                       T.C. Memo. 2008-85



                      UNITED STATES TAX COURT



                  AD DICKSON OJI, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14275-05.             Filed April 3, 2008.



     Ad Dickson Oji, pro se.

     Mark D. Eblen, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     GOEKE, Judge:   Respondent determined deficiencies in

petitioner’s 2001 and 2002 Federal income tax of $1,372 and
                                 - 2 -

$1,256, respectively.     After concessions,1 the issues remaining

for decision are:

       (1)   Whether petitioner is entitled to deductions for

advertising expenses above those that respondent allowed.       We

hold that he is not;

       (2)   whether petitioner is entitled to deductions for travel

expenses above those that respondent allowed.     We hold that he is

not;

       (3)   whether petitioner is entitled to deductions for meals

and entertainment expenses above those that respondent allowed.

We hold that he is not; and

       (4)   whether petitioner is entitled to itemized deductions

above those that respondent allowed.     We hold that he is not.




       1
       Petitioner concedes that his gross receipts for 2001
should be increased by $782. Respondent concedes (1) $283 of
disputed advertising expenses for 2001, leaving $417 in dispute;
(2) $283 of disputed advertising expenses for 2002, leaving
$1,200 in dispute; (3) $90.50 of disputed medical expenses for
2001, leaving $4,152.50 in dispute; and that (4) petitioner is
not liable for penalties under sec. 6663 or 6673. Respondent
raised the issue of whether petitioner is entitled to the
standard deduction for 2002. Because petitioner claimed itemized
deductions in 2002 instead of the standard deduction, the amount
of itemized deductions respondent allowed for 2002 is greater
than the standard deduction, and because respondent made no
arguments on this issue in the pretrial memorandum or elsewhere,
we deem it conceded. Respondent also raised the issue of whether
petitioner must pay self-employment tax for 2001 and 2002.
Because respondent did not make any adjustments to petitioner’s
self-employment tax in the notice of deficiency and did not
pursue this issue at trial, we deem it conceded.
                                - 3 -

     Respondent filed a motion to amend his answer to assert the

fraud penalty under section 66632 and made an oral motion to

impose sanctions under section 6673.    Respondent has conceded

these issues; therefore, we will deny both motions as moot.

                         FINDINGS OF FACT

     Some facts have been stipulated and are so found.   The

stipulated facts and the accompanying exhibits are incorporated

herein by this reference.   At the time he filed his petition,

petitioner resided in West Virginia.

     During 2001 and 2002 petitioner worked for the State of West

Virginia as the program coordinator for the Small Business

Development Center.   He also worked as an independent insurance

salesman.

     For each year at issue, petitioner timely filed a Form 1040,

U.S. Individual Income Tax Return, which included a Schedule C,

Profit or Loss From Business.   Petitioner’s mother, Virginia Oji,

was the only dependent petitioner reported on his 2001 and 2002

income tax returns.   Petitioner has two sons who lived in Nigeria

during 2001 and 2002.

     On April 28, 2005, respondent issued a statutory notice of

deficiency to petitioner determining deficiencies of $1,372 and

$1,256 for 2001 and 2002, respectively.


     2
       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.
                                  - 4 -

I.    Advertising Expenses

       Petitioner claimed on his Schedule C $3,080 and $2,936 in

advertising expenses for 2001 and 2002, respectively.      Respondent

concedes that petitioner may deduct $2,663 and $1,736 for

advertising expenses paid in 2001 and 2002, respectively.

Petitioner claims that the remaining amounts ($417 and $1,200 for

2001 and 2002, respectively) are attributable to telephone and

newspaper expenses.

II.    Travel Expenses

       Petitioner claimed $2,990 in travel expenses for 2001;

respondent allowed $607.     Petitioner claimed $3,000 in travel

expenses for 2002; respondent allowed $165.     Petitioner argues

that the disallowed amounts ($2,383 and $2,835 for 2001 and 2002,

respectively) are attributable to trips that he took to Nigeria

for two Insurance Brokers and Agents Association (IBAA)

conferences.    Petitioner created IBAA in 1999 and served as its

president in 2001 and 2002.     According to the receipts petitioner

provided, each year he paid for a hotel room, a vehicle rental,

meals, and telephone calls.

III.    Meals and Entertainment

       Petitioner claimed $1,006 and $1,044 in meals and

entertainment expenses for 2001 and 2002, respectively.

