                            T.C. Summary Opinion 2017-42


                            UNITED STATES TAX COURT



  ADOLPH MARTINEZ, JR. AND RACQUEL M. MARTINEZ, Petitioners v.
       COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 22969-15S.                       Filed June 26, 2017.



      Adolph Martinez, Jr., and Racquel M. Martinez, pro sese.

      Catherine J. Caballero, Janice B. Geier, Peter R. Hochman, and Kimberly A.

Trujillo, for respondent.



                                SUMMARY OPINION


      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
                                         -2-

petition was filed.1 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.

      In a notice of deficiency dated June 22, 2015, respondent determined

deficiencies of $3,577 and $4,440 in petitioners’ Federal income tax for 2012 and

2013, respectively. After a concession,2 the issues for decision are: (1) whether

petitioners are entitled to deductions for unreimbursed employee business

expenses claimed on their Schedules A, Itemized Deductions, in amounts greater

than respondent allowed; and (2) whether petitioners are entitled to deductions for

charitable contributions claimed on their Schedules A in amounts greater than

respondent allowed. Respondent also made computational adjustments to

petitioners’ child tax credits for the years in issue; this adjustment is dependent on

the outcome of the disputed issues.




      1
        Unless otherwise indicated, subsequent 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.
      2
      Respondent determined that petitioners had an unreported taxable State
income tax refund of $1,785 for 2013. Petitioners conceded this amount.
                                        -3-

                                    Background

      Some of the facts have been stipulated, and we incorporate the stipulation of

facts by this reference. Petitioners Adolph Martinez, Jr., and Racquel M. Martinez

resided in California when the petition was timely filed.

I.    Teaching and Coaching Activities

      During the years in issue Mr. Martinez was employed as a physical

education teacher and an athletic director for St. Helen’s Catholic Elementary

School (St. Helen’s), a private school in Fresno, California. Mr. Martinez coached

a number of sports including girls’ volleyball, boys’ volleyball, boys’ basketball,

track and field, cross country, and softball. Mr. Martinez also coached basketball

as a volunteer for Clovis East High School (Clovis East) in Clovis, California,

through the Amateur Athletic Union (AAU) basketball program.

      Mr. Martinez would travel to Clovis East and to other locations for team

practice or sporting events as part of his coaching duties for St. Helen’s and Clovis

East. St. Helen’s did not reimburse employees for mileage or coaching supplies

during the years in issue. Neither did Clovis East reimburse volunteers for

mileage or any other expenses paid during the years in issue.
                                        -4-

      During the years in issue Mrs. Martinez was employed as a sixth grade

teacher at Gettysburg Elementary School (Gettysburg Elementary), a public

elementary school. Mrs. Martinez also coached softball for Gettysburg

Elementary during the years in issue. Unlike her husband, Mrs. Martinez did not

travel to other schools or other locations as part of her coaching duties; during the

years in issue her coaching duties were performed at Gettysburg Elementary,

where she normally worked.

II.   Tax Returns

      Petitioners’ 2012 and 2013 Forms 1040, U.S. Individual Tax Return, were

prepared and electronically filed by their certified public accountant (C.P.A.) and

representative, Thad Scott.

      A.     2012 Return

      Petitioners reported their wage income from their respective employers,

taxable interest, and a taxable State income tax refund. They listed their two

minor children as dependents and claimed a child tax credit of $2,000. On their

Schedule A petitioners claimed deductions including the following:
                                           -5-

                                    Expense               Amount
                       Unreimbursed employee business $21,870
                       Gifts to charity:
                        Cash or check                          3,651
                        Other than by cash or check             500
                       Tax preparation expense                  375

Petitioners attached two Forms 2106-EZ, Unreimbursed Employee Business

Expenses, one for each petitioner, computing their expenses as follows:3

                          Expense                 Husband        Wife     Total

      Business mileage                                $2,220    $3,518    $5,738
      Travel away from home overnight                  1,675      ---      1,675
      Other (not included above)                       4,206      8,863   13,069
      Meals and entertainment                           963        425     1,388
          Total                                        9,064    12,806    21,870

      B.          2013 Return

      Petitioners reported their wage income from their respective employers and

interest income. They listed their two minor children as dependents and claimed a



