                          T.C. Memo. 1998-446



                      UNITED STATES TAX COURT



                  BERNARD BOOZER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 5242-97.                 Filed December 23, 1998.



     Bernard Boozer, pro se.

     Carol E. Schultze, for respondent.



                          MEMORANDUM OPINION


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

section 7443A(b)(3) and Rules 180, 181, and 182.    All section

references are to the Internal Revenue Code in effect for the

year in issue.   All Rule references are to the Tax Court Rules of

Practice and Procedure.    Respondent determined a deficiency in
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petitioner's 1991 Federal income tax in the amount of $5,619 and

an addition to tax under section 6651(a)(1) in the amount of

$881.

     After concessions, the remaining stipulated issues for

decision are: (1) Whether the Tax Court has jurisdiction to

determine whether petitioner's 1991 tax deficiency was discharged

in bankruptcy, (2) if we do have jurisdiction to decide the

dischargeability issue, whether the bankruptcy proceeding

discharged petitioner's 1991 Federal income tax deficiency,

(3) whether petitioner is entitled to a bad debt deduction in the

amount of $2,626, and (4) whether petitioner is entitled to a

deduction for rent in the amount of $4,800.    The parties did not

favor us with a complete copy of the underlying adjustments.     The

issues set forth above are from the Stipulation of Agreed Issues.

     Some of the facts have been stipulated and are so found.

Petitioner resided in Central Square, New York, at the time his

petition was filed.

     During the taxable year at issue, petitioner was employed as

a professor by the State University of New York at Oswego

(S.U.N.Y. Oswego).    Petitioner taught classes 2 days a week.

     Prior to 1991, petitioner and his family lived in Central

Square, New York.    Central Square is located near S.U.N.Y.

Oswego.
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     Apparently prior to 1991, petitioner moved to Delhi, New

York, approximately 250 miles from Central Square.    During 1991,

petitioner, his wife, and his daughter resided in a rental house

in Delhi.   Sometime in 1991, petitioner's wife obtained

employment in Delhi.    Petitioner stayed in Delhi 5 days a week

and worked in his businesses.    He taught in Oswego, New York, 2

days a week.

     On Schedules C, petitioner reported total losses of

$18,710.62 from the following businesses:    Cobra Productions, a

video tape production/distribution business; Paradise Therapy

(Paradise), a mental health therapy business; Dr. Bernard Boozer

(Boozer), a management consultant business; and Charley's, a

restaurant.    On his Schedule C for Paradise, petitioner, inter

alia, claimed a deduction for bad debts from sales or services in

the amount of $2,625.90.    On his Schedule C for Boozer,

petitioner, inter alia, claimed a deduction for rent or lease of

other business property in the amount of $4,800.

     On or about April 15, 1992, petitioner requested, and was

granted, an extension of time to file his 1991 return by August

15, 1992.   On May 24, 1993, respondent mailed to petitioner a

Request For Your Tax Return for tax period ending December 31,

1991, because respondent's records showed that petitioner had not

filed a tax return, Form 1040, U.S. Individual Income Tax Return

for 1991.   On April 18, 1994, petitioner filed his 1991 return.
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     On February 14, 1995, petitioner filed a petition to

commence a bankruptcy proceeding under chapter 7 of the

Bankruptcy Code, 11 U.S.C. (1994).       The petition was filed in the

U.S. Bankruptcy Court for the District of Maryland.

     On May 26, 1995, a discharge order was entered in the

bankruptcy proceeding which provided, in pertinent part, as

follows:

     1.    The above-named debtor is released from all
           dischargeable debts.

     2.    Any judgment heretofore or hereafter obtained in any
           court other than this court is null and void as a
           determination of the personal liability of the debtor
           with respect to any of the following:

            (a)   debts dischargeable under 11 U.S.C. Sec. 523;

            (b)   unless heretofore or hereafter determined by order
                  of this court to be nondischargeable, debts
                  alleged to be excepted from discharge under
                  clauses (2), (4), (6), and (15) of 11 U.S.C. Sec.
                  523(a);

            (c)   debts determined by this court to be discharged.

     3.    All creditors whose debts are discharged by this order
           and all creditors whose judgments are declared null and
           void by paragraph 2 above are enjoined from instituting
           or continuing any action or employing any process or
           engaging in any act to collect such debts as personal
           liabilities of the above-named debtor.


     The record does not disclose whether respondent filed a

proof of claim in the bankruptcy proceeding or whether the

parties made an attempt to litigate the merits or
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dischargeability of the tax deficiency in the bankruptcy

proceeding.

     On December 19, 1996, respondent mailed a statutory notice

of deficiency to petitioner for his 1991 taxable year.    The

deficiency apparently resulted from disallowances of certain

claimed deductions related to petitioner's businesses.    On March

11, 1997, petitioner timely filed a petition to this Court.

     The Tax Court is a court of limited jurisdiction, and its

powers may not exceed those conferred by statute.    Sec. 7442;

Magazine v. Commissioner, 89 T.C. 321, 326 (1987); Burns, Stix

Friedman & Co. v. Commissioner, 57 T.C. 392, 396 (1971).    This

Court lacks the requisite subject matter jurisdiction to decide

whether a taxpayer's deficiency was discharged in a bankruptcy

proceeding.    Neilson v. Commissioner, 94 T.C. 1, 9 (1990).

