                           T.C. Memo. 1996-461



                         UNITED STATES TAX COURT


            ALONZO BRADLEY AND EMMA J. BRADLEY, Petitioners v.
               COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 4554-95.                Filed October 15, 1996.


        Alonzo Bradley and Emma J. Bradley, pro sese.

        David E. Whitcomb, for respondent.


                            MEMORANDUM OPINION

        DEAN, Special Trial Judge:   This case was assigned pursuant

to the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1




        1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year at issue. All
Rule references are to the Tax Court Rules of Practice and
Procedure.
                               -2-

     Respondent determined a deficiency in petitioners' 1991

Federal income tax in the amount of $2,385 and an addition to tax

under section 6651(a)(1) in the amount of $100.

     The issues for decision are:    (1) Whether petitioners may

deduct vehicle expenses as unreimbursed employee business

expenses in excess of the amount allowed by respondent; (2)

whether petitioners may deduct uniform expenses as unreimbursed

employee business expenses; (3) whether petitioners are entitled

to a charitable contribution deduction in excess of the amount

allowed by respondent; and (4) whether petitioners are liable for

the section 6651(a)(1) addition to tax for failure to file timely

their 1991 Federal income tax return.

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

The stipulation of facts and the attached exhibits are

incorporated herein by reference.    Petitioners, Alonzo and Emma

J. Bradley, are husband and wife.    They resided in League City,

Texas, at the time their petition in this case was filed.

Background

     During the 1991 taxable year, petitioner Alonzo Bradley was

employed as a software engineer for Paramax Systems Corporation

(Paramax), an affiliate of Unisys Corporation, in Houston, Texas.

Mr. Bradley's office at Paramax was located at 600 Gemini.

Paramax required Mr. Bradley to use his own car to travel

frequently between his office at 600 Gemini and another facility

located at the Johnson Space Center.
                                 -3-

     During 1991, Paramax had in effect a policy that would have

allowed Mr. Bradley to be reimbursed for all of his travel

between the two locations at the rate of 27 cents per mile.

Mr. Bradley, however, did not file a claim for reimbursement with

Paramax and was not reimbursed for any of his travel between the

two locations.    Instead, he claimed a $9,143 deduction for

unreimbursed employee business expenses on Schedule A and Form

2106 (Employee Business Expenses) attached to petitioners' 1991

Form 1040.    Mr. Bradley calculated the deduction by taking the

product of his actual vehicle expenses for 1991 and the business

use percentage of his automobile.      The deduction was calculated

as follows:


Expenses
Gasoline, oil, repairs, vehicle insurance, etc.            $2,787
Lease payments on a 1991 Infiniti, Model Q45               10,090
     Total                                                 12,877
                                                              1
           Multiplied by business use percentage               71%
     Vehicle expense claimed                                9,143
     1
      Business use percentage = 9,968 business use miles / 14,039
total miles = 71%.

     During the first 6 months of 1991, petitioner Emma Bradley

was employed as a nurse at Friendswood Medical Arts (Friendswood)

in Friendswood, Texas.    Friendswood did not require Mrs. Bradley

to travel as part of her duties.    During the last 6 months of

1991, Mrs. Bradley was employed as a nurse at Gastroenterology

Consultants (Gastroenterology) in Houston, Texas.     Mrs. Bradley

was required to use her own car to travel between offices as part
                                -4-

of her duties at Gastroenterology, and she was compensated for

such travel at the rate of 27 cents per mile.   However,

Mrs. Bradley also claimed a $3,549 deduction for her vehicle

expenses as an unreimbursed employee business expense on Schedule

A and Form 2106 (Employee Business Expenses) attached to

petitioners' 1991 Form 1040.   Mrs. Bradley calculated the

deduction by taking the product of her actual vehicle expenses

for 1991 and the business use percentage of her automobile.      The

deduction was calculated as follows:

Expenses
Gasoline, oil, repairs, vehicle insurance, etc.            $1,283
Depreciation expense                                        2,660
     Total                                                  3,943
                                                              1
           Multiplied by business use percentage               90%
     Vehicle expense claimed                                3,549
     1
      Business use percentage = 11,428 business use miles /
12,698 total miles = 90%.