      3
       The amount of meals and entertainment expenditures claimed is after the
application of the 50% limitation prescribed by sec. 274(n). Petitioners claimed
4,000 and 6,338 business miles for Mr. Martinez and Mrs. Martinez, respectively,
using the standard mileage rate. The standard mileage rate of 55.5 cents per mile
for 2012 is set forth in Notice 2012-1, sec. 2, 2012-2 I.R.B. 260, 260.
                                         -6-

child tax credit of $2,000. On their Schedule A petitioners claimed deductions

including the following:

                                 Expense                 Amount
                   Unreimbursed employee business $24,515
                   Gifts to charity:
                     Cash or check                          3,646
                     Other than by cash or check             500
                   Tax preparation expense                   375

Petitioners attached two Forms 2106-EZ, computing their unreimbursed employee

business expenses as follows:4

                      Expense                  Husband        Wife        Total

      Business mileage                             $2,769    $2,204       $4,973
      Actual vehicle (gasoline, oil, etc.)         ---        1,200        1,200
      Travel away from home overnight               1,375           ---    1,375
      Other (not included above)                    5,727     9,827       15,554
      Meals and entertainment                        938        475        1,413
          Total                                    10,809    13,706       24,515



      4
       The amount of meals and entertainment expenditures claimed is after the
application of the 50% limitation prescribed by sec. 274(n). Petitioners claimed
4,900 and 3,900 business miles for Mr. Martinez and Mrs. Martinez, respectively,
using the standard mileage rate. The standard mileage rate of 56.5 cents per mile
for 2013 is set forth in Notice 2012-72, sec. 2, 2012-50 I.R.B., 673, 673.
                                        -7-

III.   Notice of Deficiency and Trial

       In a notice of deficiency dated June 22, 2015, respondent disallowed all of

the claimed unreimbursed employee business expense and charitable contribution

deductions. Respondent allowed deductions of $375 in tax preparation fees and

$500 in charitable contributions (other than by cash or check) for each of the years

in issue.

       At the time the petition was timely filed, petitioners had requested an

examination so that the Internal Revenue Service (IRS or respondent) could

review their documentation for the years in issue. Before trial, an examiner with

the IRS met with petitioners’ representative Mr. Scott, who provided a number of

receipts, mileage logs, and other documents. After reviewing the documents

provided, the examiner determined that petitioners had substantiated “teaching and

coaching supplies” expenses for the years in issue of $736 for 2012 and $389 for

2013, deductible as unreimbursed employee business expenses.

       At trial petitioners introduced copies of documents purported to substantiate

their reported expenses, including the following:

       (1) a letter dated June 1, 2015, from the “Booster President” of the Clovis

East boys’ basketball program;
                                       -8-

      (2) a receipt dated March 4, 2013, for a $296.92 cash purchase of shirts

from Mid-State Graphics, a custom screen printing shop;

      (3) a receipt dated May 24, 2012, for a $200 cash donation to St. Helen’s;

      (4) a letter from Cancer Support Services5 on which “$20 donation” is

handwritten;

      (5) tentative schedules for various sporting events for 2012 and 2013;

      (6) mileage logs for Mr. Martinez for the years in issue; and

      (7) a document titled “Adolph and Racquel Martinez” reflecting the

following:




      5
       Cancer Support Services qualifies as an exempt organization under sec.
501(c)(3).
                                               -9-

                                                          2012     2013
              Form 2106-EZ:
                Coaching attire (3 months)                $2,139   $1,481
                Teaching & coaching supplies (3 months)    2,339    1,748
                [No description provided]                  ---      2,553

                 Total                                     4,478    5,782

              Volunteer Expenses:
                Team shirts                                ---      $296
                Coaching gifts to volunteers               1,598
                Meals/entertainment                        2,500    4,187
                Supplies/gifts/clothing                    2,902    1,342
                 Total                                     7,000    5,825

      Petitioners also brought to trial approximately 10 bags of loose receipts,

offered for purposes of substantiating their expenses. These receipts were not

made a part of the record. Instead, the parties agreed to introduce into evidence a

copy of the Case History Report from the examiner and her “Lead Sheets”, which

summarized her findings after reviewing petitioners’ receipts and other documents

for the years in issue.

