                       T.C. Memo. 1996-562



                     UNITED STATES TAX COURT



                 MARIO R. SANHUDO, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12089-95.           Filed December 30, 1996.



     Mario R. Sanhudo, pro se.

     Blaise G. Dusenberry and Randall B. Pooler, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION



     PANUTHOS, Chief Special Trial Judge:    This case was heard

pursuant to the provisions of section 7443A(b)(3) and Rules 180,

181, and 182.1

     1
        All section references are to the Internal Revenue Code
in effect for the tax years at issue. All Rule references are to
the Tax Court Rules of Practice and Procedure.
                                 - 2 -

     Respondent determined deficiencies in petitioner's Federal

income taxes for the taxable years 1991 through 1993 as follows:

                 Year                    Deficiency

                 1991                      $1,274
                 1992                       1,120
                 1993                       1,568

     The issue for decision is whether petitioner may deduct

claimed employee business expenses for the years in issue.

                           FINDINGS OF FACT

     Some of the facts have been stipulated, and they are so

found.    The stipulation and the attached exhibits are

incorporated herein by this reference.       At the time of filing the

petition herein, petitioner resided at Cape Canaveral, Florida.

     During the years in issue petitioner was a civilian mariner

assigned to the ship USNS Vanguard T-AG 194 with a port at Cape

Canaveral, Florida.     The ship was part of the Military Sealift

Command (MSC).    MSC is part of the U.S. Department of Defense

and, specifically, the U.S. Navy.     Civilian employees operate,

maintain, and navigate the vessel to various locations as

designated by the Navy.     The USNS Vanguard is operated by a

private company under contract with the U.S. Navy.      Petitioner

worked as an engineer on the USNS Vanguard during the years in

issue.

     During 1991 through 1993, petitioner apparently incurred

living, automobile, and travel expenses while the ship was in

port.    On his Federal income tax returns for the years in issue,
                              - 3 -

petitioner claimed employee business expenses (prior to the

limitation provided by section 67(a)) as follows:

                    Year              Amount

                    1991              $9,023
                    1992               8,491
                    1993               9,530

The returns in issue were prepared by Space Coast Bookkeeping and

Taxes, Inc. (Space Coast).

     In the notice of deficiency, respondent disallowed the

claimed employee business expense deductions.   At trial

respondent conceded that the itemized deductions claimed by

petitioner were incurred and paid.    Respondent also conceded that

petitioner is entitled to a portion of the claimed deductions.2

                             OPINION

     Respondent asserts that petitioner has failed to establish

that the claimed expenses, over and above those allowed, are

ordinary and necessary business expenses incurred while carrying

on petitioner's trade or business as an employee.   Petitioner

argues that the Internal Revenue Service (IRS) acted unfairly in

examining his returns, and that the examination was the result of




     2
        Respondent agreed that petitioner is entitled to deduct
60 percent of the claimed automobile expenses for each of the
years in issue. Also respondent agreed that petitioner is
entitled to deduct $510, $501, and $510 for the taxable years
1991, 1992, and 1993 respectively, relating to claimed employee
business expenses other than vehicle, parking fee, toll, and
travel expenses.
                                 - 4 -

an investigation of his return preparer, Space Coast.    Petitioner

also complains that the IRS failed to respond to his inquiries.

       The determinations of the Commissioner in a notice of

deficiency are presumed correct, and the burden of proof is on

the taxpayer to show that the determinations are incorrect.    Rule

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

are a matter of legislative grace, and petitioner bears the

burden of proving entitlement to any claimed deductions.    New

Colonial Ice Co. v. Helvering, 292 U.S. 435 (1934).

     Section 162(a) permits a deduction for "ordinary and

necessary" expenses incurred while carrying on a trade or

business.   Since petitioner is an employee, any deductions to

which he might be entitled would be included as employee expense

deductions on Schedule A.   Primuth v. Commissioner, 54 T.C. 374,

377 (1970).

     Petitioner has failed in his burden of proof.    Petitioner

did not present any documents or testimony in this case upon

which we can make a finding that there was a business purpose to

the claimed employee expenses.    In fact, petitioner testified

that some of the expenses related to visiting family members.

Thus, there is no question but that some of the claimed expenses

are personal in nature and nondeductible.    Sec. 262.

     With respect to petitioner's complaints that he was unfairly

selected for examination, we note that the Commissioner, in an

attempt to ascertain the correctness of a taxpayer's return, may
                                 - 5 -

examine any books, papers, records, or other data which may be

relevant to such an inquiry.    Sec. 7602(a).   Petitioner cites no

specific authority as a basis for his position, simply alleging

that it is improper for the Commissioner to examine taxpayers

based solely upon their connection with a particular preparer.

Respondent's decision to examine petitioner's return, even if

based solely upon petitioner's connection with Space Coast, does

not constitute an improper reason to select petitioner's return

for examination.     Karme v. Commissioner, 673 F.2d 1062 (9th Cir.

1982), affg. 73 T.C. 1163 (1980).    Petitioner, therefore, has not

established that his selection for examination was improper.

     We understand petitioner's frustration in circumstances

where the IRS failed to timely respond to inquiries.

Nevertheless, such a failure by the IRS does not alter the

obligation of petitioner to satisfy the Court that the claimed

expenses qualify as employee business expenses.       Petitioner has

failed to do that.

     Based on the foregoing, respondent's determination is

sustained except to the extent respondent made concessions at

trial.

                                         Decision will be entered

                                    under Rule 155.
