                          T.C. Summary Opinion 2016-8



                         UNITED STATES TAX COURT



                    SOFIEN BELTIFA, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 23217-14S.                         Filed February 18, 2016.



      Sofien Beltifa, pro se.

      Gennady Zilberman, for respondent.



                                SUMMARY OPINION


      JACOBS, Judge: This case was heard pursuant to the provisions of section

7463 of the Internal Revenue Code in effect when the petition was 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.
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      Respondent determined a deficiency of $6,139 in income tax and a section

6662(a) accuracy-related penalty of $1,228 for 2011. Petitioner timely filed a

petition for redetermination in this Court. The issues for decision are whether

petitioner is: (1) entitled to a claimed deduction for unreimbursed employee

business expenses of $30,738; (2) entitled to a claimed deduction for medical and

dental expenses of $11,400; (3) entitled to a claimed deduction for charitable

contributions of $7,330; and (4) liable for the section 6662(a) accuracy-related

penalty. Unless otherwise indicated, all section references are to the Internal

Revenue Code (Code) in effect for the year at issue. All Rule references are to the

Tax Court Rules of Practice and Procedure. All dollar amounts are rounded to the

nearest dollar.

                                    Background

      Some of the facts are stipulated and are so found. The stipulated facts and

the accompanying exhibits are incorporated herein by this reference. At the time

he filed his petition, petitioner resided in New York.

      During 2011 petitioner was employed by a restaurant in New York City as a

bartender/bar manager. He received a Form W-2, Wage and Tax Statement, from

his employer for wages, tips, and other compensation totaling $71,072 ($14,120 in
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wages and $56,952 in tips). Petitioner also received a Form 1099-G, Certain

Government Payments, reflecting a State income tax refund of $1,940.

      Petitioner timely filed a Form 1040, U.S. Individual Income Tax Return, for

2011 on which he claimed itemized deductions of $46,884 on Schedule A,

Itemized Deductions. Petitioner’s itemized deductions consisted of: (1) medical

and dental expenses of $11,400, which resulted in a net medical expense

deduction of $5,925 after applying the 7.5% adjusted gross income floor of section

213(a); (2) State and local taxes of $4,352; (3) charitable contributions of $7,330;

and (4) unreimbursed employee business expenses of $30,738, which resulted in a

net miscellaneous itemized deduction of $29,278 after applying the 2% adjusted

gross income floor of section 67(a). Respondent disallowed these deductions

except for the deduction with respect to State and local taxes.

I.    Unreimbursed Employee Business Expenses

      A.     Tips Petitioner Paid to Barbacks

      Petitioner’s duties as a bartender/manager included “calling in” liquor

orders, taking liquor deliveries, and ensuring that the bar was fully stocked.

Assisting petitioner were other employees, referred to as barbacks, who would

help him in transferring, as needed, the liquor from the storage basement to the
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bar. The restaurant had a policy of pooling tips paid by its patrons.1 Petitioner

claimed he gave his barbacks 20% of all the tips he received from the tip pools.

      B.     Clothing Expenses

      The restaurant did not require its employees to wear a uniform, but the

restaurant requested employees to wear an all-black ensemble (black shirt, black

tie, and black pants) while working. Petitioner testified he believed it necessary to

look his best because he was one of the faces of the restaurant. “When you enter,

you just see me and then you walk through. You see the host, you see me. I’ve

got to look presentable.” As a result, petitioner wore high-quality clothes while

tending bar and spent a substantial amount for cleaning the clothes he wore.2 The

clothing petitioner wore for work could be worn outside of work.




      1
        There were two tip pools. One pool was from tips paid by patrons who ate
at the restaurant (restaurant tip pool); the second was from tips paid by patrons
seated at the bar (bar tip pool). The restaurant tip pool was split among the wait
staff, busboys, kitchen staff, bartenders and barbacks. The bar tip pool was split
between the bartenders and the barbacks. In reporting petitioner’s wages and tips
to the Internal Revenue Service, the restaurant reported the tips petitioner received
from both tip pools.
      2
       Petitioner kept a change of clothing at the restaurant for work he performed
when transferring liquor from the storage basement to the bar.
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       C.    Commuting Expenses

       Petitioner often worked late. As a result, when petitioner returned home,

the commuter rail (Metro-North) for which he had a monthly pass generally had

closed for the night. Thus, petitioner asserts he was forced to use taxicabs when

working late. He estimated the cab fare for each nightly ride to be $60 and the

total amount for cab fare in 2011 to be $8,242.

II.    Medical and Dental Expenses

       Petitioner was a patient of the Sircolov brothers, who hailed from Russia.

One brother is a medical doctor; the other is a dentist. Petitioner alleges he

paid for their services in cash; he had no receipts to corroborate this allegation.

III.   Charitable Contributions

       Petitioner maintains he made substantial charitable contributions during

2011, including donations of money, children’s clothing, baby formula, and toys

to a needy neighborhood family. Petitioner provided no documentation regarding

these donations.

                                     Discussion

       Generally, deductions are allowed only as provided by statute. INDOPCO,

Inc. v. Commissioner, 503 U.S. 79, 84 (1992). The Commissioner’s determination

set forth in the notice of deficiency is generally presumed correct, and the taxpayer
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bears the burden of showing that the Commissioner’s determination is in error.

Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).3

I.    Unreimbursed Employee Business Expenses

      A taxpayer may deduct expenses that are ordinary and necessary for his/her

employment, provided the taxpayer was an employee and could not have been

(and was not) reimbursed by his/her employer for such expenses. Rehman v.

Commissioner, T.C. Memo. 2013-71. Section 6001 requires taxpayers to maintain

records sufficient to substantiate any amount claimed.

      Petitioner provided no documentation regarding his entitlement to the

deduction he claimed for unreimbursed employee business expenses. Moreover,

with respect to the deduction petitioner claimed for his clothing expenses, we are

mindful that he was not required by his employer to wear any particular type of

clothing, and the clothing which he did wear was of a kind adaptable generally to

wear away from work as well as at work. Petitioner’s clothing costs were thus

personal expenses and not deductible even though petitioner felt it was necessary

to wear high-quality clothes in order to look his best as one of the faces of the


      3
       In certain circumstances the burden of proof with respect to factual matters
may shift to the Commissioner. Sec. 7491(a). Petitioner did not argue that sec.
7491(a) applies herein, nor did he show that he met its requirements for shifting
the burden of proof. Consequently, the burden of proof remains with petitioner.
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restaurant. See Donnelly v. Commissioner, 28 T.C. 1278, 1280 (1957), aff’d, 262

F.2d 411 (2d Cir. 1959).

       For the aforesaid reasons, we sustain respondent’s determination with

respect to petitioner’s claimed deduction for unreimbursed employee business

expenses.

II.    Medical and Dental Expenses

       Section 213(a) allows a deduction for medical care not compensated for by

insurance or otherwise. The amount of the deduction for medical care is limited to

the excess over 7.5% of the amount of the taxpayer’s adjusted gross income.

       Petitioner provided no documentary evidence regarding his claimed

deduction for medical and dental expenses. Because petitioner failed to meet his

burden to show error in respondent’s determination, we sustain respondent’s

disallowance of petitioner’s claimed deduction for medical and dental expenses.

III.   Charitable Contributions

       In general, section 170(a) allows a deduction for charitable contributions,

but charitable contributions are deductible only if verified as set forth in

regulations prescribed by the Secretary. Sec. 170(a)(1); Hewitt v. Commissioner,

109 T.C. 258, 261 (1997), aff’d without published opinion, 166 F.3d 332 (4th Cir.

1998). Section 170(f)(17) also provides that no deduction shall be allowed for any
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contribution in cash or by check unless the donor maintains bank records or a

written communication from the donee showing the name of the donee

organization and the date and amount of the contribution. Section 1.170A-13(a),

Income Tax Regs., provides that if a taxpayer makes a charitable contribution in

cash or by check, he/she must maintain for each contribution one of the following:

(i) canceled check; (ii) receipt from the donee; or (iii) other reliable written

records showing the name of the donee, the date of the contribution, and the

amount of the contribution. For a charitable contribution of $250 or more, the

taxpayer must obtain a contemporaneous written acknowledgment from the donee

that includes the amount of any cash contribution and a description (but not value)

of any property other than cash contributed and states whether any goods or

services were provided in exchange for the property contributed. Sec. 170(f)(8).

      Petitioner provided no documentation to substantiate his charitable giving in

2011. Because petitioner bears the burden of proof in this matter, we sustain

respondent’s disallowance of petitioner’s claimed charitable contribution

deduction.

IV.   Accuracy-Related Penalty

      Respondent argues that petitioner is liable for an accuracy-related penalty

pursuant to section 6662(a) and (b)(1), which provides for a 20% penalty for an
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underpayment of tax attributable to negligence or disregard of rules or regulations.

Negligence as used in section 6662(b)(1) is defined as any failure to make a

reasonable attempt to comply with the Code and any failure to keep adequate

books and records or to substantiate items properly. Sec. 6662(c); sec. 1.6662-

3(b)(1), Income Tax Regs. Negligence has also been defined as the failure to

exercise due care or the failure to do what a reasonable person would do under the

circumstances. See Allen v. Commissioner, 92 T.C. 1, 12 (1989), aff’d, 925 F.2d

348, 353 (9th Cir. 1991); Neely v. Commissioner, 85 T.C. 934, 947 (1985).

“Disregard” includes any careless, reckless, or intentional disregard. Sec. 6662(c).

      The Commissioner has the burden of production with respect to the

accuracy-related penalty. Sec. 7491(c). To meet this burden, the Commissioner

must produce sufficient evidence indicating that it is appropriate to impose the

penalty. See Higbee v. Commissioner, 116 T.C. 438, 446 (2001). Upon the

Commissioner’s meeting his burden, the taxpayer must come forward with

evidence sufficient to persuade the Court that the Commissioner’s determination is

incorrect. Rule 142(a); see Higbee v. Commissioner, 116 T.C. at 447. The

taxpayer may meet his/her burden by proving that he/she acted with reasonable

cause and in good faith with respect to the underpayment. See sec. 6664(c)(1); see
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also Higbee v. Commissioner, 116 T.C. at 447; sec. 1.6664-4(b)(1), Income Tax

Regs.

        Respondent satisfied his burden of production with respect to negligence.

Petitioner failed to maintain records with respect to his claimed deductions as

required by section 6001 and failed to provide documentation to support his

position. Petitioner has not demonstrated reasonable cause for his underpayment

of tax. Consequently, we hold that petitioner is liable for the section 6662(a)

accuracy-related penalty for 2011.

        To reflect the foregoing,


                                                 Decision will be entered

                                       for respondent.