                                          Discussion

I.    Burden of Proof

      In general, the Commissioner’s determination set forth in a notice of

deficiency is presumed correct, and the taxpayer bears the burden of proving that
                                        - 10 -

the determination is 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. Petitioners did not allege

or otherwise show that section 7491(a) applies. See sec. 7491(a)(2)(A) and (B).

Therefore, petitioners bear the burden of proof. See Rule 142(a).

II.   General Principles Governing Substantiation

      Deductions are a matter of legislative grace, and a taxpayer is required to

maintain records sufficient to substantiate expenses underlying deductions claimed

on his or her return. Sec. 6001; sec. 1.6001-1(a), Income Tax Regs.; see New

Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).

      If the taxpayer is able to establish that he paid or incurred a deductible

expense but is unable to substantiate the precise amount, the Court generally may

approximate the deductible amount, but only if the taxpayer presents sufficient

evidence to establish a rational basis for making the estimate. See Cohan v.

Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930); see also Vanicek v.

Commissioner, 85 T.C. 731, 742-743 (1985). Business expenses specified in

section 274 are subject to rules of substantiation that supersede the Cohan test.

Sanford v. Commissioner, 50 T.C. 823, 827-828 (1968), aff’d, 412 F.2d 201 (2d
                                       - 11 -

Cir. 1969); sec. 1.274-5T(a), Temporary Income Tax Regs., 50 Fed. Reg. 46014

(Nov. 6, 1985).

III.   Unreimbursed Employee Business Expenses

       On their Schedules A petitioners claimed deductions for unreimbursed

employee business expenses for tax years 2012 and 2013. Petitioners’

unreimbursed employee business expenses can be separated into the following

categories: (1) business mileage; (2) actual vehicle expenses; (3) travel expenses

while away from home overnight; (4) business expenses other than categories (1)

through (3); and (5) meals and entertainment.

       Qualifying expenses under section 162 include expenses paid or incurred as

an employee. Lucas v. Commissioner, 79 T.C. 1, 6 (1982). Expenses are not

“necessary” when an employee fails to claim reimbursement for expenses incurred

in the course of his employment when entitled to do so. Orvis v. Commissioner,

788 F.2d 1406, 1408 (9th Cir. 1986), aff’g T.C. Memo. 1984-533. Accordingly, a

taxpayer cannot deduct employee business expenses to the extent he is entitled to

reimbursement from his employer for those expenses. See Lucas v.

Commissioner, 79 T.C. at 7. Deductions for those expenses belong to the

employer. See Kennelly v. Commissioner, 56 T.C. 936, 943 (1971), aff’d without

published opinion, 456 F.2d 1335 (2d Cir. 1972).
                                        - 12 -

      The taxpayer bears the burden of proving that he is not entitled to

reimbursement from his employer for such expenses. See Fountain v.

Commissioner, 59 T.C. 696, 708 (1973). The taxpayer can prove that he was not

entitled to reimbursement by showing, for example, that he was expected to bear

these costs. See id.; see also Dunkelberger v. Commissioner, T.C. Memo. 1992-

723, 1992 WL 379282, at *1 (finding that management team expected taxpayer to

bear expense of business lunches with vendors).

      Section 274(d) applies to: (1) any travel expense, including meals and

lodging away from home; (2) entertainment, amusement, and recreational

expenses; (3) any expense for gifts; or (4) the use of listed property, as defined in

section 280F(d)(4), including passenger automobiles. To deduct such expenses

the taxpayer must substantiate by adequate records or evidence sufficient to

corroborate the taxpayer’s own testimony: (1) the amount of the expenditure or

use, which includes mileage in the case of automobiles; (2) the time and place of

the travel, entertainment, or use; (3) its business purpose; and in the case of

entertainment, (4) the business relationship to the taxpayer of each expenditure or

use. Sec. 274(d) (flush language). Ideally a taxpayer should keep an account

book, diary, or log made near the time of the expense, but a taxpayer’s testimony
                                       - 13 -

along with corroborative evidence may suffice. Sec. 1.274-5T(b), (c)(2) and (3),

Temporary Income Tax Regs., 50 Fed. Reg. 46014-46022 (Nov. 6, 1985).

