Commissioner, 136 T.C. 525;
Saltzman v. Commissioner, 54 T.C. 722, 724 (1970). “In applying this standard,
courts have considered whether the charitable work caused or necessitated the
taxpayer’s expenses.” Van Dusen v. Commissioner, 136 T.C. 525.
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Contributions through the payment of unreimbursed volunteer expenses of less
than $250 are subject to the requirements for contributions of money set forth in
section 1.170A-13(a), Income Tax Regs. Section 1.170A-13(a)(1), Income Tax
Regs., requires the taxpayer to maintain a canceled check or a receipt from the donee
organization. In the absence of a canceled check or a receipt from the donee
organization, the taxpayer must maintain other reliable written records showing “the
name of the payee, the date of the payment, and the amount of the payment.” Van
Dusen v. Commissioner, 136 T.C. 534; see also sec. 1.170A-13(a)(1), Income Tax
Regs.
To claim a charitable contribution deduction of $250 or more, the taxpayer
must substantiate the contribution with a contemporaneous written acknowledgment
from the donee organization. Sec. 170(f)(8)(A); sec. 1.170A-13(f)(1) and (2),
Income Tax Regs.; see supra pp. 12-14. A taxpayer who incurs unreimbursed
expenses “incident to the rendition of services” is deemed to have obtained such
acknowledgment if the taxpayer (1) has adequate records to substantiate the amount
of the expenditures and (2) obtains by a prescribed date a statement prepared by the
donee organization containing specified information. See sec. 1.170A-13(f)(10),
Income Tax Regs.; see also Van Dusen v. Commissioner, 136 T.C. 536.
Contributions of less than $250 to the same donee are not subject to these additional
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requirements even if the aggregate donations to the donee exceed $250 within the
same taxable year. See Van Dusen v. Commissioner, 136 T.C. 530 n.26; sec.
1.170A-13(f)(1), Income Tax Regs.
a. Subcontractor Payment
Petitioner claims that she paid for a subcontractor to perform work at the
Cleveland property. To substantiate the claimed contribution, petitioner introduced
a copy of her Chase account statement for February 11 through March 10, 2006.
The statement shows that on February 28, 2006, petitioner wrote a cash advance
check for $15,000. The statement includes a notation by petitioner indicating that
the $15,000 check was a cash advance to pay Thompson Foundation Repair on
behalf of HOME. She also introduced a copy of an invoice from Thompson
Foundation Repair dated March 21, 2006. The invoice shows that petitioner paid
$15,000 for work to be performed at the Cleveland property.
Petitioner did not introduce any credible evidence that HOME owned the
Cleveland property in 2006. Without that proof, there is no foundation for a
finding that petitioner’s payment to the subcontractor with respect to the Cleveland
property, purportedly for HOME’s exclusive use and benefit, was for charitable
purposes.
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Petitioner introduced no other evidence to show the ownership of the
Cleveland property or to show that HOME was using the property for charitable
purposes during 2006. She introduced no credible evidence to show how the
subcontractor’s repairs would further HOME’s mission of providing adult literacy
classes. The only acknowledgment by HOME of any contribution by petitioner in
the record identified only a contribution of the properties and the building and not
any payments to a subcontractor or for other expenses. Without such evidence, we
cannot find that the subcontractor expenses were directly connected with and solely
attributable to petitioner’s rendition of services to HOME or that HOME
acknowledged the contribution. See Van Dusen v. Commissioner, 136 T.C. 525.
Accordingly, petitioner is not entitled to a charitable contribution deduction of
$15,000 for the subcontractor payment. See supra note 5.
b. Architect Payment
In her itemized logs petitioner represented that she made a cash payment to an
architect for work on a building owned by HOME. Petitioner introduced a copy of
her Washington Mutual account statement for August 18 through September 20,
2006. The statement shows that on September 8, 2006, petitioner withdrew cash of
$101.50 from a bank in Cleveland, Texas. The statement includes a notation by
petitioner indicating that $100 in cash was a payment to an architect.
