                     T.C. Summary Opinion 2012-4



                       UNITED STATES TAX COURT



              JAMES EDWIN BLACKBURN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14094-10SL.            Filed January 5, 2012.



     James Edwin Blackburn, pro se.1

     John R. Bampfield, for respondent.



     GOEKE, Judge:   This case was heard pursuant to the

provisions of section 74632 in effect when the petition was



     1
      Katie Tolliver (Tolliver) and Mary Gillum (Gillum)
represented petitioner at the trial of this case. Shortly after
trial, Tolliver and Gillum filed a motion for leave to withdraw
their appearances. The Court granted the motion on Aug. 1, 2011.
     2
      Section references are to the Internal Revenue Code, and
Rule references are to the Tax Court Rules of Practice and
Procedure.
                                 - 2 -

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.

     Petitioner seeks judicial review of respondent’s notice of

determination sustaining the proposed collection via levy of an

income tax liability for 2006.    We have jurisdiction under

section 6330(d).   For the reasons explained herein we sustain the

collection action for a reduced liability.

                            Background

     Petitioner James Edwin Blackburn lived in Tennessee when he

filed a timely petition seeking this Court’s review of the notice

of determination which sustained the proposed levy after an

administrative review.

     Mr. Blackburn had previously filed a timely income tax

return for 2006, and the return was selected for audit by the

Internal Revenue Service (IRS).    The IRS disallowed unreimbursed

employee business expense deductions claimed on the return, and a

notice of deficiency was issued in March 2009.    No petition to

this Court was filed after this notice of deficiency.    At trial

we determined that Mr. Blackburn’s testimony regarding his

failure to receive the notice of deficiency was credible, and we

allowed him to present evidence in support of his position that

his 2006 tax liability was overstated.
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     Mr. Blackburn offered a Form 1040X, Amended U.S. Individual

Income Tax Return, for 2006 at trial as an exhibit, and the Court

accepted it into the record.    The Form 1040X reflected no income

tax due for 2006, but we must determine whether the deductions

reflected on this Form 1040X are supported by the substantiating

evidence in the trial record.

     On brief, respondent has conceded that Mr. Blackburn has

substantiated unreimbursed employee business expenses as follows:

               Auto insurance              $1,000

               Auto registration fee           27

               Auto repairs                   837

               Auto depreciation            2,560

Respondent also concedes a tax preparation fee deduction of $148.

     Mr. Blackburn’s Form 1040X reflects itemized deductions of

$29,897, including State taxes of $1,062, home mortgage interest

of $7,154, gifts to charity of $2,476, a tax preparation fee

allowed by respondent, and unreimbursed employee business

expenses totaling $20,016, which were then reduced to $19,205 by

the 2-percent of adjusted gross income limitation.

     Mr. Blackburn drove his automobile for a substantial number

of miles as part of his employment with Performance Sales &

Marketing, but he failed to maintain a contemporaneous log of his

business-related travel.   He maintains that virtually 100 percent
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of his mileage was business related.       He was reimbursed by his

employer for fuel expenses, food expenses, and a significant

portion of his lodging expense.

     Mr. Blackburn also claims home office expenses as part of

the unreimbursed employee business expense deduction.       However,

he did not support his claim with either testimony or adequate

documentation.   The disputed amounts also include State sales

taxes and an additional deduction for home mortgage interest.

     Respondent allowed Mr. Blackburn to raise his liability

argument in a supplemental administrative proceeding after this

case was docketed, but the settlement officer denied that any

change in the liability amount was warranted because Mr.

Blackburn had failed to timely supply information.

                              Discussion

     Mr. Blackburn has the burden to substantiate the expenses

not conceded by respondent.    See Rule 142(a).     He has not argued

that section 7491 would shift the burden to respondent, and the

provisions of that section have not been met in any event.

     Respondent’s administrative determination is reviewed for

abuse of discretion.   In a levy case, when the underlying

liability is properly at issue, the Court reviews the Appeals

employee’s determination de novo.       Goza v. Commissioner, 114 T.C.

176, 182 (2000).   Whether a taxpayer may challenge the underlying

liability is decided by the Court de novo.       Sego v. Commissioner,
                                - 5 -

114 T.C. 604, 609-610 (2000).    We have found that Mr. Blackburn

did not receive a notice of deficiency and therefore he may

challenge the liability.    See sec. 6330(c)(2)(B).    His only

dispute with respondent’s determination concerns the liability.

       All reasonable and ordinary expenses incurred during a

taxable year for the production of income are deductible.      Sec.

212.    However, any such deductible expense must be substantiated

by adequate records.    Sec. 6001.

       Certain expenses can be deducted only if the taxpayer can

substantiate (1) the amount of the expense, (2) the time and

place the expense was incurred, and (3) the business purpose of

the expense.    Sec. 274(d); sec. 1.274-5A(b)(2), Income Tax Regs.

Such expenses include meals and entertainment expenses, travel

expenses, and expenses related to an automobile.      Secs. 274(d),

280F(d)(4).    The strict substantiation requirements provide that

a taxpayer submit a contemporaneous record to establish that he

meets the elements of section 274(d).    Sec. 1.274-5T(c),

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

       Mr. Blackburn has provided no documentation regarding his

meals and entertainment expenses or his nonautomobile expenses.

He has provided some contemporaneous records regarding his

automobile expenses, but they are generally insufficient to

substantiate the number of miles driven and when and where he

drove for business.    See sec. 1.274-5T(c), Temporary Income Tax
                                - 6 -

Regs., supra.    Accordingly, he is not entitled to deduct any

travel expenses other than those respondent conceded.

     Regarding the home office expense, Mr. Blackburn has failed

to establish the portion of his home which was devoted to his

employment, nor did he establish in the record that the

additional mortgage interest expense was his personal expense.

Respondent points out that one of the Forms 1098, Mortgage

Interest Statement, which respondent received from Mr. Blackburn

after trial regarding additional mortgage interest reflects an

additional person as joint payee.    Respondent argues that Mr.

Blackburn did not seek to have this document stipulated into the

record and also failed to testify regarding who paid the interest

in question.    We agree with respondent and find that Mr.

Blackburn has failed to carry his burden of proof regarding the

home office expense and the additional mortgage interest expense

and also that he did not properly raise these issues with the

settlement officer.    See Giamelli v. Commissioner, 129 T.C. 107

(2007).

     The remaining disputed item is the State sales tax.

Respondent argues this item was not timely raised.    However, we

do not find this argument is correct regarding the State tax

issue, and we find that a deduction for State tax of $1,062 is

allowable.   Finally, we find respondent has not contested the
                                 - 7 -

claimed charitable contribution deduction of $2,476 and the home

mortgage interest deduction of $1,850.

     Because of our findings and the concessions, a Rule 155

computation is required.

     To reflect the foregoing,


                                          Decision will be entered

                                     under Rule 155.