      A.    Automobile Expenses

            1.     Business Mileage

      Petitioners deducted business mileage expenses as follows: (1) $2,220 and

$3,518 for Mr. Martinez and Mrs. Martinez, respectively, for 2012; and (2) $2,769

and $2,204 for Mr. Martinez and Mrs. Martinez, respectively, for 2013.

      As a general rule, a taxpayer’s costs of commuting between his or her

residence and place of business or employment are nondeductible personal

expenses. See Fausner v. Commissioner, 413 U.S. 838, 839 (1973);

Commissioner v. Flowers, 326 U.S. 465, 473-474 (1946); sec. 1.262-1(b)(5),

Income Tax Regs. There are various exceptions to this general rule. In

accordance with Rev. Rul. 99-7, 1999-1 C.B. 361, 362, a taxpayer may deduct

travel expenses “incurred in going between the taxpayer’s residence and a

temporary work location outside the metropolitan area where the taxpayer lives

and normally works.” A taxpayer may also deduct travel expenses for commuting

between the taxpayer’s residence and his or her work locations if the residence is

the taxpayer’s principal place of business. See Strohmaier v. Commissioner, 113

T.C. 106, 113-114 (1999); Rev. Rul. 99-7, supra.
                                         - 14 -

      Mrs. Martinez testified that she did not travel to other locations for her

coaching duties and that all of her duties were completed on the campus of

Gettysburg Elementary. Further, Mrs. Martinez asserted that the business mileage

reported was “just for home to work.” Thus the business mileage expense

deductions Mrs. Martinez claimed are for nondeductible, personal commuting

expenses, and she is not entitled to deduct business mileage for the years in issue.

See sec. 262(a); Fausner v. Commissioner, 413 U.S. at 839; Commissioner v.

Flowers, 326 U.S. at 473-474; sec. 1.262-1(b)(5), Income Tax Regs.

      Mr. Martinez testified that he often drove to various schools and other

locations for his employment as the assistant athletic director for St. Helen’s and

for his volunteer work as a coach for Clovis East. For example, to start his day

sometimes he would drive to Clovis East to coach “zero period” practice, held

from 6:30 a.m. to 7:30 a.m. From Clovis East he would then drive to St. Helen’s

for his teaching and coaching duties. Sometimes he would then drive from St.

Helen’s to another location for a practice or event. Mr. Martinez also testified that

he sometimes attended practices or events on the weekends.

      Mr. Martinez provided mileage logs for 2012 and 2013 that purported to

substantiate his business mileage. But at trial he testified that “[t]he log that I

gave I only did Clovis East * * * I did not give you a St. Helen’s log”. Thus, it
                                         - 15 -

appears that the mileage logs relate to Mr. Martinez’s volunteer work for Clovis

East through the AAU program and do not reflect mileage driven as an employee

for St. Helen’s. Petitioners also provided copies of 10 tentative schedules for

various sporting events for 2012 and 2013. Mr. Martinez did not explain which of

these schedules are for St. Helen’s and which are for Clovis East, and it is not

clear from most of the schedules themselves; they reflect dates and locations, but

only two of the schedules reflect the name St. Helen’s. Mr. Martinez testified that

occasionally events would be canceled or rescheduled, but most of the events were

held as planned, and as athletic director for St. Helen’s he was required to attend

every game. He did not provide specific details, such as the distance driven

between St. Helen’s and other locations.

      Mr. Martinez did not provide documentation or other evidence to

substantiate the number of miles driven for his employment as athletic director for

St. Helen’s. Although we find credible Mr. Martinez’s testimony that he was often

driving to other locations as athletic director for St. Helen’s, the tentative

schedules by themselves, without specific testimony or other corroborating

evidence, do not establish the number of qualifying business miles driven as

required by section 274(d). See sec. 274(d) (flush language); sec. 1.274-5T(b),

(c)(2) and (3), Temporary Income Tax Regs., supra. Thus, petitioners have not
                                        - 16 -

substantiated the business mileage for Mr. Martinez for the years in issue, and they

are not entitled to these deductions.