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Petitioner did not introduce a receipt, invoice, or acknowledgment from the
architect showing that she paid $100 on behalf of HOME. She did not testify
regarding the payment or the payee. Petitioner has failed to introduce records to
substantiate the identity of the payee. Accordingly, petitioner is not entitled to a
charitable contribution deduction of $100 for the purported architect payment.10 See
Van Dusen v. Commissioner, 136 T.C. 534.
c. Property Taxes
In her itemized logs petitioner also represented that she paid property taxes of
$607 with respect to the Cleveland property. Petitioner introduced a copy of a check
receipt showing payment of $607 to Liberty County. The check receipt bears a date
of January 30, 2006. Petitioner testified that she paid property taxes with respect to
the Liberty properties using funds in her personal checking account. She did not
testify regarding the payment of property taxes with respect to the Cleveland
property.
10
Furthermore, the record shows that the payment likely related to the
Cleveland property. As stated supra p. 25 and note 5, petitioner failed to introduce
sufficient evidence to show that expenditures related to the Cleveland property were
directly connected with and solely attributable to her rendition of services to
HOME. Accordingly, even if we found that petitioner introduced sufficient
evidence to substantiate the reported payment, she would not be entitled to deduct
this amount.
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Pursuant to rule 201 of the Federal Rules of Evidence, we take judicial notice
of the fact that the Cleveland property and the Liberty properties are in Liberty
County, Texas. The record shows that petitioner paid the property taxes with respect
to the Cleveland property. However, as stated supra p. 25 and note 9, petitioner
failed to introduce any credible evidence to show that HOME owned the Cleveland
property or that the expenditures related to the Cleveland property were directly
connected with and solely attributable to her rendition of services to HOME.
Accordingly, petitioner is not entitled to a charitable contribution deduction of $607
for the payment of property taxes.
d. Travel Expenses
A taxpayer may deduct “out-of-pocket transportation expenses necessarily
incurred in performing donated services”. Sec. 1.170A-1(g), Income Tax Regs.
However, section 170(j) provides that no deduction is allowed “for traveling
expenses (including amounts expended for meals and lodging) while away from
home, whether paid directly or by reimbursement, unless there is no significant
element of personal pleasure, recreation, or vacation in such travel.” As this Court
has stated: “[T]ravel expenditures which include a substantial, direct, personal
benefit * * * are not deductible.” Tafralian v. Commissioner, T.C. Memo. 1991-33;
- 28 -
see also Babilonia v. Commissioner, 681 F.2d 678, 679 (9th Cir. 1982) (holding that
when a contribution benefits both the taxpayer and the charitable organization,
the taxpayer’s primary purpose controls), aff’g T.C. Memo. 1980-207.11
Petitioner traveled to Houston multiple times during 2006. Although she
testified that she deducted only the travel expenditures related to trips to Houston
during which she was representing HOME the entire time, we do not find this self-
serving testimony credible, given the frequency and timing of the trips, the fact that
petitioner’s immediate family lived in the Houston area, and the complete lack of
testimony by any third party on behalf of HOME.
An examination of petitioner’s evidence supports our conclusion. To
substantiate her claimed travel expenditures, petitioner introduced her itemized logs,
11
Relevant legislative history supports our conclusion that the key inquiry is
focused on the extent and duration of the taxpayer’s charitable activities during the
trip:
In determining whether travel away from home involves a
significant element of personal pleasure, recreation, or vacation, the
fact that a taxpayer enjoys providing services to the charitable
organization will not lead to denial of the deduction. * * * [A] taxpayer
who only has nominal duties relating to the performance of services for
the charity, or who for significant portions of the trip is not required to
render services, is not allowed any charitable deduction for travel
costs.
H.R. Rept. No. 99-426, at 129 (1985), 1986-3 C.B. (Vol. 2) 1, 129.
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various receipts, and a travel itinerary for 2006. The logs purport to show that she
incurred travel expenses totaling $5,427. Petitioner also introduced various receipts
as follows:
• receipts for parking at the Atlanta airport for $40, $40, $50, and $90.
The dates on the receipts are illegible;12
• a receipt for parking at the Atlanta airport, dated March 13, 2006, for
$56;
• a receipt for parking at the Atlanta airport from June 10 through 12,
2006, for $30;
• a receipt for parking at the Birmingham International Airport from July
29 through August 3, 2006, for $42;
• a receipt for gas purchased at the Houston airport for $5. The date is
illegible;13
• receipts for gas purchased in Cleveland on May 13, 2006, in the
amounts of $1.02 and $41.35;
12
According to petitioner’s itemized logs, the receipts relate to the following
dates: (1) April 10, 2006, for $40; (2) October 2, 2006, for $40; (3) October 23,
2006, for $50; and (4) December 27, 2006, for $90.
