                  T.C. Summary Opinion 2006-154



                     UNITED STATES TAX COURT



           BRUCE K. AND MARINA V. NEY, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10257-05S.            Filed September 19, 2006.


     Bruce K. and Marina V. Ney, pro sese.

     Roger W. Bracken, for respondent.



     PANUTHOS, Chief Special Trial Judge:    This case was heard

pursuant to the provisions of section 7463 of the Internal

Revenue Code in effect at the time the petition was filed.   The

decision to be entered is not reviewable by any other court, and

this opinion should not be cited as authority.    Unless otherwise

indicated, subsequent 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.
                                - 2 -

     This matter is before the Court on the parties’

cross-motions for partial summary judgment pursuant to Rule

121(a).

     Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials.    Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988).    Summary judgment may be

granted with respect to all or any part of the legal issues in

controversy “if the pleadings, answers to interrogatories,

depositions, admissions, and any other acceptable materials,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that a decision may be

rendered as a matter of law.”   Rule 121(a) and (b); Sundstrand

Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965

(7th Cir. 1994); Naftel v. Commissioner, 85 T.C. 527, 529 (1985).

The moving party bears the burden of proving that there is no

genuine issue of material fact, and factual inferences will be

read in a manner most favorable to the party opposing summary

judgment.   Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985);

Jacklin v. Commissioner, 79 T.C. 340, 344 (1982).

     The issue for decision is whether a claimed charitable

contribution deduction should be disallowed for failure to meet

the substantiation requirements under section 1.170A-13(c),

Income Tax Regs.   We are satisfied that there is no genuine issue

as to any material fact and that a decision may be rendered as a
                                - 3 -

matter of law.   As explained in detail below, we shall grant

respondent’s motion for partial summary judgment and deny

petitioners’ motion for partial summary judgment.1

                              Background

     Petitioners owned two parcels of land in Felton, Delaware,

which the parties refer to as Procko Farm and Webber Farm,

respectively (collectively, the properties).    In the late 1990s,

petitioners contacted the Delaware Agricultural Lands

Preservation Foundation (DALPF) about selling their development

rights to the properties.    DALPF is a State instrumentality that

was established, in part, to prevent the conversion of Delaware’s

existing farmland to industrial or residential use.    DALPF

accomplishes this goal by purchasing development rights to

agricultural lands.   Landowners who sell their development rights

retain title to their property, but they agree to use it solely

for agriculture or related purposes.

     At DALPF’s request, the properties were appraised by Real

Property Consultants, Inc. (RPC).    RPC inspected both Procko Farm

and Webber Farm in November 1999 and prepared an appraisal

document for each property.    RPC appraised the development rights

to Procko Farm at $222,921 and the development rights to Webber


     1
       In their motion   for partial summary judgment, petitioners
also seek to shift the   burden of proof to respondent pursuant to
sec. 7491(a). Because    we render a decision as a matter of law,
we decide the parties’   motions without regard to the burden of
proof.
                                - 4 -

Farm at $181,973.    Each RPC appraisal document indicates an

appraisal date of November 23, 1999, and states:     “The purpose of

this appraisal is to estimate the market value of the subject

property’s development rights in accordance with the Delaware

Agricultural Lands Preservation Foundation.”    (Emphasis omitted.)

Neither appraisal document states that it was prepared for income

tax purposes.

     In April 2000, petitioners commissioned a second company,

Dover Consulting Services, Inc. (DCS), to appraise Webber Farm.

DCS valued the Webber Farm development rights at $238,007 as of

April 25, 2000.    The appraisal document states that it was

prepared to “[derive] the market value of the development rights

of the property in accordance with the Delaware Agricultural

Lands Preservation Foundation provisions, and for no other use.”

The appraisal document does not state that it was prepared for

income tax purposes.2    For convenience, we refer collectively to

the RPC appraisals and the DCS appraisals as the 2000 appraisals.

     On February 12, 2001, petitioners sold the development

rights to Procko Farm to DALPF for $100,487.3    On the same day,

petitioners sold the development rights to Webber Farm to DALPF

for $101,572.