Respondent disallowed these deductions in their entirety.     The

claimed deductions are attributable to meals petitioner purchased
                                 - 5 -

at fast food restaurants for himself and, in some cases, other

people listed on a spreadsheet petitioner maintained on his

computer.   The spreadsheet provides the dates, amounts spent,

restaurant names, business purposes, and the people accompanying

petitioner during the meals.     The alleged business purpose of

each meal was to develop goodwill and solicit business.

IV.   Itemized Deductions

      Petitioner claimed on his Schedules A, Itemized Deductions,

$4,243 and $3,752 in medical expenses for 2001 and 2002,

respectively.   Respondent concedes that petitioner paid $90.50 of

medical expenses in 2001.    The disallowed amounts ($4,152.50 and

$3,752 for 2001 and 2002, respectively) are attributable to

medical expenses that petitioner allegedly paid to the Lagos

State University Teaching Hospital in Nigeria (the Lagos

hospital) on behalf of his mother.

      As evidence that he paid his mother’s medical expenses in

2001 and 2002, petitioner initially stipulated two invoices from

the Lagos hospital stamped as paid, each bearing the name of one

of petitioner’s sons living in Nigeria.     Petitioner later offered

into evidence another two invoices with the same contents as the

original bills except that petitioner’s mother was named on the

bills instead of his sons.   Petitioner also offered a letter from

the Lagos hospital that apparently accompanied the second set of

invoices.   The letter stated:
                                - 6 -

     As requested, the attached receipts reflect payments
     you made on behalf of your Mother Virginia Oji for
     years 2001 and 2002. Please accept our apologies for
     any inconvenience caused by the mix-up with your
     children’s account, which should not have happened.

Petitioner explained that the invoices bear his sons’ names

because they picked up the invoices from the Lagos hospital.

     While one of the invoices states the date of the patient’s

admission as August 10, 2001, and the date of discharge as

November 21, 2001, petitioner concedes that this is incorrect and

his mother was not hospitalized in Nigeria in 2001.   Petitioner

is not sure whether his mother was hospitalized in Nigeria in

2002.   Petitioner explained that his mother was frequently in and

out of hospitals and doctors’ offices, and the Lagos hospital

kept an account of his mother’s expenses and billed him

periodically.   Petitioner does not know exactly when his mother

was in Nigeria or received treatment from the Lagos hospital.

                               OPINION

     Petitioner claims that he is entitled to deductions for

business and medical expenses above the amounts respondent

allowed.    Section 162(a) allows a taxpayer to deduct ordinary and

necessary expenses paid or incurred in carrying on any trade or

business.   Section 213(a) allows a taxpayer to deduct personal

medical expenses of the taxpayer, his spouse, or a dependent to

the extent that the expenses exceed 7.5 percent of the taxpayer’s

adjusted gross income (AGI).
                                - 7 -

      A taxpayer has the burden of proving that the Commissioner’s

determinations set forth in the notice of deficiency are

incorrect.    Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115

(1933).3   Deductions are a matter of legislative grace, and a

taxpayer bears the burden of proving he is entitled to the

deductions.   Rule 142(a)(1); INDOPCO, Inc. v. Commissioner, 503

U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S.

435, 440 (1934).   In addition, a taxpayer must keep sufficient

records to substantiate any deductions claimed.   Sec. 6001; New

Colonial Ice. Co. v. Helvering, supra at 440.

I.   Advertising Expenses

      Petitioner claims entitlement to deductions respondent

disallowed of $417 and $1,200 for advertising expenses paid in

2001 and 2002, respectively.   Petitioner asserts that these

amounts are attributable to phone and newspaper expenses.

Petitioner presented no evidence or arguments that the expenses

were paid in carrying on his trade or business and were not

personal expenses.   See secs. 162(a), 262.   Therefore, we sustain

respondent’s determination disallowing the advertising expenses

above those allowed.




      3
       Petitioner did not present evidence or arguments that he
satisfied the requirements of sec. 7491(a).
                               - 8 -

II.   Travel Expenses

      Petitioner claims entitlement to deductions respondent

disallowed of $2,383 and $2,835 for 2001 and 2002, respectively,

for travel expenses incurred while in Nigeria for two IBAA

conferences.