13
According to petitioner’s itemized logs, she incurred this expense on May
10, 2006.
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• receipts showing that petitioner rented a car at the Houston airport as
follows: (1) for March 8 through 13, 2006, for $185.93; (2) for May 25
through 30, 2006, for $148.50; (3) for July 29 through August 3, 2006,
for $154.71; (4) for October 19 through 23, 2006, for $164.58; (5) for
November 9 through 13, 2006, for $148.56; and (6) for December 19
through 27, 2006, for $230.13;
• a confirmation for a flight on January 6, 2006, from Houston to Atlanta
to New Orleans for $122.60; and
• confirmations for round-trip flights between Atlanta and Houston as
follows: (1) for April 7 through 10, 2006, for $404.03; (2) for May 11
through 30, 2006, for $224.10; (3) for September 29 through October 2,
2006, for $420.90; (4) for October 19 through 23, 2006, for $214.10;
and (5) for November 23 through 27, 2006, for $271.71.
Petitioner also introduced two illegible receipts that purport to relate to her travel
expenses.14
14
Petitioner introduced a receipt that appears to show her rental of a car from
Enterprise Houston. The date and amount on the receipt are illegible. According to
petitioner’s itemized logs, this receipt relates to a $94.76 expense for overnight
travel that she incurred on May 11, 2006. The second receipt appears to show that
petitioner paid for parking at the Atlanta airport, but the date and amount on the
receipt are illegible. According to petitioner’s itemized logs, this receipt relates to a
(continued...)
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The record also contains a copy of a travel log purporting to show petitioner’s
activities with respect to HOME during 2006. According to the travel log petitioner
was in Houston performing HOME related duties during the following periods: (1)
January 3 through 6, 2006; (2) March 8 through 13, 2006; (3) March 25 through 27,
2006; (4) April 7 through 10, 2006; (5) May 10 through 30, 2006; (6) June 10
through 12, 2006; (7) June 30 through July 7, 2006; (8) July 29 through August 3,
2006; (9) September 8 through 11, 2006; (10) September 29 through October 2,
2006; (11) October 19 through 23, 2006; (12) November 9 through 13, 2006; (13)
November 23 through 27, 2006; and (14) December 8 through 9, 2006; and (15)
December 19 through 27, 2006.
There are several problems with petitioner’s travel log and activity log. First,
the travel log does not bear a date showing when petitioner created the log but bears
only a facsimile date of August 3, 2011. Petitioner testified that she prepared some
documents during the pendency of her audit. While petitioner testified that she
prepared the travel log from an Excel spreadsheet she maintained in 2006, she did
not introduce any credible evidence to support such a finding. We infer that the
14
(...continued)
$48 expense for overnight travel she incurred on November 13, 2006.
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travel log is not a contemporaneous recordation of petitioner’s activities with respect
to HOME.15
Second, petitioner included in her HOME-related activities some activities
that appear to be personal or recreational. For instance, petitioner included time
spent at worship services at Good Shepherd; in most instances, the worship services
were the only allegedly HOME-related activity petitioner participated in that day.
Additionally, petitioner’s activity log shows that she spent 4.5 hours reviewing
magazines and books for decorating ideas.
Third, while it is credible that petitioner participated in HOME activities
during some or all of her trips to Houston, we do not find her logs to be credible.
For instance, petitioner’s activity log shows that on March 10 and 11, 2006, she
spent seven hours and six hours, respectively, meeting with volunteers to discuss
the literacy program and potential improvements; but the log does not disclose the
names of the persons with whom she met. During 2006 HOME operated only one
literacy program, and it appears that the number of volunteers involved in the
program was quite small. We are simply not convinced, absent corroboration, that
15
Sec. 1.170A-13(a)(2)(i), Income Tax Regs., provides that the taxpayer must
establish that the written records produced are reliable. Sec. 1.170A-13(a)(2)(i)(A),
Income Tax Regs., provides that “[t]he contemporaneous nature of the writing
evidencing the contribution” is one factor to consider in evaluating the reliability of
written records.
