                  T.C. Summary Opinion 2004-23



                     UNITED STATES TAX COURT



                 BENJAMIN C. KENT, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 6490-03S.           Filed March 9, 2004.


     Benjamin C. Kent, pro se.

     Taylor Cortright, for respondent.



     PANUTHOS, Chief Special Trial Judge:   This case was heard

pursuant to the provisions of section 7463 of the Internal

Revenue Code in effect at the time the petition was filed.    The

decision to be entered is not reviewable by any other court, and

this opinion should not be cited as authority.   Unless otherwise

indicated, subsequent section references are to the Internal

Revenue Code in effect for the years in issue, and all Rule

references are to the Tax Court Rules of Practice and Procedure.
                              - 2 -

     Respondent determined deficiencies in petitioner’s 1999 and

2000 Federal income taxes and penalties as follows:

                                             Penalty
          Year          Deficiency         Sec. 6662(a)

          1999           $14,016             $2,803.20
          2000             8,005              1,601.00

After concessions,1 the issues for decision are:   (1) Whether

petitioner is entitled to dependency exemption deductions for the

1999 and 2000 taxable years for his brother Bennard Kent; (2)

whether petitioner is entitled to “head of household” filing

status for the 1999 and 2000 taxable years;2 (3) whether

petitioner is entitled to deductions for moving expenses of

$29,500 for the 1999 taxable year and $13,660 for the 2000

taxable year; (4) whether petitioner is entitled to home mortgage

interest deductions of $17,9783 for the 1999 taxable year and


     1
        Petitioner concedes that he is not entitled to the
Schedule C, Profit or Loss From Business, loss in the amount of
$30,319 for the 2000 taxable year. Respondent concedes that
petitioner is entitled to the additional student loan interest
deduction of $48 for the 1999 taxable year. In the notice of
deficiency, respondent determined that petitioner was not
entitled to certain itemized deductions. Respondent, however,
failed to allow petitioner a standard deduction. See sec. 63(b).
Respondent concedes that, if we conclude that petitioner is not
entitled to itemized deductions for 1999 and 2000, then
petitioner would be entitled to the standard deduction for the
corresponding taxable year.
     2
        Respondent determined that petitioner was entitled to a
filing status of “single” for the 1999 and 2000 taxable years.
     3
        Petitioner claimed a home mortgage interest deduction of
$21,200 for the 1999 taxable year. After an examination of
                                                   (continued...)
                                - 3 -

$20,614 for the 2000 taxable year; (5) whether petitioner is

entitled to a deduction for unreimbursed employee expenses of

$1,125 for the 1999 taxable year; (6) whether petitioner is

entitled to a deduction for casualty and theft loss of $6,800 for

the 1999 taxable year; and (7) whether petitioner is liable for

accuracy-related penalties under section 6662(a) for the 1999 and

2000 taxable years.

     Petitioner resided in Dumfries, Virginia, at the time of

filing his petition.    Some of the facts have been stipulated, and

they are so found.    The stipulation of facts and the attached

exhibits are incorporated herein by this reference.    For

convenience we combine our findings of fact and conclusions.

     Petitioner filed timely Federal income tax returns for

taxable years 1999 and 2000.    In each return, petitioner claimed

a dependency exemption deduction for his brother Bennard Kent and

head-of-household filing status.    Petitioner also claimed the

following deductions, expenses, and losses:

     Deduction, Expense, or Loss           1999         2000

     Moving expenses                     $29,500      $13,660
     Home mortgage interest               21,200       20,614
     Unreimbursed employee expenses        1,125         ---
     Casualty and theft loss               6,800         –--




     3
      (...continued)
petitioner’s 1999 Federal income tax return, respondent
determined that petitioner was entitled to a home mortgage
interest deduction of $3,222.
                                 - 4 -

       A taxpayer is generally required to substantiate deductions

by keeping books and records sufficient to establish the amount

of the deductions.    Sec. 6001; sec. 1.6001-1(a), Income Tax Regs.

Deductions are a matter of legislative grace, and generally the

taxpayer bears the burden of proving entitlement to any deduction

claimed.    Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S.

79, 84 (1992).    The burden of proof has not shifted to respondent

pursuant to section 7491(a).     While examination of the tax

returns in issue commenced after July 22, 1998, petitioner has

not satisfied any of the criteria of section 7491(a)(2)(A) and

(B).    Indeed, we found petitioner’s testimony to be questionable;

his testimony was at times vague, evasive, or inconsistent with

documents made part of this record.

