                        T.C. Memo. 2004-26



                      UNITED STATES TAX COURT



           JON A. AND LINDA A. JEWETT, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 16437-02.               Filed February 3, 2004.


     Steven R. Stolar, for petitioners.

     Ric D. Hulshoff, for respondent.


                        MEMORANDUM OPINION


     PAJAK, Special Trial Judge:   Respondent determined a

deficiency in petitioners’ Federal income tax of $2,273 for the

taxable year 1999.   Unless otherwise indicated, section

references are to the Internal Revenue Code in effect for the

year in issue, and all Rule references are to the Tax Court Rules

of Practice and Procedure.

     The issue for decision is whether petitioners are entitled
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to deduct actual travel expenses.

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

Petitioners resided in Reno, Nevada, at the time their petition

was filed.

     Because petitioners did not meet the substantiation and

recordkeeping requirements of section 7491(a)(2), the burden of

proof remains on petitioners.   Rule 142(a).

     Through 1999, petitioner husband (petitioner) was a merchant

seaman.   During 1999, he was the Chief Engineer on the S.S.

Sealand Producer, a container ship.     His typical tour of duty was

56 days, plus 1 day travel each way between his home and the port

where his tour began, for a total of 58 days.    The ship traveled

to various ports, principally in the Caribbean and Gulf of

Mexico.   Meals and lodging were provided by petitioner’s employer

and were available to him during the periods in 1999 that he was

assigned to a vessel and on active status.     Petitioner testified

that while in port he would leave the ship and incur expenses on

shore.

     Petitioners filed a Form 1040, U.S. Individual Income Tax

Return, for their 1999 taxable year (return).    On Schedule A,

Itemized Deductions, attached to petitioners’ return, petitioners

claimed a deduction for “Meals & Incidental Expenses (full M &

IE)” in the total amount of $11,147.    Petitioners alleged that

this deduction was “deemed substantiated” pursuant to Rev. Proc.
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98-64, 1998-2 C.B. 825.   The parties stipulated that this full M

& IE rate deduction purportedly was supported by a “Sailor Travel

Statement” attached to petitioners’ return.

     After petitioners’ return was filed, Johnson v.

Commissioner, 115 T.C. 210 (2000), was issued.

     During the examination of petitioners’ return, petitioners

conceded that they were not entitled to the full M & IE rate

deduction as claimed.   Instead, petitioners conceded they were

entitled to the lesser total amount of $1,978, which represents

the “incidental expense” portion of the M & IE rate, as allowed

by Johnson v. Commissioner, supra.

     The $9,169 adjustment in the notice of deficiency represents

the subtraction of the “incidental expense” of $1,978 from the

$11,147 expense claimed on petitioners’ return.

     Petitioners now seek a deduction for “actual expenses”

incurred while in the course of travel.

     As this Court noted in Johnson v. Commissioner, supra at

228, “taxpayers, to the extent that the amounts set forth in the

revenue procedures fail to reflect the actual cost of their

incidental expenditures, are entitled to a deduction for their

actual expenses.   In such a situation, however, taxpayers must be

prepared to meet all the substantiation requirements, including,

especially, written documentation as to the amounts of those

costs.”   The Court goes on to refer to the section 274
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regulations which except taxpayers from strict substantiations in

the case of expenditures of less than a prescribed amount.

Petitioner, like the taxpayer in Johnson, has not shown that he

made any expenditure that fits within these exceptions.     Johnson

v. Commissioner, supra at 228 n.11.

     Section 274(d) imposes stringent substantiation requirements

for the deduction of travel expenses.    Taxpayers must

substantiate by adequate means certain elements in order to claim

deductions, such as the amount of such expenditure, the date of

the expenditure or use, the place of each separate expenditure,

and the business purpose for an expenditure or use.    Sec. 274(d);

sec. 1.274-5T(b), Temporary Income Tax Regs., 50 Fed. Reg. 46014

(Nov. 6, 1985).   To substantiate a deduction by means of adequate

records, a taxpayer must maintain an account book, diary, log,

statement of expense, trip sheets, and/or other documentary

evidence, which, in combination, are sufficient to establish each

element of expenditure or use.    The log must be made at or near

the time of the expenditure.   Sec. 1.274-5T(c)(2)(i) and (ii),

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

     Petitioner claimed that he prepared a log listing his travel

expenses at or near the times of the expenditures.    We are not

required to accept petitioner’s self-serving statements.

Tokarski v. Commissioner, 87 T.C. 74, 77 (1986).     Our review of

this log leads us to conclude it was prepared at one time, and
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the entries could not have been made at or near the times of the

expenditures.   Respondent also observes that petitioners took the

position on their return that they were entitled to a deduction

based on a per diem rate without the need for substantiation, and

maintenance of a calendar log of actual expenses is inconsistent

with that position.   Respondent further commented that the return

had nearly 30 documents attached to it to support petitioners’

claim, but the log was not attached.   For the aforesaid reasons,

we do not give the purported log any credence.

     Petitioner also referred to the so-called supporting

schedule of expenses attached to the return.    This schedule bears

the name of a certified public accountant on each page.

Petitioners’ counsel stated at trial that this was prepared

during the audit.   This obviously was not made at or near the

time of any of the expenditures.   Moreover, this schedule was

attached to petitioners’ return, which was an exhibit attached to

the parties’ stipulation.   This Court has long held that the

return is merely a statement of the petitioners’ claim and does

not establish the facts contained therein.     Lamphere v.

Commissioner, 70 T.C. 391, 394 (1978); Roberts v. Commissioner,

62 T.C. 834, 837 (1974); Seaboard Commercial Corp. v.

Commissioner, 28 T.C. 1034, 1051 (1957).

     Our review of the record shows there was no record made at

or near the time of any of the expenditures claimed as actual
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expenses nor has petitioner substantiated such expenses by other

sufficient evidence.   Johnson v. Commissioner, supra.     We reject

petitioners’ position because we find that petitioners did not

substantiate the actual expenses.

     We agree that petitioners are entitled to claim the

incidental expenses, as computed in accord with Johnson, and as

allowed by respondent in the notice of deficiency.

     Accordingly, we sustain respondent’s determination.

     Contentions we have not addressed are irrelevant, moot, or

meritless.



                                            Decision will be entered

                                       for respondent.