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petitioner devoted 13 hours over a two-day period to a discussion of the literacy
program.
Furthermore, while petitioner testified that she deducted only those expenses
related to trips during which she was representing HOME in a substantial capacity,
her receipts and itemized logs do not support that testimony. For instance, petitioner
deducted the cost of renting a car for her trip to Houston from March 8 through 15,
2006; she also deducted the cost of parking at the Atlanta airport. Petitioner did not
deduct the cost of her flight to Houston, and her itemized logs show that she incurred
the parking fees on March 13, 2006. Petitioner deducted gas she purchased on May
10, 2006; however, her flight confirmations show that she did not arrive in Houston
until May 11, 2006. Additionally, petitioner deducted gas purchased in Cleveland on
May 13, 2006, but she did not deduct the cost of renting a car for that trip. She
deducted the cost of parking at the Atlanta airport from July 29 through August 8,
2006, as well as the cost of her car rental for that period, but she did not deduct the
cost of her flight to Houston. She also deducted the entire cost of her flight on
January 6, 2006, from Houston to Atlanta to New Orleans. It does not appear that
petitioner deducted travel expenditures on the basis of whether she acted primarily
for HOME during the trip as she testified. Rather, it appears from this batch of
rather garbled and inconsistent receipts that petitioner deducted all travel
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expenditures for which she maintained receipts regardless of how much time she
spent on HOME activities. While we believe that petitioner performed some
services for HOME during her travels to Houston, she failed to prove that her
travel expenditures were necessarily incurred as part of travels during which she
engaged predominantly in HOME-related activities. See sec. 1.170A-1(g), Income
Tax Regs.
Most importantly, petitioner has failed to show there was no significant
element of personal pleasure, recreation, or vacation in her travels to Houston.
Petitioner owned property in Houston during 2006. Petitioner’s mother and brother
both resided in Houston during 2006. Petitioner testified that some of her family
lived in Cleveland, where she frequently traveled, and she deducted the cost of travel
to Houston over multiple holidays, including Thanksgiving and Christmas, claiming
the trips were attributable solely to HOME.
Because petitioner has failed to convince us that the travel expenses she
reported were exclusively or even primarily attributable to her HOME activities, we
sustain respondent’s determination disallowing her charitable contribution deduction
attributable to travel expenses.
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e. Meal and Entertainment Expenses
A taxpayer may deduct unreimbursed meal and entertainment expenses
incident to the taxpayer’s rendition of services to a charitable organization.16 See
Louis v. Commissioner, T.C. Memo. 1966-204; sec. 1.170A-1(g), Income Tax Regs.
Petitioner testified that she conducted board meetings and sponsored luncheons and
celebrations for the literacy program volunteers, but she failed to provide the names
of those she hosted. Petitioner also asserts that she paid for various items such as
candy and other types of refreshments for HOME’s benefit.
To substantiate the expenditures petitioner claims she made on behalf of
HOME, petitioner introduced receipts as follows:
• receipts from the Olive Garden as follows: (1) April 8, 2006, for
$48.59; (2) May 13, 2006, for $47.09; (3) May 29, 2006, for $80.33;
(4) July 4, 2006, for $57.47; (5) July 29, 2006, for $54.90; (6) October
1, 2006, for $58.23; and (7) December 8, 2006, for $57.79;
16
A taxpayer may deduct amounts expended for meals and lodging incurred
while traveling away from home in the performance of services for a charitable
organization. See sec. 1.170A-1(g), Income Tax Regs.; see also sec. 170(j).
Because we find that petitioner may not claim her travel expenditures as charitable
contributions to HOME, petitioner is not entitled to deduct any meal expenditures
incurred as part of her claimed travel on behalf of HOME. However, we still must
decide whether petitioner is entitled to deduct as a charitable contribution meal
expenditures unrelated to her travel expenditures.
