DocketNumber： Docket Nos. 16436-81, 29287-81.
Citation Numbers： 44 T.C.M. 1237, 1982 Tax Ct. Memo LEXIS 196, 1982 T.C. Memo. 562
Filed Date： 9/23/1982
Status： Non-Precedential
Modified Date： 11/21/2020
MEMORANDUM FINDINGS OF FACT AND OPINION
SCOTT,
| Additions to Tax | ||
| Calendar | Deficiency in | I.R.C. 1954 |
| Year | Income Tax | Section 6653(a) |
| 1977 | $6,928 | $346.40 |
| 1978 | 3,200 | 160.00 |
| 1979 4,479 | 224.00 |
1982 Tax Ct. Memo LEXIS 196">*197 Some of the issues raised by the pleadings have been disposed of by the parties leaving for our decision the following: (1) whether petitioners are entitled to deduct the cost of a concrete block wall built on petitioners' rental property or are required to capitalize the cost of the wall and depreciate it and, if it is to be depreciated, over what number of years is it properly depreciable; (2) whether petitioners are entitled to include in their medical expense deduction the cost of vitamins which were prescribed for them by a physician; (3) whether petitioners are entitled to deductions they claimed as contributions to the Universal Life Church, Inc., in the amount of $19,328 in 1977 and $11,093 in 1978; (4) whether petitioners are entitled to deduct in 1978 either as a tax or a contribution an amount which they estimated was the extra cost of items of food which they contend sold at a premium because of being approved by the Council of Rabbis; and (5) whether petitioners are liable for the addition to tax under
Some of the facts have been stipulated and are found accordingly.
Petitioners, husband and wife, who resided in San Diego, California, at the time of the filing of the petitions in this case, filed joint Federal income tax returns for the calendar years 1977 and 1978.
During 1977 and 1978, petitioners owned a piece of rental property. They had owned the property for some years and used it as rental property for approximately 20 years prior to the years here in issue. There had been a wooden wall on the property that kept it from eroding. In 1977, the wall was in total disrepair and petitioners commenced the building of a concrete block wall to replace the wooden wall. They paid a total of $2,177 for the wall of which $1,150 was paid in 1977 and $1,027 in 1978. The wall was completed in January 1978. The house on the rental property on which the wall was built was shown on the depreciation schedule of petitioners' 1977 tax return as having been acquired on May 21, 1958, at a cost of $6,500, and depreciation was taken on a straight-line basis and a useful life of 30 years.
The wooden fence which had previously been on the property was made from redwood. 1982 Tax Ct. Memo LEXIS 196">*199 It had been placed on the property in 1958 and had remained in good shape for approximately 10 years. After that, it had been in such poor condition that the property had begun to erode from the heavy rains that occurred at certain times of the year. The property on which the fence was placed was located about one block from an earthquake fault line and there was earthquake activity, although the quakes were minor, affecting the property from time to time. This earthquake activity had a tendency to break up or crack a concrete block fence. Also, there is a considerable amount of flooding in the area in which the property is located and the flooding tends to settle the foundation of a concrete block wall and make it more susceptible to cracking at the time of earthquakes.
During the years here in issue, Mr. Neil suffered from a heart condition and Mrs. Neil suffered from arterial sclerosis. During the years here in issue and for some years prior thereto, Mr. and Mrs. Neil consulted regularly with H. Rudolph Alsleben, M.D. Dr. Alsleben was interested in the Alsleben-Shute Foundation for Nutritional Research of Anaheim, California. He advised both Mr. and Mrs. Neil that massive1982 Tax Ct. Memo LEXIS 196">*200 doses of vitamins would alleviate their medical problems. He prescribed large doses of various vitamins including B-complex vitamins, calcium, protein vitamins, vitamins C, E, and other types of vitamins for Mrs. Neil and similar type vitamins for Mr. Neil as well as A/G Pro and Enzaid vitamins for Mr. Neil. Petitioners purchased and consumed these vitamins in accordance with Dr. Alsleben's prescriptions. During 1977, the total cost of the vitamins purchased and consumed by petitioners pursuant to Dr. Alsleben's prescriptions was $1,023. The total cost of the vitamins purchased and consumed by petitioners during 1978 under the instructions and prescriptions of Dr. Alsleben was $1,718.