     Mrs. Bradley also claimed a $375 deduction for the cost and

maintenance of uniforms as an unreimbursed employee business

expense on Schedule A and Form 2106 attached to petitioners' 1991

Form 1040.

     Finally, petitioners also claimed a $4,640 deduction for

charitable contributions on Schedule A.   Petitioners presented

receipts or canceled checks for only $205 of this amount.

     Respondent determined that petitioners could deduct only

$1,773 of their claimed vehicle expenses.   The remaining expenses

were not deductible because petitioners could have been or

actually were reimbursed for such expenses.   Alternatively,
                                  -5-

respondent determined that such expenses were not substantiated.

Respondent disallowed the deduction for the cost and maintenance

of uniforms as not being an ordinary and necessary business

expense.     Respondent disallowed all but $5 of petitioners'

charitable contribution deduction for lack of substantiation.

Finally, respondent determined that because petitioners did not

file their 1991 Federal income tax return until July 24, 1992,

they were liable for the late filing addition to tax under

section 6651(a)(1).

Discussion

       Respondent's determinations are presumed correct, and

petitioners bear the burden of proving otherwise.     Rule 142(a);

Welch v. Helvering, 290 U.S. 111, 115 (1933).     Moreover,

deductions are a matter of legislative grace, and petitioners

bear the burden of proving that they are entitled to any

deduction claimed.     Rule 142(a); New Colonial Ice Co. v.

Helvering, 292 U.S. 435, 440 (1934); Welch v. Helvering, supra at

115.    This includes the burden of substantiation.   Hradesky v.

Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam 540 F.2d

821 (5th Cir. 1976).

1.   Employee Business Expenses

       a.   Vehicle Expenses

       Petitioners claim deductions for their vehicle expenses as

unreimbursed employee business expenses.     Section 162(a) allows a

deduction for all ordinary and necessary expenses incurred in
                                  -6-

carrying on a trade or business.    However, petitioners are not

entitled to deduct expenses under section 162(a) for which they

have been or could have been reimbursed.     Orvis v. Commissioner,

788 F.2d 1406 (9th Cir. 1986) (deduction not allowable to the

extent that the employee is entitled to reimbursement from the

employer), affg. T.C. Memo. 1984-533; Lucas v. Commissioner, 79

T.C. 1, 7 (1982) (same); Kennelly v. Commissioner, 56 T.C. 936,

943 (1971) (same), affd. without published opinion 456 F.2d 1335

(2d Cir. 1972).

     In order to deduct unreimbursed vehicle expenses,

petitioners must also substantiate the expenses in accordance

with the provisions of section 274.     Section 274(d)(4) provides

that no deduction is allowable with respect to listed property,

as defined in section 280F(d)(4), unless the deductions are

substantiated in accordance with the strict substantiation

requirements of section 274(d) and the regulations promulgated

thereunder.   Included in the definition of listed property in

section 280F(d)(4) is any passenger automobile.    Sec.

280F(d)(4)(A)(i).

     To substantiate a deduction attributable to listed property,

a taxpayer must maintain adequate records or present

corroborative evidence to show:    (1) The amount of the expense,

(2) the time and place of use of the listed property, and (3) the

business purpose for the use.   Sec. 1.274-5T(b)(6), Temporary

Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985).
                                 -7-

     In order to substantiate a deduction by means of adequate

records, a taxpayer must maintain a diary, a log, or a similar

record, and documentary evidence that, in combination, are

sufficient to establish each element of each expenditure or use.

Sec. 1.274-5T(c)(2)(i), Temporary Income Tax Regs., 50 Fed. Reg.