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• a receipt from Boudreaux’s Cajun Kitchen dated July 6, 2006, for
$30.47;
• receipts from Pappasito’s for $76.70, $40.11, and $62.28. The dates on
the receipts are illegible;17
• receipts from Pappasito’s as follows: (1) May 12, 2006, for $26;
(2) June 10, 2006, for $96.97; (3) June 12, 2006, for $49.35; and
(4) December 20, 2006, for $26.68;
• a receipt from Pappasito’s dated October 21, 2006. The amount on the
receipt is partly illegible;18
• a receipt from Brady’s Landing for $58.39. The date on the receipt is
illegible;19
• receipts from Brady’s Landing as follows: (1) March 10, 2006, for
$32.26; and (2) March 25, 2006, for $50;
17
According to petitioner’s itemized logs, the receipts relate to the following
dates: (1) June 30, 2006, for $76.70; (2) August 1, 2006, for $40.11; and (3)
November 11, 2006, for $62.28.
18
According to petitioner’s itemized logs, the amount on the receipt is $65.53.
19
According to petitioner’s itemized logs, the receipt relates to March 9,
2006.
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• receipts from Sam’s Club as follows: (1) May 21, 2006, for $50.32;20
and (2) December 22, 2006, for $32.51;
• receipts from Wal-Mart as follows: (1) July 26, 2006, for $10.30; (2)
July 30, 2006, for $24.41;21 and (3) November 10, 2006, for $25.53;
• a receipt from the Dollar Store for $4.33, on which the date is illegible.
The receipt bears petitioner’s handwritten notation that she purchased
candy for HOME. According to petitioner’s itemized logs, the receipt
relates to December 11, 2006.
In addition, petitioner introduced two illegible receipts. According to petitioner’s
itemized log, both are attributable to board meeting expenses: (1) for $28.04 on
November 13, 2006; and (2) for $27.06 on May 11, 2006.
Although the above-described receipts document expenditures, there is
nothing about the receipts themselves that demonstrates that the expenditures were
for HOME. Petitioner did not call any witnesses to testify regarding the board
20
On a copy of the receipt petitioner indicated that she purchased particular
items for herself and purchased other items for an end-of-school-year party for the
literacy program. On her itemized logs she included only $24.56, the amount
allegedly attributable to petitioner’s HOME-related expenses.
21
On a copy of the receipt petitioner indicated that she purchased particular
items for herself and purchased other items for HOME. On her itemized logs she
included only $14.75, the amounts attributable to her purported HOME-related
expenses.
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meetings or other activities she purportedly sponsored for HOME. We are unable to
find that the meal and entertainment expenditures were directly connected with and
solely attributable to the rendition of services to HOME. See Van Dusen v.
Commissioner, 136 T.C. 525. Accordingly, petitioner is not entitled to a
charitable contribution deduction for meal and entertainment expenses she paid
during 2006.
f. Post Office Box Rental
In her itemized logs petitioner indicated that she paid $36 on behalf of HOME
to rent a post office box. Petitioner introduced a copy of a receipt showing that in
February 2006 HOME paid $36 to rent a post office box. However, petitioner failed
to introduce any canceled checks or credit card statements to show that she
personally paid the $36 rental fee. Accordingly, petitioner is not entitled to a
charitable contribution deduction of $36 for her purported payment of the post office
box rental fee.
g. Conference Fee
In her itemized logs petitioner indicated that she paid $20 to attend a
conference on behalf of HOME. Petitioner introduced a copy of a MasterCard
statement showing a payment of $20 to “Christian Community DE Chicago, IL”.
However, petitioner did not introduce any credible evidence regarding the
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relationship between the conference and HOME’s charitable mission. Petitioner
deducted no other expenses related to her purported attendance at the conference,
and she did not include her attendance at the conference on her travel itinerary for
2006. We are unable to find that the conference fee was directly connected with and
solely attributable to the rendition of services to HOME. See id. Accordingly,
petitioner is not entitled to a charitable contribution deduction of $20 for her
purported conference fee expenditure.
h. Other Materials
In her itemized logs petitioner indicated that she purchased books and a
cassette tape, valued at $31 and $8, respectively, in the course of contributing
teaching services to HOME. To substantiate the book purchase, petitioner
introduced a Wal-Mart shipment summary receipt dated February 20, 2006, showing
that she purchased books including “Teaching to Change Lives” and “The Seven
Laws of the Learner” for $30.61. To substantiate the cassette tape purchase,
petitioner introduced an order confirmation dated March 11, 2006, showing that she
purchased a “Uni Verse of Song” cassette tape for $7.93. The order confirmation
shows that the tape was shipped to Jennie Bell, petitioner’s mother.
