                  T.C. Summary Opinion 2011-103



                     UNITED STATES TAX COURT



           LEYLA AND LEOBALDO D. DIAZ, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 5634-09S.                Filed August 29, 2011.



     Leyla Diaz, pro se.

     Brian A. Pfeifer, for respondent.



     CARLUZZO, Special Trial Judge:   This case was heard pursuant

to the provisions of section 7463.1   Pursuant to section 7463(b),

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




     1
      Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended, in effect for the
relevant period. Rule references are to the Tax Court Rules of
Practice and Procedure.
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and this opinion shall not be treated as precedent for any other

case.

     In a notice of deficiency dated December 8, 2008, respondent

determined a $1,365 deficiency in petitioners’ 2006 Federal

income tax.   The issue for decision is whether petitioners are

entitled to deduct $9,090 in unreimbursed employee business

expenses.

                            Background

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

the time the petition was filed, petitioners resided in Florida.

     During 2006 Leyla Diaz (petitioner) was employed as an

assistant to the operations manager of Harkay Enterprises.

Harkay Enterprises owned and operated 11 Midas muffler shops

throughout the State of Florida (shops).   Her employment duties

varied; as she describes her responsibilities, she did whatever

the operations manager required.    On any given day she routinely

drove from one of the shops to another in order to attend

managers’ meetings, check inventory, check paperwork, enroll

employees in the company’s health insurance plan, and research

customer complaints.   She used her own automobile when it was

necessary to drive between the shops.

     Petitioner used a commercially available computer-based

spreadsheet program to create a mileage log in which she recorded

her many trips between the shops.   Each entry in the mileage log
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includes the date of the trip, the beginning and ending address

of the trip, and the mileage driven between addresses.    The

beginning and ending address for each trip recorded in

petitioner’s mileage log is the address of either Harkay

Enterprises or one of the shops.   Entries in petitioner’s mileage

log were usually made during the day of travel.   Petitioner’s

mileage log shows that petitioner drove 15,241 miles in

connection with her employment during the year in issue.

     While at work, petitioner was required to wear, as she

described the clothing, “standard khaki pants”, “regular,

standard, red polo [shirts]”, and “sneakers”.

     Petitioners subscribed to a cellular service family plan

offered by Cingular Wireless.   Each petitioner had his or her own

cell phone and designated phone number.   During the year in issue

petitioners paid $1,319.81 to Cingular Wireless in connection

with their cellular plan.   Petitioner used her cell phone for

both personal and business purposes.

     Petitioners’ timely, electronically filed 2006 joint Federal

income tax return was prepared by a paid income tax return

preparer.   The taxable income and income tax liability shown on

that return were computed with reference to petitioners’ election

to claim itemized deductions in lieu of a standard deduction.

See sec. 63.   As relevant here, the following deductions for
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unreimbursed employee business expenses are included in the

itemized deductions claimed on petitioners’ return:

             Deduction                        Amount

         Vehicle expenses                     $6,825
         Uniform and shoe expense              1,400
         Cell phone expense                    1,300
         Office expense                        1,400

     Each of the unreimbursed employee business expense

deductions listed above relates to petitioner’s employment

with Harkay Enterprises.     The deduction for vehicle expenses

is computed by applying the then-standard mileage rate of 44.5

cents per mile to 15,000 miles, plus $150 attributable to

“miscellaneous” transportation expenses.

     The above-listed deductions were disallowed in the notice of

deficiency, because according to an explanation given in the

notice, petitioner “did not establish that the business expense

* * * was paid or incurred during the taxable year and that the

expense was ordinary and necessary to * * * [her] business”.

                              Discussion

     As we have observed in countless opinions, deductions are a

matter of legislative grace, and the taxpayer bears the burden of

proof to establish entitlement to any claimed deduction.2    Rule

142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992);



     2
      Petitioners do not claim that the provisions of sec.
7491(a) are applicable, and we proceed as though they are not.
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New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).

This burden requires the taxpayer to substantiate deductions

claimed by keeping and producing adequate records that enable the

Commissioner to determine the taxpayer’s correct tax liability.

