                        T.C. Memo. 2010-116



                      UNITED STATES TAX COURT



                  DIANE LYNN HELLER, Petitioner v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 17091-08.               Filed May 27, 2010.



     Diane Lynn Heller, pro se.

     Anna A. Long, for respondent.



                         MEMORANDUM OPINION


     COHEN, Judge:   Respondent determined deficiencies and

additions to tax as follows:

                                              Addition to Tax
     Year            Deficiency               Sec. 6651(a)(1)

     2003               $956                     $238.05
     2004              1,195                      345.16
     2005                873                      218.25
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The issues for decision are whether petitioner is entitled to

business expense deductions that respondent disallowed and

whether she is liable for an addition to tax under section

6651(a)(1) for each of the years in issue.     All section

references are to the Internal Revenue Code in effect for the

years in issue, and all Rule references are to the Tax Court

Rules of Practice and Procedure.

                             Background

     The only evidence in the record has been stipulated, and the

stipulated facts are incorporated as our findings by this

reference.   Petitioner resided in La Quinta, California, at the

time her petition was filed.

     Petitioner’s Federal income tax returns for 2003, 2004, and

2005 were all filed late, being mailed on March 22, 2006, April

22, 2006, and April 18, 2007, respectively.     Petitioner claimed

that the late filings resulted because she was in several

accidents that caused injuries and a “prolonged rehabilitation

and recovery.”    A Schedule C, Profit or Loss From Business, for

petitioner’s self-employment as an occupational therapist was

attached to each of those returns.      She reported gross receipts

of $50,923, $49,480, and $40,064 for 2003, 2004, and 2005,

respectively.    On each of the Schedules C, petitioner claimed

deductions for car and truck expenses that were based solely on

alleged business mileage for three cars.     The amounts claimed for
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car and truck expenses were $16,074, $17,122, and $23,109 for

2003, 2004, and 2005, respectively.     In addition, for 2003,

petitioner deducted $4,275 in travel expenses and $10,465 in

“other expenses” on Schedule C.   She deducted $5,041 and $5,651

for travel expenses in 2004 and 2005, respectively.

     The Internal Revenue Service examined petitioner’s returns.

During the examination, some of the deductions were disallowed

and other deductions were increased.     All of the travel expenses

were disallowed for lack of substantiation.     Of the “other

expenses” claimed for 2003, $319 was disallowed.     Of the car and

truck expenses claimed, $1,800 was disallowed for 2003, $1,825

was disallowed for 2004, and $6,909 was disallowed for 2005.

     The petition was filed on July 11, 2008.     Petitioner

requested Los Angeles, California, as the place of trial.       By

notice served February 19, 2009, the case was set for trial in

Los Angeles on July 20, 2009.   Petitioner moved for a continuance

on various grounds, including that her records were in storage in

La Quinta, California, and the desert heat, among other things,

made retrieval at that time impracticable.     Respondent objected

on the ground that petitioner had failed to retrieve or produce

records during the months after the notice of trial was sent, but

the Court agreed to continue the case to the October 26, 2009,

Los Angeles session, advising petitioner that she was obligated

to get the records, to produce them to respondent, and to
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stipulate facts that could be agreed.    Petitioner complained to

the Court about the examination process in which she and her tax

return preparer had participated, but she was advised that the

conduct of the audit was not relevant.

     On October 12, 2009, petitioner sent to the Court a motion

requesting another 6-month continuance, stating that she had

provided some records but respondent requested more.     Petitioner

set forth other personal reasons for a continuance.    Again

respondent objected to the continuance.   The Court indicated that

the motion would be considered only if a stipulation was filed on

or before the trial date and that petitioner would be allowed

limited additional time to produce records substantiating her

travel expenses.   The stipulation of facts was filed October 21,

2009.   On October 26, the Court took under advisement

petitioner’s motion to continue and ordered the parties to report

to the Court on or before November 30, 2009.

     Respondent’s status report was filed November 30, 2009, and

indicated that petitioner had failed to provide any additional

documentation beyond that attached to the stipulation of facts.