1.   Dependency Exemption Deductions

       A taxpayer is allowed a deduction for a dependent over half

of whose support is provided by the taxpayer.      Secs. 151(a),

(c)(1), 152(a).    The term “dependent” includes a brother of the

taxpayer.    Sec. 152(a)(3).   The term “support” includes food,

shelter, clothing, medical and dental care, education, and the

like.    Sec. 1.152-1(a)(2)(i), Income Tax Regs.    The total amount

of support for each of the claimed dependents furnished by all

sources during the year in issue must be established by competent

evidence.    Blanco v. Commissioner, 56 T.C. 512, 514 (1971).      The

amount of support that the claimed dependent received from the
                               - 5 -

taxpayer is compared to the entire amount of support the

individual received from all sources.     Sec. 1.152-1(a)(2)(i),

Income Tax Regs.

      In the present case, petitioner did not provide any

documentary evidence to substantiate his self-serving testimony

that he provided over half the support of his brother Bennard

Kent during the years in issue.   The Court is not required to

accept petitioner’s self-serving testimony.     Niedringhaus v.

Commissioner, 99 T.C. 202, 212 (1992).     We sustain respondent’s

determination that petitioner is not entitled to dependency

exemption deductions for the 1999 and 2000 taxable years for his

brother Bennard Kent.

2.   Filing Status

      To qualify for head of household, a taxpayer must satisfy

the requirements of section 2(b).    Under section 2(b), a taxpayer

shall be considered a head of household if he or she is not

married at the close of the taxable year, is not a surviving

spouse, and, among other choices, maintains as his or her home a

household which constitutes for more than half of such taxable

year the principal place of abode, as a member of such household,

of either an unmarried descendant of a son or daughter of the

taxpayer, or any other person who is a dependent of the taxpayer

if the taxpayer is entitled to a deduction for the taxable year

for such person under section 151.     Sec. 2(b)(1)(A); sec. 1.2-
                                 - 6 -

2(b)(3)(ii), (c)(1), Income Tax Regs.    A taxpayer shall be

considered as maintaining a household only if he or she pays more

than one-half of the cost thereof for the taxable year.     Sec.

1.2-2(d), Income Tax Regs.

      In the present case, respondent determined that petitioner

was not entitled to head-of-household filing status for 1999 and

2000.     Petitioner was married to Vivian Eastman-Kent (hereinafter

Mrs. Eastman-Kent) during the years in issue.     We have also

sustained respondent’s determination that Bennard Kent was not

petitioner’s dependent.     Either ground precludes petitioner from

being entitled to head-of-household filing status.     Respondent’s

determination is sustained.4

3.   Moving Expenses

      Section 217 permits a deduction for “moving expenses paid or

incurred during the taxable year in connection with the

commencement of work by the taxpayer as an employee or as a self-

employed individual at a new principal place of work.”     The term

“moving expenses” does not include any expenses for meals.       Sec.

217(b)(1).     The term also does not include either the cost of

pre-move househunting trips or the cost of temporary living



      4
        Respondent’s determination that petitioner is entitled to
filing status of single is inconsistent with the findings in this
record. However, respondent does not argue that petitioner’s
filing status is married filing separately or assert an increase
in deficiency as a result of these findings. We therefore do not
disturb, and indeed accept, respondent’s determination.
                                - 7 -

expenses in the general location of the new job.    H. Conf. Rept.

103-213, at 592 (1993), 1993-3 C.B. 393, 470.   The term “moving

expenses” means only the reasonable expenses of moving household

goods and personal effects from the former residence to the new

residence and of traveling (including lodging) from the former

residence to the new place of residence.   Sec. 217(b)(1).

     To qualify for the deduction, the taxpayer must satisfy the

conditions regarding both distance to the taxpayer’s new

principal place of work as set forth in section 217(c)(1) and

duration of full-time employment as set forth in section

217(c)(2).   The condition of section 217(c)(2) shall not apply

“if the taxpayer is unable to satisfy such condition by reason of

* * * involuntary separation (other than for willful misconduct)

from the service of, or transfer for the benefit of, an employer

after obtaining full-time employment in which the taxpayer could

reasonably have been expected to satisfy such condition.”     Sec.

217(d)(1)(B).