      Section 274(h)(1) provides that no deduction shall be

allowed for expenses allocable to a convention or similar meeting

held outside of North America unless the taxpayer establishes

that the meeting is directly related to the active conduct of his

trade or business and that it is as reasonable for the meeting to

be held outside the North American area as within the North

American area, considering:

           (A) the purpose of such meeting and the activities
      taking place at such meeting,

           (B) the purposes and activities of the sponsoring
      organizations or groups,

           (C) the residences of the active members of the
      sponsoring organization and the places at which other
      meetings of the sponsoring organization or groups have been
      held or will be held, and
           (D) such other relevant factors as the taxpayer may
      present * * *.

      Petitioner asserts that the purpose of his trips to Nigeria

was to attend IBAA conferences, where he learned about the effect

of globalization on the insurance business and developed business

contacts with the attendees.   To substantiate his claim,

petitioner submitted into evidence the initial drafts of the
                                     - 9 -

conference agendas, which he printed out in preparation for

trial.       At trial petitioner provided the names of two other

members of IBAA who attended the meeting, but not their

residences.

       We find that petitioner’s testimony and the draft agendas do

not establish that any conferences actually took place during

petitioner’s trips to Nigeria.        Even if we were to find that the

conferences were held, the draft agendas do not adequately

describe the activities that took place at the conferences.

Furthermore, petitioner’s testimony about the general purpose of

IBAA and the conferences did not establish that it was reasonable

for the conferences, if they took place, to be held in Nigeria

instead of in North America.4        Therefore, we sustain respondent’s

determination disallowing the travel expenses above those

allowed.

III.       Meals and Entertainment

       Petitioner claims entitlement to deductions of $1,006 and

$1,044 for meal and entertainment expenses incurred in 2001 and

2002, respectively.       Petitioner’s evidence consisted of his

spreadsheet listing basic information about the meals, copies of

receipts for meals, and copies of checks made out to restaurants.



       4
       Sec. 274(c) also contains special rules that apply to
foreign travel. Because we find that petitioner has not
satisfied the requirements of sec. 274(h), we need not address
sec. 274(c).
                              - 10 -

      Section 274(d) provides that no deduction or credit is

allowed for expenses for meals or entertainment unless the

taxpayer substantiates by adequate records or sufficient evidence

corroborating the taxpayer’s own statement:   (1) The amount of

such expenses; (2) the time and place of the meal or

entertainment; (3) the business purpose of the expenses; and (4)

if the expense is for entertainment, the business relationship to

the taxpayer of the persons entertained.

      Petitioner presented no evidence or arguments as to his

relationship to the people listed on the spreadsheet.    We find

that the meals that petitioner apparently ate alone had no

business purpose because petitioner was not developing goodwill

or soliciting business and petitioner offered no evidence or

arguments of any other business purpose for the meals.

Therefore, we sustain respondent’s determination that petitioner

is not entitled to any Schedule C deductions for meals or

entertainment.

IV.   Itemized Deductions

      Petitioner claims entitlement to deductions respondent

disallowed of $4,152.50 and $3,752 for 2001 and 2002,

respectively, for medical expenses he paid to the Lagos hospital

for treatment provided to his mother.

      Respondent argues that the evidence presented indicates that

it was petitioner’s sons who were hospitalized in 2001 and 2002,
                               - 11 -

not petitioner’s mother.    Even if we were to accept petitioner’s

explanation of why the invoices originally contained his sons’

names rather than his mother’s, there is no evidence that it was

petitioner who paid his mother’s medical expenses.    Furthermore,

we find that the invoices from the Lagos hospital are not

authentic, and we accord them no weight.    If we were to accept

petitioner’s explanation, the Lagos hospital must have prepared

the invoices when petitioner’s sons picked them up instead of at

the time petitioner was actually billed, and consequently they

cannot be the original invoices.    Furthermore, the Lagos hospital

could not have been maintaining careful records if it misnamed

the patient on two occasions (again presuming that the sons

picked up the receipts on different days; otherwise it is not

clear why one son did not pick up both receipts) and

misrepresented when the patient was hospitalized on one of the

invoices.

     Therefore, we find that petitioner has failed to

substantiate that he paid any medical expenses on behalf of his

mother in 2001 or 2002.    In the absence of any credible

corroborating evidence, we sustain respondent’s determination

disallowing deductions for medical expenses.5



     5
       Respondent concedes that petitioner paid $90.50 of medical
expenses in 2001. However, that amount does not exceed 7.5
percent of petitioner’s adjusted gross income for 2001 and
therefore is not allowed. See sec. 213(a).
                        - 12 -

To reflect the foregoing and the concessions of the parties,


                                   An appropriate order will

                              be issued, and decision will

                              be entered under Rule 155.