             2.    Actual Vehicle Expenses

      In addition to deducting business mileage expenses for 2013, Mrs. Martinez

deducted $1,200 for actual vehicle expenses for 2013. Those expenses are subject

to strict substantiation under section 274. Petitioners did not address these

expenses at trial and did not provide any documentation or other evidence to

substantiate them. See sec. 274(d) (flush language); sec. 1.274-5T(b), (c)(2) and

(3), Temporary Income Tax Regs., supra. For these reasons, petitioners are not

entitled to deduct the actual vehicle expenses.6

      B.     Travel Expenses

      Petitioners deducted travel expenses for Mr. Martinez of $1,675 for 2012

and $1,375 for 2013.

      Travel expenses are also subject to the strict substantiation requirements of

section 274(d). To deduct travel expenses, the taxpayer must substantiate through

adequate records or other corroborative evidence the following elements: (1) the


      6
       Additionally, a taxpayer cannot use the standard mileage rate and claim
actual expenses for the same year. See Kay v. Commissioner, T.C. Memo. 2002-
197, aff’d, 85 F. App’x 362 (5th Cir. 2003). Thus, Mrs. Martinez could not claim
both the standard mileage rate and her actual vehicle expenses for 2013. Id.
                                        - 17 -

amount of the expense; (2) the time and place of the expense; and (3) the business

purpose of the expense. Sec. 274(d).

      A taxpayer satisfies the “adequate records” test if he or she maintains an

account book, a diary, a log, a statement of expense, trip sheets, or similar records

prepared at or near the time of the expenditures, such as receipts or bills, that show

each element of each expenditure or use. See sec. 1.274-5T(c)(2), Temporary In-

come Tax Regs., supra. Contemporaneous logs are not required, but corroborative

evidence to support a taxpayer’s reconstruction of the elements of an expenditure

or use must have “a high degree of probative value to elevate such statement” to

the level of credibility of a contemporaneous record. Id. subpara. (1), 50 Fed. Reg.

46016-46017.

      Mr. Martinez testified that sometimes he would travel out of town to coach

various events, especially during spring, when coaching the AAU program at

Clovis East. Mr. Martinez provided neither details about specific trips nor

testimony or other evidence to establish the required elements of amounts, dates,

destinations, and business reason for travel. Therefore, petitioners are not entitled

to deductions for travel expenses. See sec. 274(d); sec. 1.274-5T(c)(2),

Temporary Income Tax Regs., supra.
                                       - 18 -

      C.     Meals and Entertainment Expenses

      Petitioners deducted meal and entertainment expenses as follows: (1) $963

and $425 for Mr. Martinez and Mrs. Martinez, respectively, for 2012; and (2)

$938 and $475 for Mr. Martinez and Mrs. Martinez, respectively, for 2013. Mr.

Martinez testified that the children he coached at St. Helen’s and Clovis East came

from low-income families and that sometimes he would buy them dinner when

driving them home after practice. Mrs. Martinez testified that she would purchase

hot chocolate, cookies, and other food items to try to motivate her students, and

that when she coached she would buy milkshakes for students to reward them for

winning games.

      Petitioners’ meals and entertainment expenses are also subject to the strict

substantiation rules of section 274. Petitioners did not provide testimony or other

evidence to establish the amount, time, place, and business purpose for each

expense. See sec. 274(d) (flush language); sec. 1.274-5T(c)(2), Temporary

Income Tax Regs., supra. Therefore, petitioners are not entitled to deductions for

meal and entertainment expenses for the years in issue.

      D.     Other Expenses

      Petitioners claimed deductions for “other” unreimbursed employee business

expenses as follows: (1) $4,206 and $8,863 for Mr. Martinez and Mrs. Martinez,
                                       - 19 -

respectively, for 2012; and (2) $5,727 and $9,827 for Mr. Martinez and Mrs.

Martinez, respectively, for 2013. Petitioners’ document titled “Adolph and

Racquel Martinez” reflected the following other expenses: (1) coaching attire

expenses totaling $2,139 and $1,481 for three months for 2012 and 2013,

respectively; (2) teaching and coaching supplies expenses totaling $2,339 and

$1,748 for three months for 2012 and 2013, respectively; and (3) uncategorized

expenses totaling $2,553 for 2013.