     If claimed deductions are not adequately substantiated, we

may estimate them, provided we are convinced that the taxpayer

incurred such expenses and we have a basis upon which to make an

estimate.    Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930);

Vanicek v. Commissioner, 85 T.C. 731, 743 (1985).    Without such a

basis, any allowance would amount to unguided largesse.      Williams

v. United States, 245 F.2d 559, 560 (5th Cir. 1957).
                                - 8 -

     Petitioner moved three times during the years in issue--

twice in 1999 and once in 2000.   During the first move, he

relocated in February 1999, from Savage, Minnesota, to Charlotte,

North Carolina, to work for Alcoa as a senior electrical

engineer.   During the second move, petitioner relocated in

October 1999, from Charlotte, North Carolina, to either

Louisville, Kentucky, or Jeffersonville, Indiana, to work for

Tower Automotive.5   During the third move, petitioner moved to

Philadelphia, Pennsylvania, in August 2000, to begin law school.

     Petitioner claimed a deduction for moving expenses of

$29,500 for 1999.    For his first move in 1999, from Minnesota to

North Carolina, petitioner presented two documents, each entitled

“Moving Expense Statement”, that he submitted to Alcoa for

reimbursement.6   Such statements cover a period from April 1999


     5
        The record is unclear as to where petitioner actually
moved. At the time of trial, petitioner testified that he moved
from Charlotte, N.C., to an apartment in Louisville, Ky. His
testimony is inconsistent and does not correspond with all of the
documents in the record. For example, petitioner presented a
“Household Goods Descriptive Inventory” dated Oct. 19, 1999,
which indicates a “loading address” in Savage, Minn., and a
destination of Louisville, Ky. However, petitioner also provided
a receipt for cable installation on Oct. 30, 1999, for an
apartment in Jeffersonville, Ind. Moreover, Tower Automotive
listed petitioner’s address at Jeffersonville, Ind., on his Form
W-2, Wage and Tax Statement, for 1999.
     6
        Petitioner also presented a receipt dated July 13, 1999,
regarding furniture purchased in Charlotte, N.C., and numerous
receipts for car rentals in Charlotte, N.C., from late June 1999
to early October 1999. Petitioner, however, testified that he
stopped working for Alcoa in June 1999, when it terminated his
                                                   (continued...)
                               - 9 -

to June 9, 1999, and do not correspond with petitioner’s

testimony that he moved to North Carolina in February 1999.

Moreover, most of the expenses listed on these statements do not

constitute “moving expenses” under section 217, because they

relate to expenditures for food, lodging for the purpose of

“interim living”, and miscellaneous expenses such as “phone

cards, city maps and other items”.     For the remaining expenses

listed on these statements–-such as “extra luggage charged”,

airfare, and unspecified transportation expenses for the period

from May to June 9, 1999–-petitioner did not provide the

underlying receipts or supporting documentation.

     For his second move in 1999, from North Carolina to either

Kentucky or Indiana, petitioner presented to respondent various

receipts for food, clothing, gasoline, PakMail, post office

mailings, and other personal items from July to December 1999.

However, none of these receipts was made part of the record.

Petitioner instead provided the Court documents entitled “Expense

Voucher” that he submitted to Tower Automotive for reimbursement,

without any supporting receipts.   Most of the expenses listed on

such vouchers do not constitute moving expenses under section

217, because they are expenses for food, apartment lease/rental,

hotel stays, and city maps.   Petitioner did not provide the



     6
      (...continued)
employment.
                               - 10 -

underlying receipts or supporting documentation for the remaining

expenses listed on such vouchers.

     Petitioner claimed a deduction for moving expenses of

$13,660 for 2000.    He presented a receipt relating to the move

from Jeffersonville, Indiana, to Philadelphia, Pennsylvania, in

the amount of $1,315.   This move was in connection with the

commencement not of work, but of law school, and thus, any costs

incurred and associated with this move are not allowed as a

deduction under section 217.

     While petitioner incurred some costs for his three moves,

most of his costs did not constitute moving expenses as defined

under section 217.   Further, petitioner failed to substantiate

his claimed moving expenses with documentary evidence such as

vendor receipts, credit card statements, canceled checks, or

airline tickets.    Petitioner’s testimony also was not credible.

Accordingly, since the record provides no basis for making an

estimate, we decline to invoke Cohan v. Commissioner, supra.       We

sustain respondent’s determination on this issue.