     2
         DCS did not appraise Procko Farm in 2000.
     3
         All amounts are rounded to the nearest dollar.
                                - 5 -

     Petitioners filed their joint 2001 Federal income tax return

on April 15, 2002, reporting a noncash charitable contribution of

$210,306.4    Attached to their return was a Form 8283, Noncash

Charitable Contributions.    Form 8283 instructs the taxpayer to

provide, inter alia, a description of the donated property, the

date of its acquisition, and, if the property was sold in a

“bargain sale”, the amount the taxpayer received from the donee.

Petitioners’ Form 8283 describes the donated property as

“Farmland” and lists the date of acquisition as “Various”.     It

does not identify the contribution as a bargain sale or indicate

that petitioners received payment from DALPF.

     Form 8283 includes a section titled “Donee Acknowledgment”.

This section instructs the donee to acknowledge that it is a

qualified organization under section 170(c) and that it received

the property in question.    Petitioners’ Form 8283 was not signed

by a representative of DALPF.

     Form 8283 also includes a section titled “Declaration of

Appraiser”.    This section instructs the appraiser of the donated

property to sign the following statement:

     I declare that I am not the donor, the donee, a party
     to the transaction in which the donor acquired the
     property, employed by, or related to any of the
     foregoing persons * * *. And, if regularly used by the
     donor, donee, or party to the transaction, I performed



     4
       Because petitioners reported adjusted gross income of
$19,561, their claimed deduction was limited to $9,781.
                               - 6 -

     the majority of my appraisals during my tax year for
     other persons.

     Also, I declare that I hold myself out to the public as
     an appraiser or perform appraisals on a regular basis;
     and that because of my qualifications as described in
     the appraisal, I am qualified to make appraisals of the
     type of property being valued. * * * Furthermore, I
     understand that a false or fraudulent overstatement of
     the property value as described in the qualified
     appraisal or this * * * [Form 8283] may subject me to
     the penalty under section 6701(a) (aiding and abetting
     the understatement of tax liability). * * *

The Form 8283 attached to petitioners’ tax return was not signed

by an appraiser.

     Respondent examined petitioners’ 2001 tax return and sent

petitioners an Information Document Request (IDR) in May 2004.

The IDR requests a Form 8283 signed by the appraiser and the

donee, as well as complete real estate appraisals for Procko Farm

and Webber Farm.   The IDR advises petitioners to “be sure that

the appraisal reports that you submit are ‘qualified appraisals’

as defined in Treasury Regulation, Section 1.170A-13(c)(3).”

     In July 2004, petitioners provided respondent with a

separate Form 8283 for each of the properties.   The Forms 8283

were signed by a representative of DALPF but were not signed by

an appraiser.   A letter from William Denman, an attorney for

DALPF, explains that the appraisers from RPC were not willing to

sign the Forms 8283.

     Respondent issued petitioners a notice of deficiency in June

2005.   Respondent disallowed in full the claimed deduction and
                                 - 7 -

determined a $46,628 deficiency in petitioners’ 2001 income tax.

Petitioners filed a petition for review of respondent’s

determination.    Petitioners resided in Magnolia, Delaware, when

their petition was filed.

     In November 2005, DCS prepared an additional appraisal

document for each property (the 2005 appraisals).      Each appraisal

document states that it was prepared “for tax purposes” and to

provide a “retrospective market value” of the subject property as

of February 12, 2001.    DCS appraised the development rights to

Procko Farm at $180,000 and the development rights to Webber Farm

at $200,000.     Petitioners provided respondent with copies of the

appraisal documents in February 2006, along with a Form 8283

signed by Philip McGinnis, president of DCS.

                              Discussion

     Deductions are a matter of legislative grace and are allowed

only as specifically provided by statute.       INDOPCO, Inc. v.

Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v.

Helvering, 292 U.S. 435, 440 (1934).       In general, section 170(a)

allows as a deduction any charitable contribution made within the

taxable year.5    A taxpayer who sells a property interest for less


     5
       Sec. 170(f)(3) generally does not permit a deduction for a
charitable gift of property consisting of less than the donor’s
entire interest in the property. Turner v. Commissioner, 126
T.C. 299, 311 (2006). An exception applies in the case of a
“qualified conservation contribution.” Sec. 170(f)(3)(B)(iii);
see also sec. 170(h)(1) (defining qualified conservation
                                                   (continued...)
                                - 8 -

than fair market value (i.e., makes a “bargain sale”) to a

charity is typically entitled to a charitable contribution

deduction equal to the difference between the fair market value

of the property interest and the amount realized from the sale.