Petitioner failed to file a status report and had not, as

required in relation to each of the two prior trial settings,

submitted a pretrial memorandum identifying any witnesses or

testimony that would be offered at trial.   Thus, by order dated

December 23, 2009, the Court denied the motion to continue and
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ordered the case submitted on the then-existing record.    See Rule

123(a).   The Court further ordered respondent to file a

memorandum brief explaining why the documentation attached to the

stipulation is inadequate to substantiate any deductions not

conceded and addressing any other issues remaining in the case.

Petitioner was directed to file an answering brief, which she did

on March 15, 2010.   At no time did petitioner tender any evidence

beyond the stipulation filed October 21, 2009.

                            Discussion

     Petitioner bears the burden of proving that the deductions

in dispute are ordinary and necessary business expenses under

section 162(a).   See INDOPCO, Inc. v. Commissioner, 503 U.S. 79,

84 (1992); Rockwell v. Commissioner, 512 F.2d 882, 886 (9th Cir.

1975), affg. T.C. Memo. 1972-133.   Petitioner has not even

identified the $319 in “other expenses” disallowed for 2003.

With respect to the car and truck expenses and travel expenses,

she must substantiate by adequate records or other evidence the

time, place, and business purpose of each item of expense in

accordance with sections 274(d)(1) and (4) and 280F(d)(4).

     As respondent points out, petitioner did not produce any

mileage log for 2005.   The logs that she produced for 2003 and

2004 do not appear to be contemporaneously created, do not

contain the required information, contain obvious errors, do not

coincide with the amounts claimed, and do not allow for
                               - 6 -

allocation between business and personal use of the vehicles; the

logs are not reliable.   Maintenance records produced with respect

to two vehicles do nothing more than reflect mileage on

particular dates; they are not helpful.   Nonetheless, most of the

mileage petitioner claimed on her returns was allowed during the

examination.   She has not shown that she is entitled to deduct

any further amounts.

     In relation to travel expenses claimed for 2003, petitioner

presented a bill from the Imperial Palace Hotel & Casino in Las

Vegas, Nevada, that does not show the year incurred and a

statement from the Four Seasons Resort in Santa Barbara,

California, for a one-night room charge of $2,305, plus tax and a

lounge charge.   There is no corroborating detail or evidence of

the business purpose of these expenses.   Petitioner presented no

evidence with respect to the travel expenses claimed for 2004 or

2005.   Thus, she cannot be allowed any additional deductions.

     Petitioner’s answer to respondent’s brief does not address

either the law or the specific inadequacies of her proof.   She

asserts, without evidentiary basis, that late filing of her

returns was due to injuries she suffered from 2002 to 2005.   She

makes other arguments about the examination process, but she was

told when the case was first called for trial that what allegedly

occurred during the audit was not relevant to what we determine
                                - 7 -

here.   See Greenberg’s Express, Inc. v. Commissioner, 62 T.C.

324, 327 (1974).

     Although respondent has the burden of production under

section 7491(c) with respect to the additions to tax, that burden

has been satisfied by the stipulation that the returns were not

timely.    Petitioner has the burden of showing that the late

filing was due to reasonable cause and not due to willful

neglect.    See, e.g., Higbee v. Commissioner, 116 T.C. 438, 446

(2001).    Illness or incapacity may constitute reasonable cause if

a taxpayer establishes that she was so ill that she was unable to

file the returns on time.    See Williams v. Commissioner, 16 T.C.

893, 906 (1951).

     In her answering brief related to the claims of automobile

expense, petitioner asserts:    “The nature of the therapy

rehabilitation service business petitioner has been in for 45

years requires the therapist to use a car all day long going from

home to home and to hospitals, nursing homes and assisted living

facilities as well as the ordering agencies.”    Even if

petitioner’s claims of disability were in evidence, they are

contradicted by her claims of business mileage in relation to her

Schedule C business and by her substantial earnings during the

years in issue.    We are not persuaded that she was unable to file

timely returns in 3 consecutive years when she was successfully

pursuing her occupation.    See, e.g., Judge v. Commissioner, 88
                               - 8 -

T.C. 1175, 1190 (1987); Jordan v. Commissioner, T.C. Memo. 2005-

266 (and cases cited therein); Bear v. Commissioner, T.C. Memo.

1992-690, affd. without published opinion 19 F.3d 26 (9th Cir.

1994).   The section 6651(a)(1) additions to tax will be

sustained.

     For the reasons explained above,


                                            Decision will be entered

                                       for respondent.
