                    T.C. Summary Opinion 2005-181



                       UNITED STATES TAX COURT



                   RUSELL B. RITCHIE, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11722-04S.               Filed December 8, 2005.


     Rusell B. Ritchie, pro se.

     Hans F. Famularo, for respondent.



     DEAN, Special Trial Judge:    This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code.

Unless otherwise indicated, subsequent section references are to

the Internal Revenue Code in effect for the year at issue, and

all Rule references are to the Tax Court Rules of Practice and

Procedure.    The decision to be entered is not reviewable by any

other court, and this opinion should not be cited as authority.
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     Respondent determined a deficiency in petitioner’s Federal

income tax of $1,635 for 2002.    The issue for decision is whether

petitioner is entitled to claim itemized deductions in excess of

those allowed by respondent.

     The exhibits received in evidence are incorporated herein by

reference.   At the time the petition was filed, petitioner

resided in Simi Valley, California.

                             Background

     The parties could not reach agreement on a stipulation of

facts.    There are, however, some documents upon which the parties

were in mutual agreement.    The record, nevertheless, remains

sparse.

     As best as the Court can discern, petitioner was employed as

“Property Manager” for National Stores, Inc. in Gardena,

California, apparently doing business as “Clothestime” (Stores).

Stores was by its own description “a regional leader in quality

off-price retail apparel.”    Petitioner’s duties as Stores’

property manager included responsibility for:    (a) Locating new

real estate opportunities; (b) reviewing active leases; (c)

sustaining relationships with tenants, including collecting

rents; and (d) preserving relationships with vendors responsible

for maintaining the properties.

     During 2002, Stores, facing the threat of bankruptcy,

instituted a policy under which it would not reimburse
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unscheduled business mileage.   Stores reimbursed petitioner for

certain expenses during the year 2002.    Petitioner left the

company in November of 2002.

     Petitioner had a personal cell phone during 2002 that he

also used for business calls.   Petitioner paid a flat rate, no

matter how many phone calls were made on the phone.

     On petitioner’s Schedule A, Itemized Deductions, attached to

his Federal income tax return for 2002, petitioner deducted

unreimbursed employee business expenses of $13,980, tax

preparation fees of $550, and charitable contributions of $1,755,

of which $1,260 was listed as being made by cash or check.

Respondent disallowed all of the deductions for lack of

substantiation.

     The unreimbursed business expenses deducted by petitioner

included a “Uniforms” expense deduction of $850.    As petitioner

presented no argument or evidence on the issues of uniform

expenses and tax preparation fees, he is deemed to have conceded

them.   See Rule 34(b)(4); Rybak v. Commissioner, 91 T.C. 524, 566

n.19 (1988).

                            Discussion

     Petitioner has made no argument that the burden of proof

shifting provisions of section 7491(a)(1) apply to this case, nor

has he offered any evidence that he has complied with the

requirements of section 7491(a)(2).     The burden of proof in this
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case does not shift to respondent.

Employee Business Expenses

     Section 162 generally allows a deduction for ordinary and

necessary expenses paid or incurred during the taxable year in

carrying on a trade or business.    Generally, no deduction is

allowed for personal, living, or family expenses.      See sec. 262.

An employee's trade or business is earning his compensation, and

generally only the expenses that are related to the continuation

of his employment are deductible.       Noland v. Commissioner, 269

F.2d 108, 111 (4th Cir. 1959), affg. T.C. Memo. 1958-60.

     Petitioner must show that the business expenses he claimed

were incurred primarily for business rather than for personal

reasons.   See Rule 142(a).   To show that an expense was not

personal, petitioner must prove that the expense was incurred

primarily to benefit his business, the continuation of his

employment, and that there was a proximate relationship between

the claimed expense and his business.       Walliser v. Commissioner,

72 T.C. 433, 437 (1979).

     Where a taxpayer has established that he incurred a trade or

business expense, failure to prove the exact amount of the

otherwise deductible item may not always be fatal.      Generally,

unless prevented by section 274, the Court may estimate the

amount of such an expense and allow the deduction to that extent.

