                  T.C. Summary Opinion 2007-154



                     UNITED STATES TAX COURT



                 IBRAHIM B. KEITA, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 9596-06S.               Filed September 5, 2007.



     Ibrahim B. Keita, pro se.

     Michele E. Craythorn, 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 when the petition was filed.    Pursuant to

section 7463(b), the decision to be entered is not reviewable by

any other court, and this opinion shall not be treated as

precedent for any other case.    Unless otherwise indicated,

subsequent section references are to the Internal Revenue Code in
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effect for the year in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.

     Respondent determined a deficiency in petitioner’s 2004

Federal income tax of $3,231.   After concessions,1 the issues for

decision are:   (1) Whether petitioner is entitled to certain

deductions claimed on Schedule C, Profit or Loss From Business,

and (2) whether petitioner is entitled to certain deductions

claimed on Schedule A, Itemized Deductions.

                            Background

     Some of the facts have been stipulated and 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 Santa Rosa, California.

     Petitioner was employed as a psychiatric technician during

tax year 2004, earning wage income.     He also worked as a licensed

vocational nurse, for which he received income that he reported

on his Schedule C.

     On his 2004 Federal income tax return, petitioner reported

wages totaling $59,580, a Schedule C business loss of $15,652,

and Schedule A itemized deductions of $48,599.    Respondent issued


     1
       Petitioner conceded that he received a State income tax
refund in the amount of $269 and that he received $575 in wages
from Maxim Healthcare Services, Inc., during tax year 2004.
Petitioner also conceded that he is not entitled to his claimed
itemized deduction of $11,000 for legal fees related to defense
of a tax lien. At trial, respondent conceded that petitioner is
entitled to a $250 deduction for tax preparation fees.
                               - 3 -

petitioner a notice of deficiency in February 2006 disallowing

$11,802 of petitioner’s claimed Schedule C deductions, consisting

of $7,853 for business use of petitioner’s home, and $3,949 in

other expenses for computers, monitors, and a fax machine.    The

notice of deficiency also disallowed $19,897 of petitioner’s

itemized deductions, consisting of $9,384 in unreimbursed

employee vehicle expenses, and $11,375 in attorney’s and tax

preparation fees, reduced by 2 percent of petitioner’s adjusted

gross income.

                            Discussion

     In general, the Commissioner’s determinations set forth in a

notice of deficiency are presumed correct, and the taxpayer bears

the burden of proving that these determinations are in error.

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

Pursuant to section 7491(a), the burden of proof as to factual

matters shifts to the Commissioner under certain circumstances.

Petitioner has neither alleged that section 7491(a) applies nor

established his compliance with the requirements of section

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

and cooperate fully with respondent’s reasonable requests.

Petitioner therefore bears the burden of proof.

     Deductions are a matter of legislative grace, and the

taxpayer bears the burden of proving that he is entitled to any

deduction claimed.   INDOPCO, Inc. v. Commissioner, 503 U.S. 79,
                                   - 4 -

84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440

(1934).   The taxpayer is required to maintain records sufficient

to enable the Commissioner to determine his correct tax

liability.    Sec. 6001; Higbee v. Commissioner, 116 T.C. 438, 440

(2001); sec. 1.6001-1(a), Income Tax Regs.      Such records must

substantiate both the amount and purpose of the claimed

deductions.    Higbee v. Commissioner, supra.

I.   Schedule C Deductions

     Petitioner claimed a $15,652 Schedule C business loss for

2004 that resulted from his deducting $20,548 in business

expenses and reporting $4,896 in income.    The notice of

deficiency disallowed $7,853, the entire amount claimed for

business use of the home, and $3,949 in other expenses claimed

for computers, monitors, and a fax machine.

     A.     Business Use of Home

     Section 162(a) allows a taxpayer to deduct all ordinary and

necessary expenses paid or incurred in carrying on a trade or

business.    The taxpayer is generally precluded from deducting

expenses incurred in connection with the business use of the

residence.    See sec. 280A.   As an exception to the general rule,

section 280A(c)(1) permits the deduction of expenses allocable to

a portion of the dwelling unit which was used exclusively and

regularly (1) as a principal place of business, (2) as the place

for meeting with customers, clients, or patients in the normal
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course of business, or (3) in the case of an unattached separate

structure, in connection with the business.    The deduction cannot

exceed the gross income derived from the business use of the

residence over the sum of certain deductions allocable to such

income.   Sec. 280A(c)(5); Tobin v. Commissioner, T.C. Memo. 1999-

328; Cunningham v. Commissioner, T.C. Memo. 1996-141, affd.

without published opinion 110 F.3d 59 (4th Cir. 1997).