4.   Itemized Deductions

      Petitioner claimed itemized deductions for home mortgage

interest, unreimbursed employee expenses, and casualty and theft

loss.   Because petitioner is not entitled to these itemized

deductions, as we discuss later, and because any remaining

itemized deductions are not in excess of the applicable standard
                               - 11 -

deduction, petitioner is entitled to the standard deduction for

1999 and 2000.

     a.   Home Mortgage Interest

     Petitioner claimed itemized deductions for home mortgage

interest expense of $21,200 for the 1999 taxable year and $20,614

for the 2000 taxable year.   Respondent decreased the claimed

amount for 1999, allowing a deduction of $3,222, and disallowed

the claimed deduction for 2000 in full.

     Mortgage interest is generally deductible under section

163(a), subject to the requirements of section 163(h).

Petitioner, however, has not substantiated that he paid mortgage

interest expense of any amount in 1999 or 2000.   We therefore

sustain respondent’s determination on this issue.   Sec. 6001;

sec. 1.6001-1(a), (e), Income Tax Regs.

     b.   Unreimbursed Employee Expenses

     Petitioner claimed a deduction for unreimbursed employee

expenses of $1,125 for 1999.

     “It is clear that an individual may be in the trade or

business of being an employee and that ordinary and necessary

expenses incurred in that trade or business are deductible under

section 162.”    Kurkjian v. Commissioner, 65 T.C. 862, 869 (1976).

Petitioner, however, has not provided any evidence to

substantiate either the existence or amount of any unreimbursed
                               - 12 -

employee expenses in 1999.   We therefore sustain respondent’s

determination on this issue.

     c.   Casualty and Theft Loss

      Petitioner claimed a deduction for a casualty and theft loss

of $6,800 for the 1999 taxable year.     He contends that this loss

was attributable to a “computer display, camera, books and side

tables that [he] lost at the storage in Louisville, Kentucky, and

the basement of a family friend.”     Petitioner further contends

that he did not recover from any insurance claims.

      In general, a taxpayer is entitled to deduct any loss

sustained during the taxable year and not compensated for by

insurance or otherwise.   Sec. 165(a).    Where the loss is not

connected with a trade or business or a transaction entered into

for profit, the deduction is limited to losses arising “from

fire, storm, shipwreck, or other casualty, or from theft” and the

requirements of section 165(h).     Sec. 165(c)(3).   Petitioner,

however, has not substantiated either the existence or the amount

of any casualty or theft loss in 1999.     We therefore sustain

respondent’s determination on this issue.

5.   Accuracy-Related Penalties Under Section 6662(a)

      The Commissioner has the “burden of production in any court

proceeding with respect to the liability of any individual for

any penalty” under section 6662(a).     Sec. 7491(c); Higbee v.

Commissioner, 116 T.C. 438, 446-447 (2001).     Section 6662(a)
                              - 13 -

imposes an accuracy-related penalty in the amount of 20 percent

of the portion of the underpayment of tax attributable to

negligence or disregard of rules or regulations.     See sec.

6662(b)(1).   Negligence is any failure to make a reasonable

attempt to comply with the provisions of the Internal Revenue

laws and includes any failure by the taxpayer to keep adequate

books and records or to substantiate items properly.     See sec.

6662(c); sec. 1.6662-3(b)(1), Income Tax Regs.     Moreover,

negligence is the failure to exercise due care or the failure to

do what a reasonable and prudent person would do under the

circumstances.   Neely v. Commissioner, 85 T.C. 934, 947 (1985).

Disregard includes any careless, reckless, or intentional

disregard of rules or regulations.     See sec. 6662(c); sec.

1.6662-3(b)(2), Income Tax Regs.   No penalty will be imposed with

respect to any portion of an underpayment if it is shown that

there was reasonable cause for such portion and that the taxpayer

acted in good faith with respect to such portion.     See sec.

6664(c).

     On the basis of the record, we conclude that petitioner is

liable for the accuracy-related penalties under section 6662(a).

Petitioner claimed various deductions for expenses that he could

not substantiate.   Indeed, petitioner claimed a Schedule C,

Profit or Loss From Business, loss in the amount of $30,319 for

the 2000 taxable year, but later he conceded that he was not
                               - 14 -

entitled to such loss.    Petitioner also filed as a head of

household for 1999 and 2000 when he was married to Mrs. Eastman-

Kent.   Petitioner has not shown that he acted in good faith in

claiming these amounts.   Respondent has met his burden of

production under section 7491(c).    We conclude that petitioner’s

actions were not those of a reasonable and prudent person under

the circumstances.   Thus, we sustain respondent on this

adjustment.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing,

                                           Decision will be entered

                                     under Rule 155.