46017 (Nov. 6, 1985).    To be adequate, a record must generally be

written.    Each element of an expenditure or use that must be

substantiated should be recorded at or near the time of that

expenditure or use.    Sec. 1.274-5T(c)(2)(ii)(A), Temporary Income

Tax Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985).

     Thus, under section 274(d) no deduction may be allowed for

expenses incurred for use of a passenger automobile on the basis

of any approximation or the unsupported testimony of the

taxpayer.    Golden v. Commissioner, T.C. Memo. 1993-602.

     The prerequisites to deductibility of vehicle expenses

incurred by an employee, therefore, are, first, that the expenses

be nonreimbursable outlays, and, second, that the expenses be

substantiated in accordance with the requirements of section 274.

     For the 1991 taxable year, Mr. Bradley claimed a deduction

for actual vehicle expenses of $9,143.    He could have been

reimbursed by his employer in the amount of $2,691.36 (9,968

business miles multiplied by 27 cents per mile).    Thus, any

vehicle expenses in excess of $2,691.36 are nonreimbursable and

potentially deductible.    However, Mr. Bradley substantiated the

amount of his vehicle expenses by presenting invoices and

canceled checks only in the amount of $3,567.74.    Assuming,
                                 -8-

arguendo, that Mr. Bradley could substantiate the time, place,

and business purpose for each use of his car, only $876.38

($3,567.74 amount substantiated less $2,691.36 of reimbursable

expenses) of his vehicle expenses would be deductible.     Register

v. Commissioner, T.C. Memo. 1988-390 (deduction allowed only to

the extent the taxpayer can substantiate expenses in excess of

the amount for which he was reimbursed).

      Mrs. Bradley claimed a deduction for actual vehicle expenses

in 1991 of $3,549.    She was reimbursed by her employer in the

amount of $3,085.56 (11,428 business miles multiplied by 27 cents

per mile).    Thus, any vehicle expenses in excess of $3,085.56 are

nonreimbursable and potentially deductible.    However,

Mrs. Bradley substantiated the amount of her vehicle expenses by

presenting invoices and canceled checks only in the amount of

$705.75.    Even if Mrs. Bradley could substantiate the time,

place, and business purpose for each use of her car, no portion

of her vehicle expenses would be deductible.    Id.

      Petitioners have therefore established entitlement to a

deduction for vehicle expenses in the amount of $876.38, which is

less than the $1,773 deduction allowed by respondent.     Because

they have failed to prove that the determination is erroneous, we

sustain respondent on this issue.

      b.   Uniform Expenses

      The expense of uniforms is deductible under section 162(a)

if:   (1) The uniforms are of a type specifically required as a

condition of employment; (2) the uniforms are not adaptable to
                                -9-

general usage as ordinary clothing; and (3) the uniforms are not

so worn.   Yeomans v. Commissioner, 30 T.C. 757, 767-769 (1958).

     Mrs. Bradley was required to purchase uniforms while she

worked as a nurse at Gastroenterology.     However, petitioners have

offered no evidence as to whether the uniforms were adaptable to

general usage as ordinary clothing.     Thus, respondent's

disallowance of the entire $375 claimed for uniform expenses is

sustained.

2.   Charitable Contributions

     Section 170 allows a taxpayer to deduct a charitable

contribution "only if verified under regulations prescribed by

the Secretary."   Sec. 170(a)(1).   The regulations provide

specific record-keeping requirements.    With respect to each

charitable contribution of money in a taxable year beginning

after December 31, 1982, a taxpayer is required to maintain one

of the following:   (1) A canceled check; (2) a receipt or letter

from the donee indicating the name of the donee, the date of the

contribution, and the amount of the contribution; or (3) any

other reliable written record showing the name of the donee, the

date of the contribution, and the amount of the contribution.

Sec. 1.170A-13(a)(1), Income Tax Regs.