See Stark v. Commissioner, 86 T.C. 243, 255-256 (1986); Musgrave

v. Commissioner, T.C. Memo. 2000-285; sec. 1.170A-4(c)(2), Income

Tax Regs.    A charitable contribution is allowed as a deduction,

however, only if verified under regulations prescribed by the

Secretary.   Sec. 170(a)(1); Stark v. Commissioner, supra at 256.

     In 1984, Congress enacted section 155 of the Deficit

Reduction Act of 1984 (DEFRA), Pub. L. 98-369, 98 Stat. 691.

DEFRA section 155 instructs the Secretary to prescribe heightened

substantiation requirements for certain noncash charitable

contributions.    DEFRA section 155 provides that the regulations

shall require the taxpayer:   (1) To obtain a qualified appraisal

of the property; (2) to attach an appraisal summary to the tax

return on which the deduction is claimed; and (3) to include on

the tax return such additional information as the Secretary may

prescribe.   DEFRA section 155 provides the following definitions:




     5
      (...continued)
contribution). Because we shall grant respondent’s motion for
partial summary judgment, we need not decide whether the sale of
development rights to DALPF constitutes a qualified conservation
contribution.
                               - 9 -

          (3) Appraisal summary.--For purposes of this
     subsection, the appraisal summary shall be in such form
     and include such information as the Secretary
     prescribes by regulations. Such summary shall be
     signed by the qualified appraiser preparing the
     qualified appraisal and shall contain the TIN of such
     appraiser. Such summary shall be acknowledged by the
     donee of the property appraised in such manner as the
     Secretary prescribes in such regulations.

          (4) Qualified appraisal.--The term “qualified
     appraisal” means an appraisal prepared by a qualified
     appraiser which includes--
            (A) a description of the property appraised,
            (B) the fair market value of such property on
     the date of contribution and the specific basis for the
     valuation,
            (C) a statement that such appraisal was prepared
     for income tax purposes,
            (D) the qualifications of the qualified
     appraiser,
            (E) the signature and TIN of such appraiser, and
            (F) such additional information as the Secretary
     prescribes in such regulations.

     The principal objective of DEFRA section 155 was to allow

the Commissioner to obtain sufficient return information in order

to deal more effectively with the prevalent use of charitable

contribution overvaluations.   Hewitt v. Commissioner, 109 T.C.

258, 265 (1997) (citing S. Comm. on Finance, Deficit Reduction

Act of 1984, Explanation of Provisions Approved by the Committee

on March 21, 1984, S. Prt. 98-169 (Vol. I), at 444-445 (S. Comm.

Print 1984), and Staff of Joint Comm. on Taxation, General

Explanation of the Revenue Provisions of the Deficit Reduction

Act of 1984 (J. Comm. Print 1985)), affd. without published

opinion 166 F.3d 332 (4th Cir. 1998).
                                 - 10 -

I.   Substantiation Requirements

      Pursuant to DEFRA section 155, the Secretary has prescribed

regulations for taxpayers claiming deductions in excess of $5,000

for certain charitable contributions of property.      See generally

sec. 1.170A-13(c), Income Tax Regs.       The regulations require the

taxpayer, inter alia, to obtain a qualified appraisal and attach

a fully completed appraisal summary to the tax return.       Sec.

1.170A-13(c)(2)(i), Income Tax Regs.      The regulations provide

detailed definitions for the terms “qualified appraisal” and

“appraisal summary”, as well as for other pertinent terms.      We

discuss only those portions of the definitions that are relevant

to the parties’ motions.

      A.   Qualified Appraisal

      A qualified appraisal is an appraisal document that:     (1)