Sometime prior to January 1, 1977, Mr. Neil contacted representatives of the Universal Life Church, Inc., Modesto, California, with respect to obtaining a charter for a church and congregation and his credentials as a minister. Under date of January 1, 1977, Mr. Neil was sent a document headed at the top "Universal Life Church, Inc." and underneath that heading, "Charter." The document stated that "
On four different occasions during 1977, Mr. Neil gave cash to Mrs. Neil to1982 Tax Ct. Memo LEXIS 196">*202 put in a safe in their home. Three of the amounts of cash were $5,000 each, and the other amount was $4,328. In 1978, on four different occasions, Mr. Neil gave Mrs. Neil cash to put in the safe in their home and the total of the cash given to Mrs. Neil in 1978 was $11,093. Mrs. Neil had the combination to this safe and she was the individual who could open the safe and take out the cash in it as she saw fit. Mr. Neil, in the quarterly reports he made to the Universal Life Church, Inc., would record the money he had given to Mrs. Neil to put in the safe as contributions to his congregation. At the time of the trial of this case, the cash Mrs. Neil had put into the safe was still in the safe and it was her intent, when her husband retired from the work he was doing during 1977 and 1978, that she and Mr. Neil would begin to use some of the money as salary for him to do full-time work as a minister and for enlarging their home or building a new home which they considered to be a church building.
Mr. and Mrs. Neil bought their groceries and related items from a supermarket. They read an article which stated that where a can or package in a supermarket was marked with a "K" or a1982 Tax Ct. Memo LEXIS 196">*203 "U," it meant that the item was acceptable as Kosher food. Mr. Neil was of the opinion that, when a can or box had a "K" or "U" on it, the price was greater than it would have been if the food were not approved by the Council of Rabbis as Kosher food. In buying the food, he had no intention to make a contribution to any religious organization but it was his view that in shopping at a supermarket he had no choice except to buy food which was higher priced because of having been approved as Kosher food.
Petitioners, on their Federal income tax return for 1977, claimed a deduction of $1,150 for a replacement fence. On their Federal income tax return for the calendar year 1978, they claimed a deduction of $1,027 as fence replacement.
Petitioners on their 1977 Federal income tax return claimed total medical expenses of $4,189 which they reduced by $1,160 as 3 percent of their adjusted gross income leaving an amount of $3,029 to which they added $150 of hospital insurance premiums making a total of $3,179 that they claimed as deductible. On their 1978 Federal income tax return, petitioners claimed total medical expenses of $2,406 which they reduced by $677 or 3 percent of their adjusted1982 Tax Ct. Memo LEXIS 196">*204 gross income leaving $1,729 to which they added $150 as hospital insurance premiums making a total claimed deduction of $1,879.
Petitioners on their 1977 Federal income tax return claimed a charitable contribution deduction of $19,328 to the Universal Life Church, Inc., and on their 1978 return claimed a deduction of $11,093 as a contribution to the Universal Life Church, Inc. These amounts represented the amounts of cash which Mr. Neil had given Mrs. Neil to put in the safe in their home. Petitioners on their 1978 Federal income tax return claimed a deduction for $200 under the designation "Kosher Food Tax."
Respondent in his notice of deficiency to petitioners determined that the fence replacement which petitioners made on rental property was a capital improvement and that no deduction was allowable for the fence replacement in 1977, and in 1978 only a $73 depreciation deduction was allowable. The $73 amount was arrived at by using a 30-year useful life for the fence. Respondent in his notice of deficiency to petitioners for the year 1977 determined that petitioners had verified $3,222 of medical expenses rather than $4,189. Respondent redetermined the medical expense deduction1982 Tax Ct. Memo LEXIS 196">*205 to which petitioners were entitled in 1977 by computing 3 percent of corrected adjusted gross income which was subtracted from $3,222. The item considered unverified by respondent in recomputing petitioners' medical expenses for 1977 was the $1,023 paid by petitioners for vitamins. Respondent in the year 1977 disallowed petitioners' claimed charitable contribution to the Universal Life Church, Inc., of $19,328 and for the year 1978 disallowed petitioners' claimed contribution to the Universal Life Church, Inc., of $11,093. 