                               T.C. Memo. 2016-39



                         UNITED STATES TAX COURT



        CHARLES E. BROWN AND CONNIE E. BROWN, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 18360-14.                         Filed March 3, 2016.



      Charles E. Brown and Connie E. Brown, pro sese.

      Lewis A. Booth, II, for respondent.



            MEMORANDUM FINDINGS OF FACT AND OPINION


      COHEN, Judge: Respondent determined a deficiency of $4,018 in

petitioners’ Federal income tax for 2010. After concessions, the issues for

decision are whether petitioners are entitled to medical expense or charitable

contribution deductions beyond those allowed in the statutory notice or conceded

by respondent after trial. All section references are to the Internal Revenue Code
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[*2] in effect for the year in issue, and all Rule references are to the Tax Court

Rules of Practice and Procedure.

                               FINDINGS OF FACT

      Petitioners resided in Texas when they filed their petition. During 2010,

Charles Brown (petitioner) was the founder/pastor of the William Temple Church

of God in Christ, Inc. He received a salary of $50,799.32 that year. On their 2010

Federal income tax return, petitioners claimed itemized deductions totaling

$51,364, including deductions for medical insurance premiums of $12,944 and

charitable contributions of $19,224. Upon examination of the return the Internal

Revenue Service allowed a deduction for $4,227 of contributions but disallowed

the medical expense deduction because the substantiated amount of $3,844 was

less than 7.5% of petitioners’ adjusted gross income.

                                      OPINION

      Petitioners bear the burden of proving entitlement to the deductions that

they claim. See Rule 142(a); New Colonial Ice Co. v. Helvering, 292 U.S. 435,

440 (1934); Rockwell v. Commissioner, 512 F.2d 882, 886 (9th Cir. 1975), aff’g

T.C. Memo. 1972-133.

       After trial respondent conceded an $8,629.50 deduction for Connie E.

Brown’s portion of health insurance premiums deducted from petitioner’s
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[*3] compensation. That amount was inferred from partial records of petitioner’s

compensation from his church, which showed only certain amounts designated as

“health”. There is no evidence that reliably substantiates that any specific amount

shown on the partial records was actually paid as deductible premiums for Mrs.

Brown’s health insurance. Amounts shown on the exhibits petitioners rely on

were inconsistent with each other and with petitioners’ tax return. Without more

we cannot allow any amount greater than that conceded by respondent.

      Respondent declined to allow any additional deduction for charitable

contributions because the records that petitioner produced were all self-generated

and were not supported by contemporaneous receipts or bank records satisfying

the special rules set forth in section 170(f)(8) and (17), applicable to charitable

contributions. The relevant portions of those sections provide:

            SEC. 170(f). Disallowance of Deduction in Certain Cases and
      Special Rules.--

             *        *        *        *         *        *        *

                   (8) Substantiation requirement for certain
             contributions.--

                          (A) General rule.--No deduction shall be allowed
                    under subsection (a) for any contribution of $250 or
                    more unless the taxpayer substantiates the contribution
                    by a contemporaneous written acknowledgment of the
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[*4] contribution by the donee organization that meets
the requirements of subparagraph (B).

      (B) Content of acknowledgement.--An
acknowledgement 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.

      For purposes of this subparagraph, the term
      “intangible religious benefit” means any intangible
      religious benefit which is provided by an
      organization organized exclusively for religious
      purposes and which generally is not sold in a
      commercial transaction outside the donative
      context.

      (C) Contemporaneous.--For purposes of
subparagraph (A), an acknowledgment shall be
considered to be contemporaneous if the taxpayer
obtains the acknowledgment on or before the earlier of--
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                           [*5] (i) the date on which the taxpayer files a
                           return for the taxable year in which the
                           contribution was made, or

                                  (ii) the due date (including extensions) for
                           filing such return.

             *         *       *        *        *         *        *

                   (17) Recordkeeping.--No deduction shall be allowed
             under subsection (a) for any contribution of a cash, check, or
             other monetary gift unless the donor maintains as a record of
             such contribution a bank record or a written communication
             from the donee showing the name of the donee organization,
             the date of the contribution, and the amount of the contribution.

       Petitioners contend that their contributions were all made in cash.

However, they did not produce any receipts purporting to acknowledge cash

contributions until after respondent’s pretrial memorandum was filed. Petitioners’

niece testified at trial purporting to acknowledge the cash contributions, but the

receipts did not appear to be contemporaneous records. Ten of the receipts

reflected amounts in excess of $250 and totaled $4,700, and no acknowledgment

satisfying the requirements of section 170(f)(8) was provided. The total of the

amounts shown on the receipts provided did not equal the amount claimed on

petitioners’ return.

      Despite requests by respondent over many months before trial, petitioners

did not produce any bank records showing cash withdrawals consistent with the
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[*6] level of contributions claimed. The amounts of cash contributions that

petitioners claimed to have made during certain short periods are improbable, and

there is no independent verification of the authenticity of the receipts or the

reliability of what they purport to show. Most significantly, neither petitioner nor

Mrs. Brown testified under oath that they in fact made the cash contributions

claimed.

      We are not persuaded that the claimed cash contributions have been

substantiated as required by law. No further deductions may be allowed. To

reflect the concessions made by respondent,


                                                  Decision will be entered

                                           under Rule 155.