     In order for a taxpayer to establish use on a “regular”

basis, the business use must be more than occasional or

incidental.   Irwin v. Commissioner, T.C. Memo. 1996-490, affd.

without published opinion 131 F.3d 146 (9th Cir. 1997); Hefti v.

Commissioner, T.C. Memo. 1993-128.     A taxpayer “exclusively” uses

a portion of his dwelling unit in a trade or business if the

portion in question is not used for other than business purposes.

Irwin v. Commissioner, supra; Hefti v. Commissioner, supra.       The

use of a portion of a dwelling unit both for personal purposes

and for the carrying on of a trade or business does not meet the

exclusive use test.   See Sengpiehl v. Commissioner, T.C. Memo.

1998-23; Hefti v. Commissioner, supra.     Whether a taxpayer’s home

office is his principal place of business is dependent on the

amount of time spent at each location, and the relative

importance of the activities performed at each location.    See

Commissioner v. Soliman, 506 U.S. 168, 175 (1993).
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     Petitioner contends that he is entitled to a deduction for

business use of his home because he used his garage as a home

office for scheduling purposes, sending and receiving faxes,

keeping mileage records, and meeting with clients at times.

Although petitioner testified that he maintained his home office

for those reasons, the record does not indicate that petitioner

met with clients or patients in his garage.   Nor does the record

establish that the garage was an “unattached separate structure”.

Therefore, the claimed deductions for business use of

petitioner’s home can be sustained only if he used the garage on

a regular basis as the principal place of business for a trade or

business.

     Although petitioner may have done some work related to his

business in his home office, his principal place of business as a

licensed vocational nurse was not in his home office.   Petitioner

testified that when he was working as a licensed vocational nurse

out of his home, he received his schedule by fax at his home

office, he called the places at which he was going to work, and

then he went to the actual jobs at various hospitals in the

community.   At the hospitals, petitioner worked as a nurse, where

he sometimes supervised certified nursing assistants, dispensed

medications, and gave wound treatments.   Based on the record, we

find that petitioner’s primary place of business as a licensed

vocational nurse was not in his home where he received his work
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schedule, but at the hospitals in which he provided licensed

vocational nursing services.   To the extent that petitioner used

his home for administrative activities, he has not established

that the work at home was for the convenience of his employer.

Based on the foregoing, we hold that petitioner’s use of his

garage for scheduling and faxing does not fulfill the business

use exception of section 280A(c)(1), and petitioner is therefore

not entitled to a deduction for business use of his home.

     B.   Computers, Monitors, and Fax Machine

     At trial, petitioner tried to establish that he was entitled

to deduct $3,949 as Schedule C business expenses on his 2004 tax

return for computers, monitors, and a fax machine.   Because

petitioner’s computer and peripheral equipment do not fall within

the home office exception to section 274 under section

280F(d)(4)(B),2 they are listed property under section

280F(d)(4), and their deductibility is subject to the strict

substantiation requirements of section 274(d).

     When a taxpayer establishes that he has incurred a

deductible expense but is unable to substantiate the exact


     2
       Listed property does not include any computer or
peripheral equipment used exclusively at a regular business
establishment. Sec. 280F(d)(4)(B). Any portion of a dwelling
unit shall be treated as a regular business establishment if (and
only if) the requirements of sec. 280A(c)(1) are met with respect
to such portion. Sec. 280F(d)(4)(B). For the reasons discussed
above, petitioner’s use of his garage does not satisfy the
requirements of sec. 280A(c)(1), and therefore the computers,
monitors, and fax machine are listed property.
                                - 8 -

amount, we are generally permitted to estimate the deductible

amount.   Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir.

1930).    To apply the Cohan rule, the Court must have a reasonable

basis upon which an estimate can be made.    Vanicek v.

Commissioner, 85 T.C. 731, 742-743 (1985).   Without such a basis,

any allowance would amount to unguided largesse.    Williams v.

United States, 245 F.2d 559, 560 (5th Cir. 1957).   However, the

strict rules of substantiation that apply to certain business

deductions described in section 274(d) supersede the rule in

Cohan v. Commissioner, supra at 544.    Sanford v. Commissioner, 50

T.C. 823, 827-828 (1968), affd. per curiam 412 F.2d 201 (2d Cir.

1969); Keating v. Commissioner, T.C. Memo. 1995-101; Jeffers v.

Commissioner, T.C. Memo. 1986-285; sec. 1.274-5T(a)(4), Temporary

Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985).