Sec. 6001; Hradesky v. Commissioner, 65 T.C. 87, 89-90 (1975),

affd. per curiam 540 F.2d 821 (5th Cir. 1976); Meneguzzo v.

Commissioner, 43 T.C. 824, 831-832 (1965).      A taxpayer claiming a

deduction on a Federal income tax return must demonstrate that

the deduction is allowable pursuant to some statutory provision

and must further substantiate that the expense to which the

deduction relates has been paid or incurred.       See sec. 6001;

Hradesky v. Commissioner, supra at 89-90; sec. 1.6001-1(a),

Income Tax Regs.

     The deductions here in dispute are allowable, if at all,

under section 162(a).   That section generally allows a deduction

for ordinary and necessary expenses paid or incurred during the

taxable year in carrying on any trade or business.      The term

“trade or business” as used in section 162(a) includes the trade

or business of being an employee.       Primuth v. Commissioner, 54

T.C. 374, 377-378 (1970); Christensen v. Commissioner, 17 T.C.

1456, 1457 (1952).    The determination of whether an expenditure

satisfies the requirements for deductibility under section 162 is

a question of fact.   See Commissioner v. Heininger, 320 U.S. 467,
                               - 6 -

475 (1943).   On the other hand, section 262(a) generally

disallows a deduction for personal, living, or family expenses.

     Expenses incurred for the use of passenger automobiles,

computers, and cellular telephones in a taxpayer’s trade or

business are not allowed as deductions unless the taxpayer

satisfies the strict substantiation requirements of section

274(d).   See secs. 274(d), 280F(d)(4)(A).   With respect to

deductions for those types of expenses, the taxpayer must

substantiate each expense by either “adequate records”, or

“sufficient evidence corroborating the taxpayer’s own statement”.

Sec. 274(d); sec. 1.274-5T(c)(1), Temporary Income Tax Regs., 50

Fed. Reg. 46016 (Nov. 6, 1985).   “To meet the ‘adequate records’

requirements of section 274(d), a taxpayer shall maintain an

account book, diary, log, statement of expense, trip sheets, or

similar record * * *, and documentary evidence”.    Sec.

1.274-5T(c)(2)(i), Temporary Income Tax Regs., 50 Fed. Reg. 46017

(Nov. 6, 1985).   Generally, corroborative evidence must be direct

evidence, such as a statement in writing or the oral testimony of

witnesses involved in the event in relation to which a deduction

is claimed, or documentary evidence such as described in section

1.274-5T(c)(2), Temporary Income Tax Regs., supra.    Sec.

1.274-5T(c)(3)(i), Temporary Income Tax Regs., 50 Fed. Reg. 46020
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(Nov. 6, 1985).    In proving the business purpose of an

expenditure, the corroborative evidence may be circumstantial.

Id.

      Taking these fundamental principles into account, we turn

our attention to the deductions here in dispute.

Vehicle Expenses

      Petitioners claimed a $6,825 deduction for vehicle expenses

incurred in connection with petitioner’s trade or business.    The

deduction consists of $6,675 computed by applying the standard

mileage rate to the mileage driven plus $150 for miscellaneous

transportation expenses.

      1.   Business Miles

      To support a deduction for business miles driven, the

taxpayer must show by adequate records:    (1) The amount of the

expenditure; (2) the mileage for each business use of the

automobile and the total mileage for all use of the automobile

during the taxable period; (3) the date of the business use; and

(4) the business purpose of the use of the automobile.     See sec.

1.274-5T(b)(6), Temporary Income Tax Regs., 50 Fed. Reg. 46016

(Nov. 6, 1985).    If properly substantiated, transportation

expenses between places of business are deductible, but

transportation to and from work is a nondeductible personal

commuting expense.    See Commissioner v. Flowers, 326 U.S. 465,

469-470 (1946); Sanders v. Commissioner, 439 F.2d 296, 297 (9th
                                - 8 -

Cir. 1971), affg. 52 T.C. 964 (1969); Curphey v. Commissioner, 73

T.C. 766, 777 (1980); Roy v. Commissioner, T.C. Memo. 1997-562,

affd. without published opinion 182 F.3d 927 (9th Cir. 1999);

secs. 1.162-2(e), 1.262-1(b)(5), Income Tax Regs.

