                  T.C. Summary Opinion 2004-141



                     UNITED STATES TAX COURT



                JAMES BRIAN MEDIS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10132-03S.            Filed October 13, 2004.


     James Brian Medis, pro se.

     Thomas J. Fernandez, 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 year in issue, and all Rule

references are to the Tax Court Rules of Practice and Procedure.
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     Respondent determined that petitioner is liable for a

deficiency in Federal income tax of $6,662 and an addition to tax

under section 6651(a)(1) of $999.30 for the 2000 taxable year.

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

petitioner is entitled to claimed itemized deductions and (2)

whether petitioner is liable for the alternative minimum tax

(sometimes referred to as AMT) for the 2000 taxable year.

                            Background

     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.   At the time the petition

was filed petitioner resided in Blue Jay, California.

     On June 17, 2001, petitioner filed a Form 1040, U.S.

Individual Income Tax Return, for the 2000 taxable year (2000

income tax return).   Petitioner did not request, nor did he

receive, an extension to file his 2000 income tax return.

Petitioner reported wages of $50,921, such amount also being

reported as petitioner’s adjusted gross income for the 2000

taxable year.   Petitioner claimed the following itemized

deductions on Schedule A:




     1
        Petitioner concedes that he is liable for the addition to
tax under sec. 6651(a)(1) for the 2000 taxable year. Petitioner
further concedes that he received, but failed to report wages of
$12,138 for the 2000 taxable year.
                                    - 3 -
      Medical and dental expenses                                       -0-
      State and local income taxes                                     $336
      Interest                                                          -0-
      Gifts to charity                                                  400
      Job expenses and most other miscellaneous deductions           33,645
      Other miscellaneous deductions                                    500

                                                                 1
      Total itemized deductions                                   $34,881

      1
        Petitioner incorrectly calculated the total itemized deductions and
claimed $34,145.

The $33,645 claimed for “Job expenses and most other

miscellaneous deductions” was calculated with reference to

miscellaneous itemized deductions of $34,663.2            Petitioner did

not report an AMT on his 2000 income tax return.

      During an examination of the 2000 income tax return,

petitioner submitted a Form 1040X, Amended U.S. Individual Income

Tax Return, for the 2000 taxable year (amended return).

Petitioner reported additional wages of $12,138 and claimed

additional itemized deductions of $12,950.           Specifically,

petitioner claimed the following itemized deductions on Schedule

A of the amended return:

      Medical and dental expenses                                       -0-
      State and local income taxes                                     $336
      Interest                                                          -0-
      Gifts to charity                                                  400
      Job expenses and most other miscellaneous deductions           47,095
      Other miscellaneous deductions                                    -0-
                                                                 1
      Total Itemized Deductions                                   $47,831

      1
       Petitioner incorrectly reported the “Correct amount” as $47,950.
      In the notice of deficiency, respondent determined that

petitioner failed to report additional wages of $12,138 (as


      2
        Taking into consideration the 2-percent floor on
miscellaneous itemized deductions.
                               - 4 -

reported by petitioner on the amended return) and that petitioner

was liable for an AMT of $4,802 for the 2000 taxable year.

Respondent also determined that petitioner was not entitled to

the additional itemized deductions claimed on the amended return

and made a downward adjustment of $243 to the total itemized

deductions claimed for that taxable year.

                            Discussion

     The Commissioner’s determination is presumed correct, and

generally, a taxpayer bears the burden of proving otherwise.

Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).

Moreover, deductions are a matter of legislative grace, and the

taxpayer bears the burden of proving entitlement to any deduction

claimed.   New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440

(1934); Welch v. Helvering, supra at 115.   This includes the

burden of substantiation.   Hradesky v. Commissioner, 65 T.C. 87,

90 (1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976).

     The burden as to a factual issue relevant to the liability

for tax may shift to the Commissioner if the taxpayer introduces

credible evidence and satisfies the requirements under section

7491(a)(2) to substantiate items, maintain required records, and

fully cooperate with respondent’s reasonable requests.   Sec.