See Finley v. Commissioner, 255 F.2d 128, 133 (10th Cir. 1958),
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affg. 27 T.C. 413 (1956); Cohan v. Commissioner, 39 F.2d 540,

543-544 (2d Cir. 1930).   In order for the Court to estimate the

amount of an expense, however, the Court must have some basis

upon which an estimate may be made.     See Vanicek v. Commissioner,

85 T.C. 731, 742-743 (1985).   Without such a basis, an allowance

would amount to unguided largesse.     See Williams v. United

States, 245 F.2d 559, 560 (5th Cir. 1957).

     Certain business deductions described in section 274 are

subject to strict rules of substantiation that supersede the

doctrine in Cohan v. Commissioner, supra.     See sec. 1.274-5T(c),

Temporary Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985).

Section 274(d) provides that no deduction shall be allowed with

respect to:   (a) Any traveling expense, including meals and

lodging away from home; (b) any item related to an activity of a

type considered to be entertainment, amusement, or recreation; or

(c) the use of any “listed property”, as defined in section

280F(d)(4), unless the taxpayer substantiates certain elements.

“Listed property” includes any passenger automobile, sec.

280F(d)(4)(A)(i), and any cellular telephone, sec.

280F(d)(4)(A)(v).

     To meet the requirements of section 274(d) the taxpayer must

present adequate records or sufficient evidence to corroborate

the taxpayer’s own testimony to establish:    (1) The amount of the

expenditure or use based on the appropriate measure (mileage may
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be used in the case of automobiles), (2) the time and place of

the expenditure or use, (3) the business purpose of the

expenditure or use, and (4) the business relationship to the

taxpayer of each expenditure or use.

     Automobile Expenses

     When an employee has a right to receive reimbursement for

expenditures related to his status as an employee but fails to

claim such reimbursement, the expenses are not deductible because

they are not “necessary” within the meaning of section 162(a).

Orvis v. Commissioner, 788 F.2d 1406, 1408 (9th Cir. 1986), affg.

T.C. Memo. 1984-533; Lucas v. Commissioner, 79 T.C. 1, 7 (1982);

Kennelly v. Commissioner, 56 T.C. 936, 943 (1971), affd. without

published opinion 456 F.2d 1335 (2d Cir. 1972).     Business

expenses of the employer cannot be converted into the employee’s

expenses by the mere failure of an employee to seek

reimbursement.   Kennelly v. Commissioner, supra; Stolk v.

Commissioner, 40 T.C. 345, 356 (1963), affd. per curiam 326 F.2d

760 (2d Cir. 1964).   The employee has the burden of establishing

that the employer would not reimburse the expense had the

employee requested reimbursement.      Podems v. Commissioner, 24

T.C. 21, 22-23 (1955).

     Petitioner’s claim for unreimbursed employee business

expenses included $9,655 of vehicle expenses.     Petitioner

testified that he responded to certain unscheduled “emergency”
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situations requiring transportation expenses for which Stores

would not have reimbursed him.    He alleged that his

transportation expense deduction was related to the unscheduled

“emergency” trips.

     Petitioner’s evidence on the issue consisted of Stores’

check stubs showing reimbursements to him of $1,550, presumably

for scheduled trips, and a computer-generated monthly log titled

“Mileage - Tax Year 2002”, purporting to show cumulative monthly

mileage to “county locations” in 2002.    It is interesting to note

that the same three counties, Orange, “LA”, and San Diego, as

well as “miscellaneous mileage” are listed every month.    The

total mileage traveled each month is also fairly consistent.

According to petitioner’s evidence, his “emergency” unscheduled

transportation expenses were a startling 623 percent of his

reimbursed expenses for scheduled trips.

     Further complicating matters for petitioner, the Court is

unable to determine from his evidence which of his trips were

reimbursed and which were not because his evidence does not meet

the standard of section 274(d).    Respondent’s determination on

this issue is sustained.