Relates to an appraisal that is made not earlier than 60 days

before the date of contribution of the appraised property nor

later than the due date of the return on which a deduction is

first claimed; (2) is prepared, signed, and dated by a qualified

appraiser; (3) includes a statement that the appraisal was

prepared for income tax purposes; and (4) includes the appraised

fair market value of the property on the date (or expected date)

of contribution.    Sec. 1.170A-13(c)(3)(i)(A), (B), (ii)(G), (I),

(iv)(B), Income Tax Regs.
                                - 11 -

     B.   Qualified Appraiser

     A qualified appraiser is an individual who includes on the

appraisal summary a declaration that:    (1) The individual either

holds himself or herself out to the public as an appraiser or

performs appraisals regularly; (2) the appraiser is qualified to

make appraisals of the type of property being valued; and (3) the

appraiser understands that an intentionally false or fraudulent

overstatement of the value of the property described in the

qualified appraisal or appraisal summary may subject the

appraiser to a civil penalty under section 6701 for aiding and

abetting an understatement of tax liability.   Sec. 1.170A-

13(c)(5)(i)(A), (B), (D), Income Tax Regs.   An individual is not

a qualified appraiser if the individual is the donor, the donee,

any person employed by the donor or donee, or an appraiser who is

regularly used by the donor or donee and who does not perform

most of his or her appraisals for other persons.   Sec. 1.170A-

13(c)(5)(iv)(A), (C), (D), (F), Income Tax Regs.

     C.   Appraisal Summary

     An appraisal summary means a summary of a qualified

appraisal that:   (1) Is made on the form prescribed by the

Internal Revenue Service (Form 8283); (2) is signed and dated by

the qualified appraiser who prepared the qualified appraisal; (3)

is signed and dated by the donee; and (4) includes the following

information:
                                - 12 -

           (B) A description of the property in sufficient
      detail for a person who is not generally familiar with
      the type of property to ascertain that the property
      that was appraised is the property that was
      contributed;

                *     *     *     *      *   *       *

           (D) The manner of acquisition (e.g., purchase,
      exchange, gift, or bequest) and the date of acquisition
      of the property by the donor * * *;

                *     *     *     *      *   *       *

           (H) For charitable contributions made after June
      6, 1988, a statement explaining whether or not the
      charitable contribution was made by means of a bargain
      sale and the amount of any consideration received from
      the donee for the contribution;

           (I) The name, address, and * * * the identifying
      number of the qualified appraiser who signs the
      appraisal summary * * *;

           (J) The appraised fair market value of the
      property on the date of contribution;

           (K) The declaration by the appraiser described in
      paragraph (c)(5)(i) of this section [regarding the
      imposition of a penalty under section 6701 for aiding
      and abetting an understatement of tax liability];

                *     *     *     *      *   *       *

           (M) Such other information as may be specified by
      the form.

Sec. 1.170A-13(c)(4)(i) and (ii), Income Tax Regs.

II.   Petitioners’ Compliance With the Substantiation Requirements

      A.   Strict Compliance

      Petitioners concede that they did not strictly comply with

the substantiation requirements in the regulations.      Indeed, the

2000 appraisals were made more than 60 days before the date of
                              - 13 -

contribution; they do not state that they were prepared for

income tax purposes; and they do not appraise Procko Farm and

Webber Farm on the date of contribution.    See sec. 1.170A-

13(c)(3)(i)(A), (G), (I), Income Tax Regs.    In addition,

petitioners concede that RPC was not a qualified appraiser

because RPC was employed by DALPF.     See sec. 1.170A-13(c)(5)(iv),

Income Tax Regs.

     With respect to the 2005 appraisals by DCS, the appraisal

documents state that they were prepared “for tax purposes” and

that they are valuing the properties as of the date of

contribution.   However, the appraisals were made more than 3

years after the due date of petitioners’ tax return and therefore

were not timely.   See sec. 1.170A-13(c)(3)(i)(A), Income Tax

Regs.

     In addition to these defects, the Form 8283 attached to

petitioners’ tax return was not signed by an appraiser or by the

donee; it does not list the date of acquisition for either

property; and it does not state whether either contribution was

made by means of a bargain sale or indicate that petitioners

received payments from DALPF.6   See sec. 1.170A-13(c)(4)(i) and

(ii), Income Tax Regs.



     6
       In their motion for partial summary judgment, petitioners
assert that the sale of development rights to DALPF was a bargain
sale. Petitioners have not explained why they failed to describe
it as such on the Form 8283, Noncash Charitable Contributions.
                               - 14 -

     B.    Substantial Compliance

     Having failed to strictly comply with the substantiation

requirements, petitioners assert they are entitled to a deduction

because they substantially complied with the regulations.