     Petitioners attended, but were not members of, Brentwood

Baptist Church (Brentwood) in Houston, Texas.    Of the $4,640

deduction for charitable contributions claimed on their 1991

return, $4,435 was for contributions to Brentwood.    Petitioners

did not substantiate their contributions to Brentwood with
                                -10-

canceled checks or a receipt from the church.   Instead,

petitioners supported their contributions to Brentwood with a

printout of a computer spreadsheet.    The spreadsheet indicates

that petitioners attended every Sunday service during 1991,

depositing cash in amounts ranging from $25 to $150 in the

collection plate.   Mr. Bradley stated that he would update the

spreadsheet within a day or two of each contribution.

     Brentwood records contributions from its members by

supplying envelopes coded with membership numbers to be used by

members when making their weekly offerings.   Nonmembers can also

use the envelope system to ensure that Brentwood has a record of

their contributions.   Upon entering the church, congregants are

given a worship bulletin and asked by an usher if they would like

an envelope.   The ushers who pass the collection plate also carry

envelopes which are readily visible.   The congregation is

reminded through the Sunday bulletins, pulpit announcements, and

the monthly membership newsletter to use contribution envelopes

or to retain their canceled checks to receive credit for their

contributions.

     Petitioners did not present canceled checks or receipts from

Brentwood, and relied on the written records method of

substantiation instead.   The reliability of the records is a

factual determination made on the basis of all relevant facts and

circumstances.   Sec. 1.170A-13(a)(2)(i), Income Tax Regs.   The

burden of proof is on the donor to establish the reliability of

the written records.   Id.   On this record, we conclude that
                                 -11-

petitioners have failed to prove that they maintained reliable

written records for the $4,435 deduction for charitable

contributions to Brentwood.2

     The cases cited by petitioners are inapposite.    In

Vieselmeyer v. Commissioner, T.C. Memo. 1978-315, the taxpayers

established entitlement to a charitable contribution deduction

based on notations recorded on a desk calendar.    However, the

taxable year involved there was 1972, well before the effective

date of section 1.170A-13(a), Income Tax Regs.    In Burns v.

Commissioner, T.C. Memo. 1988-536, the taxpayer established

entitlement to a charitable contribution deduction based on

notations recorded on a kitchen calendar.    However, although the

taxable year involved was 1984, the Commissioner did not raise

the issue of compliance with the requirements of section 1.170A-

13(a)(1), Income Tax Regs.     Consequently, we declined to rule on

whether the calendar notations constituted reliable written

records.

3.   Section 6651(a)(1) Addition to Tax for Failure to File Timely

     Section 6651(a)(1) provides for an addition to tax of 5

percent of the tax required to be shown on the return for each

month or fraction thereof for which there is a failure to file,

     2
      In the notice of deficiency, respondent disallowed for lack
of substantiation all but $5 of the $4,640 that petitioners
claimed as a charitable contribution deduction. However, on
brief and at trial respondent's argument is limited to the $4,435
deduction for charitable contributions to Brentwood.
Accordingly, we conclude that respondent has conceded the
deduction in the amount of $205. See Rybak v. Commissioner, 91
T.C. 524, 566 n.19 (1988).
                                 -12-

not to exceed 25 percent.     The flush language of section 6651(a)

provides that in case of failure to file within 60 days of the

due date of the return, the addition to tax under section

6651(a)(1) will not be less than the lesser of $100 or 100

percent of the amount required to be shown as tax on the return.

The addition to tax for failure to file a return timely will be

imposed if a return is not timely filed unless the taxpayer shows

that the delay was due to reasonable cause and not willful

neglect.   Sec. 6651(a)(1).

     Petitioners' 1991 Federal income tax return was due on

April 15, 1992.   Sec. 6072(a); sec. 1.6072-1(a), Income Tax Regs.

Petitioners filed their 1991 Federal income tax return on

July 24, 1992.    Petitioners have not offered any evidence to show

that the delay was due to reasonable cause.      We therefore sustain

respondent's determination that petitioners are liable for a $100

addition to tax under section 6651(a)(1).

     To reflect the foregoing,

                                             Decision will be entered

                                        under Rule 155.