     Other Expenses

     Petitioner claimed $1,245 of “other” business expenses.     The

Court presumes that the Verizon Wireless cell phone bills and

miscellaneous receipts offered by petitioner were submitted as
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substantiation for the deduction of “other” business expenses.

       Petitioner’s cell phone was a personal phone that he also

used for business calls.      Petitioner testified that he paid a

flat rate, regardless of phone usage.      Therefore, aside from the

personal expense of the phone, which is rendered nondeductible

under section 262, he incurred no additional charge for business

use.    To the extent he did incur an additional charge for

business use, petitioner’s evidence fails to meet the

substantiation requirements of section 274(d).

       Petitioner did not show the relationship between the

miscellaneous receipts, some of which are unreadable, and the

continuation of his employment.      The Court therefore finds that

all of petitioner’s “other expenses” are nondeductible personal

expenses.

       Job-Seeking Expenses

       Petitioner deducted job seeking expenses of $2,230.

Deductible job-seeking expenses include those incurred while

searching for different employment in the employee’s same trade

or business. Glenn v. Commissioner, 62 T.C. 270 (1974); Cremona

v. Commissioner, 58 T.C. 219 (1972); see also Rev. Rul. 75-120,

1975-1 C.B. 55, clarified by Rev. Rul. 77-16, 1977-1 C.B. 37.       If

the employee is seeking a job in a new trade or business,

however, the expenses are not deductible under section 162(a).

Dean v. Commissioner, 56 T.C. 895 (1971).
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     Petitioner offered no evidence bearing on whether the new

employment he sought was in the same trade or business as his

employment at Stores.    Petitioner, in fact, offered no evidence

at all on the nature of the new employment he sought.    The

evidence he did offer consisted of 2002 hotel receipts from the

Phoenix Hotel in Phoenix, Arizona, a hotel in Redding,

California, and the Hotel Del Coronado.   Petitioner offered no

specific testimony or corroborating documentary evidence linking

the receipts with job-seeking activity.   The printed information

at the top of the receipt from the Hotel Del Coronado states that

the room was for petitioner in connection with the “Hudson/Kline

Wedding”; his arrival was on New Year’s Eve, and his departure

was on New Year’s Day.

     The Court finds that petitioner is not entitled to any

deduction for job-seeking expenses.

Charitable Contributions

      Petitioner indicated on his Schedule A that he made gifts

to charity of $1,755, of which $1,260 was by cash or check.

There were upon his own admission, however, no gifts of cash or

checks made by petitioner during 2002.    Petitioner did submit as

evidence on this issue a copy of a receipt from the United Cancer

Research Society for the donation of five items of personal

property.   The receipt announces that the donor is responsible

for estimating the fair market value of the items donated.
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Petitioner determined the “total estimated value” as $1,755 for

the donated items, the amount deducted on his return.

     Where a charitable contribution is made in property other

than money, section 170 allows a deduction of the fair market

value of the property at the time of contribution.   See sec.

1.170A-1(c)(1), Income Tax Regs.   Petitioner bears the burden of

proving both the fact that the contribution was made and the fair

market value of the contributed property.   See Rule 142(a); Zmuda

v. Commissioner, 79 T.C. 714, 726 (1982), affd. 731 F.2d 1417

(9th Cir. 1984).

     Petitioner offered only a general description of the items

that he donated.   While the Court believes that petitioner

actually did donate the items, he offered no evidence on how he

arrived at the value of the property listed on the receipt.

Petitioner, therefore, has failed to prove the value of his

contribution.   The Court finds, using its judgment, that the fair

market value of the donated property was $300.   Petitioner is

entitled to a deduction in that amount.   See Cohan v.

Commissioner, supra; Zmuda v. Commissioner, supra; Fontanilla v.

Commissioner, T.C. Memo. 1999-156.
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    Reviewed and adopted as the report of the Small Tax Case

Division.

    To reflect the foregoing,


                                       Decision will be entered

                                  under Rule 155.