     The doctrine of substantial compliance is designed to avoid

hardship in cases where a party does all that can reasonably be

expected of him, but he nonetheless has failed to comply with the

requirements of a statutory provision.       Estate of Chamberlain v.

Commissioner, T.C. Memo. 1999-181, affd. 9 Fed. Appx. 713 (9th

Cir. 2001).    This Court has applied the substantial compliance

doctrine and excused taxpayers from strict compliance with

procedural regulatory requirements, provided that the taxpayers

substantially complied by fulfilling the essential statutory

purpose.    Id. (and cases cited therein).

     Petitioners rely primarily on Bond v. Commissioner, 100 T.C.

32 (1993).    In Bond, the taxpayers contributed property that was

appraised by a qualified appraiser within the specified period.

The appraiser signed the Form 8283 and included on it nearly all

of the information required in a qualified appraisal.         The

appraiser did not prepare a separate appraisal document, however,

nor did he list his qualifications on the Form 8283.       Id. at 34.

Shortly after the Commissioner began examining the taxpayers’ tax

return, the appraiser provided the Government with a letter

describing his qualifications in detail.      Id. at 34-35.    The
                              - 15 -

Commissioner nevertheless disallowed the claimed deduction

because the taxpayers had failed to strictly comply with the

requirements set forth in the regulations.   The taxpayers sought

review in this Court.

     To decide whether the doctrine of substantial compliance

applied, the Court examined whether the requirements of the

regulations are mandatory or directory with respect to the

purpose of section 170.   Id. at 41.   We held that

     At the outset, it is apparent that the essence of
     section 170 is to allow certain taxpayers a charitable
     deduction for contributions made to certain
     organizations. It is equally apparent that the
     reporting requirements of section 1.170A-13, Income Tax
     Regs., are helpful to respondent in the processing and
     auditing of returns on which charitable deductions are
     claimed. However, the reporting requirements do not
     relate to the substance or essence of whether or not a
     charitable contribution was actually made. We
     conclude, therefore, that the reporting requirements
     are directory and not mandatory. * * * [Id.]

     The Court then concluded that because the taxpayers had

provided substantially all of the information specified in the

regulations, “The denial of a charitable deduction * * * would

constitute a sanction which is not warranted or justified.”      Id.

at 42.   We noted, however, that Bond was not a case where the

taxpayers failed to obtain a timely appraisal of the donated

property and thereby failed to establish its value.   Id.

     Petitioners argue that, like the taxpayers in Bond, they

substantially complied with the regulations.   Denying them a
                                - 16 -

deduction for failure to strictly comply with the regulations

would, petitioners believe, constitute an unwarranted sanction.

     Respondent, in contrast, argues that petitioners did not

substantially comply with the regulations.   Respondent argues

that Bond is distinguishable because petitioners failed to obtain

a qualified appraisal.    Respondent argues that petitioners’ case

is more factually similar to cases such as Hewitt v.

Commissioner, 109 T.C. 258 (1997), and D’Arcangelo v.

Commissioner, T.C. Memo. 1994-572.

     In Hewitt, the taxpayers donated non-publicly traded stock.

The taxpayers claimed a charitable contribution deduction and

attached a Form 8283 to their tax return.    The taxpayers did not

have the stock appraised.    Instead, they calculated the value of

the stock on the basis of prices reflected in recent third-party

trading activity.   Hewitt v. Commissioner, supra at 259-260.    The

Commissioner did not dispute that the amount of the claimed

deduction represented the fair market value of the contributed

stock.   Nevertheless, the Commissioner disallowed most of the

claimed deduction because the taxpayers had not obtained a

qualified appraisal.     Id. at 262.

     The Court held that the taxpayers had not substantially

complied with the regulations.    In distinguishing Bond v.

Commissioner, supra, we noted that “the reporting requirements of

section 1.170A-13, Income Tax Regs., were directory, not
                                - 17 -

mandatory,” but “nothing in Bond * * * relieves * * * [the

taxpayers] of the requirement of obtaining a qualified

appraisal.”    Hewitt v. Commissioner, supra at 263-264.   Although

the value of the stock was not in dispute, the qualified

appraisal requirement is imposed by DEFRA section 155.     Id. at

264.    The doctrine of substantial compliance could not excuse the

taxpayers’ failure to comply with that requirement.    Id. at 265-

266.