     As a general rule, this Court's jurisdiction to consider tax

matters depends on a notice of deficiency and a timely filed

petition.    Secs. 6212 and 6213; Rule 13; Neilson v. Commissioner,

supra.    The redetermination of an income tax deficiency has

"nothing to do with collection of the tax nor any similarity to

an action for collection of a debt, nor does it involve any other

rights and remedies of the sort traditionally enforced in an

action at law."    Swanson v. Commissioner, 65 T.C. 1180, 1184

(1976).    Accordingly, although we lack jurisdiction to determine

whether petitioner's deficiency had been discharged in
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bankruptcy, we have the requisite jurisdiction to redetermine the

merits of that deficiency.

     Section 166(a) generally allows a deduction for any bona

fide debt that becomes worthless during the taxable year.    Bad

debts may be characterized as either business bad debts or

nonbusiness bad debts.   Sec. 166(d).   Worthless debts arising

from unpaid fees shall not be allowed as a deduction under

section 166 unless the income such item represents has been

included in the return of income for the year for which the

deduction as a bad debt is claimed or for a prior taxable year.

Gertz v. Commissioner, 64 T.C. 598, 600 (1975); O'Meara v.

Commissioner, 8 T.C. 622, 633 (1947); sec. 1.166-1(e), Income Tax

Regs.

     The parties stipulated that the amount at issue with respect

to the bad debt deduction is $2,626.    This was the rounded off

amount of the bad debt claimed on petitioner's Schedule C for

Paradise.   At trial, petitioner stated that he believed "the

correct figure should be the amount of the services provided,

which is, in fact, $5,000."   We hold the parties to their

stipulation, and use the stipulated amount of $2,626 with respect

to this issue.   This amount purportedly represents a fee for

services petitioner rendered to a client.    Petitioner contends

that he included the $2,626 in income in a prior year but he was
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never paid his fee.    Thus, petitioner contends that he is

entitled to a bad debt deduction for this amount.    We disagree.

       On this record, there is no evidence whatsoever to support a

finding that petitioner included in gross income the $2,626 in

unpaid fee in either 1991, the year for which the deduction as a

bad debt was claimed, or for a prior taxable year.    Thus, because

we find that petitioner did not include the $2,626 in income,

petitioner is not entitled to a bad debt deduction under section

166.    Gertz v. Commissioner, supra.

       Finally, we must decide whether petitioner is entitled to a

deduction for rental payments for petitioner's house in Delhi in

the amount of $4,800.    Although petitioner claimed the rental

payments on his Schedule C for Boozer, petitioner's management

consultant business, petitioner contends that the rental payments

were related to his mental health therapy business.    Petitioner

never explained why he failed to claim the rental payments on his

Schedule C for Paradise, his mental health therapy business.

       Section 162 allows a deduction for ordinary and necessary

traveling expenses (including amounts expended for meals and

lodging) incurred by a taxpayer while away from home in the

pursuit of a trade or business.    This provision is an exception

to the general rule under section 262 which states that personal,

living, or family expenses are not deductible.    Under section

162, a taxpayer must satisfy all of the following conditions:
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(1) The expense must have been ordinary and necessary, (2) the

expense must have been incurred while petitioner was "away from

home", and (3) petitioner must have incurred the expense in the

pursuit of his business.   Commissioner v. Flowers, 326 U.S. 465,

470 (1946).

     The Court of Appeals for the Second Circuit, to which an

appeal in this case would lie, has defined "home" for purposes of

section 162(a)(2) to mean the taxpayer's permanent abode or

residence rather than his business headquarters.   Six v. United

States, 450 F.2d 66, 69 (2d Cir. 1971); Rosenspan v. United

States, 438 F.2d 905 (2d Cir. 1971).

     Petitioner contends that he is entitled to a deduction for

the rental payments for his Delhi house, which he claims is

temporary, and in which petitioner, his wife, and their daughter

resided.

     After a review of the record, we conclude that petitioner is

not entitled to a deduction for rental payments because

petitioner did not incur such expense while away from home.

Petitioner, his wife, and his daughter resided in Delhi

throughout 1991.   Petitioner testified that although he still

owned the house in Central Square, neither he nor his family

resided there during any part of 1991 and that his home was in

Delhi.   In fact, petitioner stated that when he taught classes at

S.U.N.Y. Oswego, he did not stay at the house in Central Square.
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Instead, petitioner stated that he "stayed at a friend's place".

Further, petitioner stated that the house in Central Square was

unoccupied and "was just sitting there in 1991."   Thus, we

conclude that petitioner's house in Delhi where he and his family

resided was his residence as defined by the Court of Appeals for

the Second Circuit.

     Therefore, petitioner was not "away from home" for purposes

of section 162.   Accordingly, respondent is sustained on this

issue.

                                         Decision will be entered

                                    under Rule 155.