7491(a).   In the present case, the burden of proof remains on

petitioner because he has neither taken a position as to whether

the burden of proof should be placed on respondent nor
                                - 5 -

established that he has complied with the requirements of section

7491(a).

Itemized Deductions

     Respondent determined that petitioner is not entitled to

$243 of the $34,881 claimed as total itemized deductions on his

2000 income tax return.    This determination was made pursuant to

section 67, which provides that “miscellaneous itemized

deductions for any taxable year shall be allowed only to the

extent that the aggregate of such deductions exceeds 2 percent of

adjusted gross income.”    Sec. 67(a).   On the 2000 income tax

return, petitioner claimed miscellaneous itemized deductions of

$34,663 before the section 67 reduction.     Petitioner’s adjusted

gross income for the 2000 taxable year increased from $50,921 to

$63,059, the difference being solely attributable to the

additional wages of $12,138 that petitioner failed to report on

the 2000 income tax return.3   Because of this difference, the 2-

percent floor on miscellaneous itemized deductions under section

67 was “raised” by $243.    We conclude that respondent has

correctly computed this adjustment.

     We note that respondent’s determination with respect to

itemized deductions was based upon the 2000 income tax return and

not the amended return.    While petitioner has claimed additional



     3
        As indicated, petitioner reported this amount on his
amended return.
                                 - 6 -

itemized deductions on the amended return, he has not presented

any evidence to substantiate that he is entitled to these

additional deductions.     Instead, petitioner contends that the

total itemized deductions should not be limited when he

accurately answered the following question on line 28 of Schedule

A:   “Is Form 1040, line 34, over $128,950 (over $64,475 if

married filing separately)?”     This limitation, however, is based

upon section 68 and not upon section 67, the latter of which, as

indicated earlier, is the basis of respondent’s determination.

      We conclude that petitioner is entitled to claim total

itemized deductions of $34,638 for the 2000 taxable year, an

amount $243 less than $34,881 claimed on the 2000 income tax

return.   Accordingly, we sustain respondent’s determination with

respect to this issue.

Alternative Minimum Tax

      Respondent determined that petitioner is liable for an AMT

of $4,802 for the 2000 taxable year.     Section 55 imposes, in

addition to all other taxes imposed by subtitle A, an AMT on

noncorporate taxpayers.     The determination of a noncorporate

taxpayer’s AMT requires a recomputation of taxable income,

leading to a new tax base or an alternative minimum taxable

income.   Sec. 55(b)(2).    In making the recomputation, certain

(but not all) itemized deductions are not allowed, nor is the

personal exemption.   In particular, miscellaneous itemized
                                 - 7 -

deductions are not allowed in the computation of the alternative

minimum taxable income.    Sec. 56(b)(1)(A)(i).   The sum of these

disallowed items may trigger a liability for the AMT.    In the

present case, petitioner’s miscellaneous itemized deductions

alone total $33,402 after application of the 2-percent floor

under section 67.    Coupled with the other unallowable expenses,

specifically spelled out in the statute, petitioner’s AMT

liability ensues.

     Petitioner nevertheless contends that the AMT is confusing

and complex, and he is unclear as to why he is liable for the

AMT, which effectively deprives him of the benefit of his

itemized deductions.    Congress established the alternative

minimum taxable income as a broad base of income in order to tax

taxpayers more closely on their economic income, intending for

all taxpayers to pay their fair share of the overall Federal

income tax burden.     Allen v. Commissioner, 118 T.C. 1, 5 (2002).

However unfair this statute might seem to petitioner, the Court

must apply the law as written.    As this Court noted in Hays Corp.

v. Commissioner, 40 T.C. 436, 443 (1963), affd. 331 F.2d 422 (7th

Cir. 1964):   “The proper place for a consideration of

petitioner’s complaint is the halls of Congress, not here.”

Respondent, therefore, is sustained on this issue.

     Reviewed and adopted as the report of the Small Tax Case

Division.
                            - 8 -

To reflect the foregoing,

                                         Decision will be entered

                                    for respondent.