1982 Tax Ct. Memo LEXIS 196">*206 Respondent in his notice of deficiency to petitioners for the year 1978 also disallowed the $200 claimed by petitioners to be deductible as "Kosher Food Tax." OPINION The record is certainly not as clear as it might be as to the economic useful life of the concrete block fence. However, considering the length of time the wooden fence remained in good condition, the age of the house on the property on which the fence was placed, and Mr. Neil's testimony as to his opinion of the useful life of the fence as well as the agent's testimony that in his opinion a 30-year useful life was too long, we have concluded that the preponderance of the evidence here is that the useful life of the fence is 15 years. Therefore, depreciation to be deducted by petitioners in the year 1978 should be based on the total cost of the fence and a useful life of the fence of 15 years. The record is not completely clear with respect to respondent's reason for disallowing the deduction claimed by petitioners as a part of medical expenses for vitamins that they purchased pursuant to the direction of their doctor. Respondent in a memorandum filed with the Court points out that if the prescribed1982 Tax Ct. Memo LEXIS 196">*209 food or beverage is taken solely for the alleviation or treatment of an illness, is in no way a part of the nutritional needs of the patient, and a statement as to the particular facts and to the food or beverage prescribed is submitted by a physician, the cost of such food or beverage may be deducted as a medical expense. * * * The particular circumstance being considered in 1982 Tax Ct. Memo LEXIS 196">*211 Plaintiff is free to espouse his religious doctrine and to solicit support for his cause. He simply must allow the government access to information in order to determine whether the church remains within the criteria for a lighter tax burden. The church may, of course, forego the exemption and limit IRS access to church records. [Fn. ref. omitted.] Petitioners in this case refused to furnish any information about their church activities1982 Tax Ct. Memo LEXIS 196">*215 to respondent or to the Court. We conclude that petitioners have totally failed to establish that they are entitled to the deductions of $19,328 in 1977 and $11,093 in 1978 which they claimed as contributions to the Universal Life Church, Inc. The record is totally devoid of any evidence to substantiate petitioners' claimed deduction of $200 for "Kosher Food Tax" either as a tax or as a charitable contribution. Petitioners totally failed to show that any food they bought was "Kosher" food and, if it were, that it cost any more than any other food would have cost. What the record shows is that petitioners read some article that stated that certain foods marked in a certain manner were Kosher foods and for this reason cost more than other foods because they had been approved by the Council of Rabbis. Petitioners did not know whether or not this article was accurate. No evidence was received that any foods purchased by petitioners were Kosher foods since petitioners had no competent evidence of this fact to offer. We therefore sustain respondent in his disallowance of the $200 deduction claimed by petitioners as "Kosher Food Tax" because of petitioners' total failure of proof. 1982 Tax Ct. Memo LEXIS 196">*216 When respondent determines an addition to tax under
1. Petitioners' tax liability for the year 1979 was disposed of entirely by agreement of the parties.↩
2. Unless otherwise indicated, all statutory references are to the Internal Revenue Code of 1954, as amended and in effect during the years here in issue.↩
3. Obviously the $1,023 plus the $3,222 considered as verified does not total $4,189. The addition is not correct if the $150 of claimed hospital insurance premiums is added into the amount. However, the parties at the trial agreed that the amount which was stated in the notice of deficiency not to be verified as paid for qualifying medical expenses consisted of the amounts petitioners paid for vitamins and that the amount they paid in 1977 was $1,023.↩
4.
(a) General Rule.--No deduction shall be allowed for--
(1) Any amount paid out for new buildings or for permanent improvements or betterments made to increase the value of any property or estate. * * *↩
5. In
After carefully evaluating his testimony, we remain unconvinced that petitioners expended any amounts for medical expenses and charitable contributions other than $173.04 for doctors, hospital service, and the like and possibly $60.00 for vitamins. n2 Neither of these amounts is sufficient to entitle petitioners to any deduction.
Footnote 2 stated:
We express no opinion as to whether vitamins purchased without a doctor's prescription constitute medical expenses.
Cf.
Petitioner claimed sizeable medical deductions for vitamins and food. She prescribes the dosages of vitamins for herself and claims to limit her diet to organic foods. Vitamins consumed pursuant to a self-imposed plan are not deductible as medical costs. * * *↩
6.
(c) Charitable Contribution Defined.--For purposes of this section, the term "charitable contribution" means a contribution or gift to or for the use of--
(2) A corporation, trust, or community chest, fund, or foundation--
(A) created or organized in the United States or in any possession thereor, or under the law of the United States, any State, the District of Columbia, or any possession of the United States;
(B) organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provisions of athletic facilities or equipment), or for the prevention or cruelty to children or animals;
(C) no part of the net earnings of which inures to the benefit of any private shareholder or individual; and
A contribution or gift by a corporation to a trust, chest, fund, or foundation shall be deductible by reason of this paragraph only if it is to be used within the United States or any of its possessions exclusively for purposes specified in subparagraph (B).↩