     Petitioner did not provide any receipts or any other

evidence to establish when the computers, monitors, and fax

machine were purchased, or the cost of the items.   Petitioner

testified that the amount he claimed on his Schedule C for the

computers and peripheral equipment was “a little over-inflated”

and that one of the computers was not even purchased in the tax

year in issue.   There is insufficient evidence to establish that

these items were purchased during the year in issue, or to

substantiate the cost.   Accordingly, petitioner is not entitled

to a deduction for his computers, monitors, and fax machine.
                                - 9 -

II.   Schedule A Deductions

      On Schedule A of his 2004 return, petitioner claimed

itemized deductions of $48,599.   Respondent disallowed $19,897 of

this amount, which consisted of claimed unreimbursed employee

expenses of $9,384, and attorney’s and tax preparation fees of

$11,375, reduced by 2 percent of petitioner’s adjusted gross

income.

      A.   Unreimbursed Employee Expenses

      Petitioner claimed a deduction of $9,384 for his vehicle

expenses on Schedule A.   He completed Form 2106-EZ, Unreimbursed

Employee Business Expenses, and claimed that he drove 25,024

miles for business.   Petitioner provided mileage logs totaling

12,985 miles.

      Petitioner contends he worked as a licensed vocational nurse

and contracted with several agencies to work at various jobs at

hospitals in the community.   Petitioner argues that he is

entitled to a deduction for the mileage because he was traveling

from his home office to the various contracting jobs, so he was

traveling from one job to another.

      Pursuant to section 162, expenses relating to the use of an

automobile that a taxpayer pays or incurs while commuting between

the taxpayer’s residence and the taxpayer’s place of business or

employment are not deductible because such expenses are personal,

and not business expenses.    See Fausner v. Commissioner, 413 U.S.
                              - 10 -

838 (1973); Commissioner v. Flowers, 326 U.S. 465 (1946); secs.

1.162-2(e), 1.262-1(b)(5), Income Tax Regs.    Automobile mileage

deductions are also subject to the strict substantiation

requirements of section 274(d).

     Transportation expenses between a home office and another

place of business, however, may be deductible if the home office

is the taxpayer’s principal place of business.    Strohmaier v.

Commissioner, 113 T.C. 106, 113-114 (1999); Curphey v.

Commissioner, 73 T.C. 766, 777-778 (1980); Gosling v.

Commissioner, T.C. Memo. 1999-148.

     Where a taxpayer shows that his automobile expenses satisfy

the requirements of section 162 but fails to establish that his

records satisfy the heightened substantiation requirements of

section 274(d), the expenses will not be allowed.    To

substantiate such expenses, the taxpayer must provide the

following adequate records or sufficient evidence to corroborate

his own testimony:   (1) The amount of the expenditures; (2) the

mileage for each business use of the automobile and the total

mileage for all use of the automobile during the taxable period;

(3) the date of the business use; and (4) the business purpose

for the use of the automobile.    Sec. 1.274-5T(b)(6), Temporary

Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985).

     For the reasons discussed supra, petitioner’s residence was

not his principal place of business.    Even if petitioner had
                                - 11 -

established that his use of the vehicle satisfied the

requirements of section 162, the logs he provided listing the

business miles he drove do not meet the substantiation

requirements of section 274(d), because petitioner did not

provide the total mileage for all use of the automobile during

the taxable period.    Therefore, petitioner’s transportation

expenses do not meet the trade or business requirement of section

162, or the substantiation requirements of section 274(d), so he

is not entitled to deduct his transportation expenses as Schedule

A unreimbursed employee expenses.

       B.   Tax Preparation Fees

       A taxpayer may be allowed a deduction for ordinary and

necessary expenses paid or incurred during the taxable year in

connection with the determination, collection, or refund of any

tax.    Sec. 212(3).   Petitioner claimed a deduction for tax

preparation fees of $375 as a miscellaneous deduction on Schedule

A.   At trial, respondent conceded that petitioner was allowed

$250 of the claimed deduction, so we do not further address this

amount.

       Petitioner claims that he purchased Turbo Tax software for

$125 to prepare his return for tax year 2003, after his taxes

were not prepared satisfactorily by a professional tax preparer.

Petitioner admitted at trial that he did not know how much Turbo

Tax cost and that the $125 was an estimate.    Petitioner presented
                                - 12 -

no evidence to support the claimed deduction for the purchase of

tax preparation software.

       As discussed supra, when a taxpayer establishes that he has

incurred a deductible expense but is unable to substantiate the

exact amount, the Cohan doctrine permits the Court to estimate

the deductible amount.     Cohan v. Commissioner, 39 F.2d at 543-

544.    The Court must, however, have a reasonable basis upon which

an estimate can be made.    Vanicek v. Commissioner, 85 T.C. at

742-743.    Because the record contains no evidence upon which we

could base an estimate, we conclude that petitioner is not

entitled to the remaining $125 deduction claimed for tax

preparation fees, and respondent’s determination with regard to

this amount is sustained.

       To reflect the foregoing and the concessions made by the

parties,


                                      Decision will be entered

                                 under Rule 155.