       In D’Arcangelo v. Commissioner, supra, the taxpayers donated

art supplies to a high school and claimed a charitable

contribution deduction.    The taxpayers attached a Form 8283 to

their tax return along with a “letter of appraisal” from the high

school principal.    At trial, the taxpayers also introduced expert

testimony concerning the value of the donated property.

       The Court held that the taxpayers had failed to obtain a

qualified appraisal and, therefore, had not substantially

complied with the regulations.    The principal was not a qualified

appraiser because he was employed by the donee and did not

regularly perform appraisals.    The taxpayers’ expert witness

performed only a cursory inspection of the donated items several

years before the date of contribution, and he was generally

unfamiliar with the condition of the items as of that date.      We

stated that, unlike the taxpayers in Bond, the taxpayers “did not

merely fail to attach evidence of a qualified appraisal, they
                               - 18 -

altogether failed to obtain a qualified appraisal.”    D’Arcangelo

v. Commissioner, supra.

     Turning to the facts of the instant case, we agree with

respondent that petitioners did not substantially comply with the

regulations.    For the reasons discussed supra, none of the

appraisals that petitioners obtained is a qualified appraisal.

Unlike the reporting requirements at issue in Bond, the qualified

appraisal requirement is mandatory, not merely directory.      Our

caselaw is clear that we cannot apply the doctrine of substantial

compliance to excuse a taxpayer’s failure to meet this

requirement.    See, e.g., Hewitt v. Commissioner, supra at 264-

266; D’Arcangelo v. Commissioner, supra.

     We also note that the requirements that the appraiser and

the donee sign the Form 8283 also appear to be mandatory.      By

signing the appraiser’s declaration, the appraiser potentially

subjects himself to a penalty under section 6701.   This

requirement serves the purpose of DEFRA section 155 by

discouraging the overvaluation of charitable contributions.      See

Hewitt v. Commissioner, supra at 265 (and the legislative history

cited thereat); see also Estate of Chamberlain v. Commissioner,

T.C. Memo. 1999-181 (“substantial compliance cannot be applied if

to do so would defeat the policies of the underlying statutory

provisions”).   By signing the donee’s acknowledgment, the donee

asserts that it is a charitable organization.   This requirement
                              - 19 -

thus relates to “the substance or essence of whether or not a

charitable contribution was actually made.”     See Bond v.

Commissioner, supra at 41.

     Petitioners argue that the regulations provide relief for

failure to comply with the substantiation requirements.       For

example, the regulations provide that if it is impossible for the

taxpayer to obtain the donee’s signature on the appraisal

summary, the taxpayer’s deduction will not be disallowed provided

the taxpayer attaches a statement to the appraisal summary

explaining why it was not possible to obtain the donee’s

signature.   Sec. 1.170A-13(c)(4)(iv)(C)(2), Income Tax Regs.

Petitioners have not asserted that it was impossible to obtain

the donee’s signature, however, nor did they attach an

explanatory statement to the Form 8283.

     The regulations also provide that if the taxpayer fails to

attach the appraisal summary to the tax return, the Internal

Revenue Service may request that the taxpayer submit the

appraisal summary within 90 days of the request.    Sec. 1.170A-

13(c)(4)(iv)(H), Income Tax Regs.   If such a request is made and

the donor complies, a deduction will not be disallowed provided

that, inter alia, the donor’s failure to attach the appraisal

summary was a good faith omission and a qualified appraisal was

completed within the specified period.    Id.   Because petitioners
                                - 20 -

did not obtain a qualified appraisal within the specified period,

however, this exception does not apply.

       We conclude that petitioners did not substantially comply

with section 1.170A-13(c), Income Tax Regs.     Accordingly,

petitioners are not entitled to a noncash charitable contribution

deduction.

III.    Petitioners’ Remaining Arguments

       Petitioners raise a number of additional arguments regarding

the issue of substantial compliance, as well as other issues in

their case.     We address these arguments below.

       A.   Curing a Failure To Comply With the Regulations

       Petitioners argue that, “taken as a whole”, the documents

they provided to respondent--including the 2005 appraisals--

satisfy the requirements of the regulations.     Although

petitioners did not obtain or provide all of the documents within

the prescribed period, petitioners contend they should be allowed

to cure any defects in the original appraisals and the appraisal

summary.     We disagree.