      The examiner allowed petitioners to deduct as unreimbursed employee

business expenses $736 in teaching and coaching supplies for 2012 and $398 in

teaching and coaching supplies for 2013.7

      Mrs. Martinez testified that while the school provided textbooks and basic

school supplies, she purchased books to keep in the classroom for students to read

for leisure and gifts for parents who volunteered for her classroom. Mrs. Martinez

also testified that she did not think Gettysburg Elementary would reimburse her

for these items, but she did not inquire about the reimbursement policy.8


      7
      On the basis of this record, these expenses appear to be claimed by Mr.
Martinez.
      8
      The Court encouraged Mrs. Martinez to provide specifics as to her
expenditures. Irrespective, Mrs. Martinez testified that she thought asking for
reimbursement “would be silly. It’s kind of like this whole thing. I think this is
                                                                       (continued...)
                                         - 20 -

      Petitioners asserted that they would keep receipts for their meals and

entertainment expenses and other expenses in a bag and that they would try to tally

these receipts quarterly each year. Petitioners would then provide a summary of

these expenses to their C.P.A., Mr. Scott. Neither petitioner provided any

specifics for the years in issue or provided information to establish a pattern of

spending. For example, at trial when Mr. Martinez was asked whether he could

recall a pattern of expenditures, he testified that “[i]t varies. The thing that’s

consistent is buying food for my boys that have nothing * * * [b]ut typically

expenses will come up”. Mrs. Martinez also could not provide specifics as to

amounts spent or spending patterns but testified that she “spent a very similar

amount every year.”

      After reviewing petitioners’ receipts, the examiner allowed deductions for

teaching and coaching supplies of $736 for 2012 and $389 for 2013. Petitioners

did not provide adequate receipts or other documentation to substantiate the

remainder of the expenses reported. See sec. 1.6001-1(a), Income Tax Regs.

Further, petitioners did not provide sufficient testimony or other evidence to


      8
        (...continued)
silly to be up here with this judge and his time. I think this is useless, so I think it
would be silly to * * * say I want to provide treats for my sixth graders because
they all turned in their homework * * * I wouldn’t want to embarrass myself.”
                                       - 21 -

provide the Court a basis on which to estimate these expenses using the rule set

forth in Cohan.9 See Cohan v. Commissioner, 39 F.2d at 543-544; Vanicek v.

Commissioner, 85 T.C. at 742-743.

      For these reasons, petitioners are entitled to other unreimbursed employee

business expense deductions of $736 for 2012 and $389 for 2013, in excess of

what respondent allowed in the notice of deficiency.

IV.   Charitable Contributions

      On their Schedules A petitioners claimed deductions of $3,651 and $3,646

for charitable cash contributions for tax years 2012 and 2013, respectively.

Respondent disallowed these deductions. At trial petitioners conceded that they

had donated only $220 in cash ($200 to St. Helen’s and $20 to Cancer Support

Services) during the years in issue. Petitioners also asserted that Mr. Martinez had

additional unreimbursed volunteer expenses, which he paid as a volunteer coach

for Clovis East through the AAU program.




      9
        Further, because Mrs. Martinez did not inquire as to whether Gettysburg
Elementary would have reimbursed her for books and other items purchased for
the classroom, she did not meet her burden of proving that she was not entitled to
reimbursement from her employer for such expenses. Thus, even if petitioners had
substantiated these expenses, they would not be entitled to deductions for them.
See Fountain v. Commissioner, 59 T.C. 696, 708 (1973).
                                       - 22 -

      A.     Contribution to St. Helen’s

      At trial petitioners claimed deduction of $200 for a cash charitable

contribution to St. Helen’s in 2012.

      Section 170(a) allows a taxpayer a deduction for any charitable contribution

made in compliance with the statute. The taxpayer is allowed the charitable

contribution deduction if the charitable contribution is provided to a corporation,

trust, or community chest, fund, or foundation created or organized in the United

States and operated exclusively for religious or charitable purposes. Sec.

170(c)(2). In order to deduct a charitable contribution, a taxpayer must establish

that a gift was made to a qualified entity organized and operated exclusively for an

exempt purpose, no part of the net earnings of which inures to the benefit of any

private individual. Id.; McGahen v. Commissioner, 76 T.C. 468, 481-482 (1981),

aff’d without published opinion, 720 F.2d 664 (3d Cir. 1983). Qualified entities

under section 170 are generally organizations that qualify for an exemption under

section 501(c)(3). See, e.g., Dew v. Commissioner, 91 T.C. 615, 624 n.7 (1988);

Taylor v. Commissioner, T.C. Memo. 2000-17.