Petitioner introduced no credible evidence to show that HOME acknowledged
the contributions or used the items. Absent such evidence, we are unable to find that
- 40 -
the book and the cassette tape were directly connected with and solely attributable
to the rendition of services to HOME. See Van Dusen v. Commissioner, 136 T.C.
at 525. Accordingly, we find that petitioner is not entitled to a charitable
contribution deduction of $39 for her purchases of books and a cassette
tape.
C. Conclusion
We sustain respondent’s determination with respect to petitioner’s noncash
charitable contribution deduction for 2006.
III. Section 6662(a) Penalty
Section 6662(a) and (b)(1) and (2) authorizes the Commissioner to impose a
penalty on an underpayment of tax that is attributable to negligence or disregard of
rules or regulations or any substantial understatement of income tax. Only one
section 6662(a) accuracy-related penalty may be imposed with respect to any given
portion of an underpayment, even if that portion is attributable to more than one of
the types of conduct listed in section 6662(b). New Phoenix Sunrise Corp. v.
Commissioner, 132 T.C. 161, 187 (2009), aff’d, 408 Fed. Appx. 908 (6th Cir. 2010);
see also sec. 1.6662-2(c), Income Tax Regs.
The Commissioner has the initial burden of producing evidence to support the
applicability of a section 6662(a) penalty. Sec. 7491(c). To meet this burden, the
- 41 -
Commissioner must come forward with sufficient evidence to show that it is
appropriate to impose the penalty. See Higbee v. Commissioner, 116 T.C. 446-
447. If the Commissioner satisfies this burden of production, the burden of
producing evidence shifts to the taxpayer, who must demonstrate by a
preponderance of the evidence that he or she is not liable for the penalty either
because the penalty does not apply or because the taxpayer qualifies for relief
under section 6664(c). Id.
Respondent contends that petitioner is liable for the section 6662(a) accuracy-
related penalty because the underpayment of tax is due to either: (1) a substantial
understatement of income tax; or (2) negligence or disregard of the rules or
regulations.
We turn first to respondent’s contention that the section 6662(a) penalty
should be imposed because the underpayment is attributable to petitioner’s
substantial understatement of income tax. For a taxpayer other than a C corporation,
a substantial understatement is any understatement that exceeds 10% of the tax
required to be shown on the return for the year or $5,000, whichever is greater. Sec.
6662(d)(1).
Respondent has met the burden of production by showing that petitioner’s
understatement of income tax exceeded the greater of 10% of the amount of tax
- 42 -
required to be shown on the return or $5,000. Accordingly, petitioner has the burden
of producing sufficient evidence to prove that respondent’s penalty determination is
incorrect. See Higbee v. Commissioner, 116 T.C. 446-447.
A taxpayer may avoid the imposition of a section 6662(a) penalty if she
demonstrates that she had a reasonable basis for the underpayment and that she acted
in good faith with respect to the underpayment. Sec. 6664(c)(1); sec. 1.6664-4(a),
Income Tax Regs. Whether a taxpayer acted with reasonable cause and in good faith
is determined on a case-by-case basis, taking into account all relevant facts and
circumstances, including the taxpayer’s experience, knowledge, and education. Sec.
1.6664-4(b)(1), Income Tax Regs.
Petitioner failed to introduce any evidence to show that she acted with
reasonable cause and in good faith with respect to the underpayment. Despite
petitioner’s expertise as a C.P.A. and an accounting professor, she failed to properly
substantiate her claimed charitable contributions and mischaracterized certain
expenses as building materials on her Form 8283. Consequently, we sustain
respondent’s determination with respect to the section 6662(a) accuracy-related
penalty. Because we conclude that petitioner is liable for the accuracy-related
penalty for her substantial understatement, we need not consider whether she is also
liable for the section 6662 penalty for negligence.
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We have considered all other arguments made by the parties, and to the extent
not discussed above, find those arguments to be irrelevant, moot, or without merit.
To reflect the foregoing,
Decision will be entered for
respondent.