       DEFRA section 155 provides that the appraisal summary must

be attached to the taxpayer’s tax return and signed by the

qualified appraiser.     See DEFRA sec. 155(a)(1)(B).    Thus, the

qualified appraisal and the appraisal summary must be completed

no later than the due date of the tax return.       As discussed

supra, while the regulations provide limited relief from certain
                              - 21 -

timing requirements, those provisions are inapplicable to

petitioners’ case.   Nothing in DEFRA section 155 indicates that

taxpayers are otherwise allowed to cure a failure to comply with

the timing requirements.

     B.   Equitable Considerations

     Petitioners argue that denying them a deduction would be

inequitable.   Petitioners contend they donated something of value

to DALPF and should not be denied a deduction for failing to

comply with an arbitrary deadline.

     We note, first, that we are not a court of equity and do not

possess general equitable powers.    Stovall v. Commissioner, 101

T.C. 140, 149-150 (1993); Knight v. Commissioner, T.C. Memo.

1998-107.   “‘There is no general judicial power to relieve from

deadlines fixed by legislatures’”.     Dirks v. Commissioner, T.C.

Memo. 2004-138 (quoting Prussner v. United States, 896 F.2d 218,

223 (7th Cir. 1990)), affd. 154 Fed. Appx. 614 (9th Cir. 2005).

     Second, “‘deadlines, like statutes of limitations,

necessarily operate harshly and arbitrarily with respect to

individuals who fall just on the other side of them’”.    Dirks v.

Commissioner, supra (quoting United States v. Locke, 471 U.S. 84,

101 (1985)).   Nevertheless, “‘The legal system lives on fixed

deadlines; their occasional harshness is redeemed by the clarity

which they impart to legal obligation.’”    Id. (quoting Prussner

v. United States, supra at 222).
                                - 22 -

     Furthermore, we note that petitioners had approximately 16

months in which to obtain a qualified appraisal.7    Petitioners

have not explained why they were unable to secure a qualified

appraisal within that period.     Nor did petitioners “‘fall just on

the other side’” of the deadline.    See id.   The 2000 appraisals

were made more than 9 months before the date of contribution.

The 2005 appraisals were made more than 3 years after the due

date of petitioners’ tax return.    Thus, we are not faced with a

situation where the taxpayer has done “all that can reasonably be

expected of him”.   See Estate of Chamberlain v. Commissioner,

T.C. Memo. 1999-181.

     Third, as mentioned supra, DEFRA section 155 is not

primarily concerned with whether a charitable contribution has

been made.   Hewitt v. Commissioner, 109 T.C. at 265.    Rather,

DEFRA section 155 is concerned with substantiating the value of

the contributed property.   Id.    Thus, even if petitioners made a

charitable contribution, they must meet the substantiation

requirements to claim a deduction.

     C.   Respondent’s Alleged Wrongdoing

     Petitioners allege that respondent acted improperly during

the examination of their tax return.     We need not address


     7
       Petitioners sold their development rights on Feb. 12,
2001. Sixty days before that date is Dec. 14, 2000. Petitioners
had from that time until the due date of their tax return on Apr.
15, 2002, to obtain a qualified appraisal. See sec.
1.170A-13(c)(3)(i)(A), (iv)(B), Income Tax Regs.
                              - 23 -

petitioners’ contentions at this time.     Suffice it to say the

issue before us is whether petitioners complied with the

substantiation requirements of the regulations.     Petitioners’

allegations, even if they are true, do not affect the resolution

of this issue.

     D.   The Gain From the Sale of the Development Rights

     Finally, in the notice of deficiency respondent determined

an unreported capital gain of $96,420 resulting from the sale of

petitioners’ development rights.    Although petitioners assert

that no gain resulted from the sale, they have failed to prove

that the material facts are not in dispute.     Accordingly, this

issue is not appropriate for summary judgment.     See Rule 121(a)

and (b); Naftel v. Commissioner, 85 T.C. at 529.

                            Conclusion

     We conclude that petitioners did not comply with the

regulations and, therefore, are not entitled to a noncash

charitable contribution deduction.     In reaching our holding, we

have considered all arguments made, and, to the extent not

mentioned, we conclude that they are moot, irrelevant, or without

merit.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing,


                                      An appropriate order will be

                                 issued.