      Before determining whether petitioners have adequately substantiated their

gift to St. Helen’s, we must decide whether they have met their burden of

establishing that the donee entity was recognized by the IRS as an organization
                                        - 23 -

described in section 501(c)(3) and entitled to receive tax-deductible contributions

under section 170(c)(2). We conclude that they have not met this burden.

      Petitioners did not provide testimony or other evidence establishing that St.

Helen’s was eligible to receive tax-deductible contributions. We take judicial

notice that this organization is not currently listed on the IRS master list of section

501(c)(3) organizations.10 Therefore, they cannot deduct the $200 cash charitable

contribution for 2012.

      B.     Unreimbursed Volunteer Expenses

      At trial petitioners claimed deductions for unreimbursed volunteer expenses

of $7,000 and $5,825 for 2012 and 2013, respectively. Mr. Martinez also testified

that the mileage logs presented reflected miles driven for his volunteer work with

Clovis East; on the basis of the mileage logs, petitioners are claiming deductions


      10
        The IRS master list of sec. 501(c)(3) organizations is available at
https://www.irs.gov/charities-non-profits/exempt-organizations-select-check.

       A court may take judicial notice of appropriate adjudicative facts at any
stage in a proceeding whether or not the parties request it. See Fed. R. Evid.
201(a), (c); Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th
Cir. 2006) (stating that the court “may take judicial notice of court filings and
other matters of public record”); United States v. Harris, 331 F.2d 600, 601 (6th
Cir. 1964) (explaining that a court may take judicial notice sua sponte). In
general, a court may take judicial notice of facts that are not subject to reasonable
dispute and are capable of accurate and ready determination by resort to sources
whose accuracy cannot be reasonably questioned. Fed. R. Evid. 201(b)(2).
                                       - 24 -

for unreimbursed volunteer mileage expenses of $1,111 for 2012 and $1,090 for

2013.11

      No deduction is allowed under section 170 for a contribution of services.

However, “unreimbursed expenditures made incident to the rendition of services

to an organization contributions to which are deductible may constitute a

deductible contribution.” Sec. 1.170A-1(g), Income Tax Regs. To be deductible,

unreimbursed expenses must be directly connected with and solely attributable to

the rendition of services to a charitable organization. Van Dusen v.

Commissioner, 136 T.C. 515, 525 (2011); Saltzman v. Commissioner, 54 T.C.

722, 724 (1970). “In applying this standard, courts have considered whether the

charitable work caused or necessitated the taxpayer’s expenses.” Van Dusen v.

Commissioner, 136 T.C. at 525.

      A taxpayer is required to substantiate charitable contributions. Sec. 6001;

sec. 1.6001-1(a), Income Tax Regs. Contributions through the payment of

unreimbursed volunteer expenses of less than $250 are subject to the requirements


      11
        The logs reflect a total of 7,935 miles driven in 2012 and 7,783 miles
driven in 2013. The standard mileage rate for use of an automobile in rendering
gratuitous services to a charitable organization is 14 cents per mile for 2012 and
2013. See Notice 2012-1, sec. 2; Notice 2012-72, sec. 2. Thus, petitioners are
claiming unreimbursed volunteer expenses for mileage of $1,111 (7,935 × $0.14
= $1,111) for 2012 and $1,090 (7,783 × $0.14 = $1,090) for 2013.
                                        - 25 -

for contributions of money set forth in section 1.170A-13(a), Income Tax Regs.

Van Dusen v. Commissioner, 136 T.C. at 531. A taxpayer is required to maintain

a canceled check or a receipt from the donee organization. Sec. 1.170A-13(a)(1),

Income Tax Regs. In the absence of a canceled check or a receipt from the donee

organization, the taxpayer must maintain other reliable written records showing

“the name of the payee, the date of the payment, and the amount of the payment.”

Id.; see also Van Dusen v. Commissioner, 136 T.C. at 534.

      Unreimbursed volunteer expenses of $250 or more must also be

substantiated with a contemporaneous written statement from the donee

organization containing, among other things, a description of the services that the

taxpayer provided. See Van Dusen v. Commissioner, 136 T.C. at 536-537; sec.