     Petitioner maintained and submitted her mileage log showing

the use of her automobile for business purposes during 2006.        The

log shows the beginning and ending location of each trip, the

date of the trip, and the mileage for each trip.     Petitioner’s

log does not show the total mileage for all use of the automobile

during 2006, nor does it state the business purpose of the use of

the automobile as required under section     1.274-5T(b)(6),

Temporary Income Tax Regs., supra.      Nonetheless, petitioner’s

mileage log substantially complies with the “adequate records”

requirement of section 1.274-5T(b)(6), Temporary Income Tax

Regs., supra, and to the extent her log is deficient, she has

provided corroborative evidence sufficient to establish the

required elements.    Accordingly, petitioners are entitled to a

$6,675 vehicle expense deduction attributable to business miles.

     2.    Miscellaneous Transportation Expenses

     According to petitioner, she paid $150 for tolls in driving

between the shops.    The tolls were paid through the use of a

Sunpass.    Petitioners’ bank and/or credit card statements show
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some payments to Sunpass, but petitioner has failed to show that

any of the charges actually relate to business trips.

Petitioners are not entitled to include fees paid to Sunpass in

the deduction for vehicle expenses.

Uniform and Shoe Expense

     The unreimbursed employee business expenses deducted on

petitioners’ return include $1,400 for uniforms and shoes.

     Expenses for uniforms are deductible if the uniforms are of

a type specifically required as a condition of employment, the

uniforms are not adaptable to general use as ordinary clothing,

and the uniforms are not worn as ordinary clothing.     Yeomans v.

Commissioner, 30 T.C. 757, 767-769 (1958); Wasik v. Commissioner,

T.C. Memo. 2007-148; Beckey v. Commissioner, T.C. Memo. 1994-514.

As described by her, while at work petitioner was required to

wear “standard khaki pants”, “regular, standard, red polo

[shirts]”, and “sneakers”.    Petitioner explained that she did not

wear her work clothing other than in connection with her

employment.   Be that as it may, the clothing she described is

adaptable to general use.    Accordingly, petitioners are not

entitled to a uniform and shoe expense deduction.

Cell Phone Expense

     The unreimbursed employee business expense deduction claimed

on petitioners’ return includes $1,300 for cellular phone

service.   Petitioner used her cell phone for both business and
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personal purposes, and the total amount paid, that is, $1,319.81,

includes charges attributable to a cell phone used by her

husband.

     The deduction for the cell phone expense is subject to the

same strict substantiation requirements as the vehicle expense,

as discussed above.   See secs. 274(d), 280F.   Petitioners failed

to allocate payments between the personal and business use of

petitioner’s cell phone as required under section 274(d).      See

Kinney v. Commissioner, T.C. Memo. 2008-287.    Accordingly,

petitioners are not entitled to a cell phone expense deduction.

Office Expense

     The unreimbursed employee business expense deduction claimed

on petitioners’ return includes $1,400 for office expenses.      More

specifically, petitioner testified that these expenses consist of

the costs of supplies, logs, and a $1,200 laptop purchased in

2005 for which she was still making payments.

     Computers and peripheral equipment are “listed property” and

are therefore subject to the strict substantiation requirements.

Sec. 280F(d)(4)(A)(iv).   Petitioners did not provide any

substantiating records in support of this deduction.

     With regard to the portion of the office expense

attributable to the laptop, petitioners failed to satisfy the

strict substantiation requirements of section 274(d) and are

therefore not entitled to a deduction for any expense related to
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the computer.   With regard to the portion of the office expense

attributable to supplies and logs, petitioners did not present

sufficient evidence for the Court to form an estimate, see

Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985), and

therefore petitioners are not entitled to the corresponding

deduction for this expense.

     To reflect the foregoing,


                                      Decision will be entered

                                 under Rule 155.