1.170A-13(f)(10), Income Tax Regs. At a minimum, the contemporaneous written

acknowledgment must contain a description of any property contributed, a

statement as to whether any goods or services were provided in consideration by

the donee, and a description and good-faith estimate of the value of any goods or

services provided in consideration. Sec. 170(f)(8)(B). A written acknowledgment

is contemporaneous if it is obtained by the taxpayer on or before the earlier of (1)

the date on which the taxpayer files a return for the taxable year in which the
                                       - 26 -

contribution was made, or (2) the due date (including extensions) for filing such

return. Id. subpara. (C).

      Petitioners provided a copy of a receipt dated March 4, 2013, for a $296.92

cash purchase from Mid-State Graphics, a custom screen printing shop in Fresno,

California. Mr. Martinez testified that this purchase of shirts was an unreimbursed

volunteer expense incurred as part of his volunteer work for Clovis East through

the AAU program.12 Petitioners also provided mileage logs for Mr. Martinez,

which they assert reflect his volunteer work for Clovis East during the years in

issue. The mileage logs reflect dates traveled, “From” and “To” (origination and

destination), “Purpose” (whether he was attending a practice or a game), and the

number of miles driven per trip.

      Petitioners did not provide a contemporaneous written acknowledgment

from Clovis East or AAU for these unreimbursed volunteer expenses. Petitioners

provided a letter dated June 1, 2015, from the “Booster President” of the Clovis

East boys’ basketball program in which she asserts that Mr. Martinez was a

volunteer and was not reimbursed for “mileage, per diem, miscellaneous travel


      12
         We take judicial notice that AAU (Amateur Athletic Union of the United
States, Inc., in Lake Buena Vista, Florida) and the Clovis East boys’ basketball
program (The Reagan Educational Center Timberwolves Foundation) are each
listed on the IRS master list of sec. 501(c)(3) organizations. See supra note 11.
                                         - 27 -

expenses, or any other costs”. Although the letter mentions mileage, it does not

specifically mention the purchase of the shirts or any other items contributed, and

thus does not have a description of any property contributed. Additionally, this

letter is dated June 1, 2015, which is later than April 8, 2014, the earlier of the due

date or the filing date for petitioners’ 2013 return; thus it is not contempora-

neous.13 See sec. 170(f)(8)(B) and (C).

      Because petitioners did not provide a breakout of expenses or supporting

documentation for the remainder of the unreimbursed volunteer expenses, it is

unclear whether each of the individual expenses is less than or greater than $250.

At a minimum, petitioners have not provided canceled checks, receipts, or other

written records establishing the name of the payee, the date, and the amount of the

payment for any of these expenses. See Van Dusen v. Commissioner, 136 T.C. at

531; sec. 1.170A-13(a)(1), Income Tax Regs. Therefore, they have not provided

adequate substantiation.

      Thus, petitioners are not entitled to deductions for unreimbursed volunteer

expenses.




      13
           Petitioners’ 2013 Form 1040, due April 15, 2014, was filed April 8, 2014.
                                       - 28 -

      C.     Contribution to Cancer Support Services

      At trial petitioners also asserted that they made a $20 cash charitable

contribution to Cancer Support Services. A cash contribution of less than $250

may be substantiated with a canceled check, a receipt, or other reliable evidence

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.

      The letter from Cancer Support Services is addressed to Mr. Martinez and

says “[t]hank you so much for speaking with us a few days ago and for pledging

your support to the Cancer Support Services.” The letter has “$20 Donation”

handwritten on it and is undated. Petitioners did not testify or provide other

evidence as to when the donation was made. Because petitioners have not

established the date of the donation, they have not provided adequate

substantiation. See id. Therefore, they cannot deduct this cash contribution.

      For these reasons, petitioners are not entitled to deductions for charitable

contributions in excess of what respondent allowed on the notice of deficiency.

V.    Conclusion

      For the reasons stated above, petitioners are entitled to deduct only

unreimbursed employee business expenses of $736 for 2012 and $389 for 2013, in

excess of what respondent allowed on the notice of deficiency.
                                       - 29 -

      We have considered all of the parties’ arguments, and, to the extent not

addressed herein, we conclude that they are moot, irrelevant, or without merit.

      To reflect the foregoing,


                                                Decision will be entered

                                      under Rule 155.
