                               T.C. Memo. 2019-57



                         UNITED STATES TAX COURT



                   ROBERT A. OLIVERI, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 6792-15.                          Filed May 28, 2019.



      Nancy Ortmeyer Kuhn, for petitioner.

      Jeffrey E. Gold and Scott A. Hovey, for respondent.



            MEMORANDUM FINDINGS OF FACT AND OPINION


      COLVIN, Judge: Respondent determined that petitioner has a deficiency of

$16,548 in his 2012 Federal income tax and is liable for an addition to tax of
                                         -2-

[*2] $2,010 under section 6651(a)(1)1 for failure to timely file a return and an

accuracy-related penalty of $5,011 under section 6662(a). After concessions,2 the

issues for decision are:

       1. Whether petitioner may deduct as charitable contributions for 2012

$39,979 that remains in dispute after respondent’s concessions. We hold that he

may to the extent stated below.

       2. Whether, for taxable year 2012, petitioner is liable for an addition to tax

under section 6651(a)(1) for failure to timely file an income tax return. We hold

that he is.

       3. Whether, for taxable year 2012, petitioner is liable for a penalty under

section 6662(a). We hold that he is not.3




       1
       Unless otherwise indicated, section references are to the Internal Revenue
Code in effect at all relevant times. Rule references are to the Tax Court Rules of
Practice and Procedure. We round some monetary amounts to the nearest dollar.
Petitioner resided in Maryland when the petition was filed.
       2
       Respondent determined that petitioner overstated his itemized deductions
for 2012 by $62,407. After respondent’s concessions, $39,979 remains in dispute.
       3
       This case was tried before another Judge who is no longer serving with this
Court. The parties consented to having the case decided by Judge John O. Colvin
on the basis of the record of trial.
                                         -3-

[*3]                            FINDINGS OF FACT

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

A.     Petitioner and His Evangelism Activities

       Petitioner graduated from the U.S. Naval Academy in 1959 and served in

the U.S. Air Force for more than 26 years. From 1959 to 1980 he logged more

than 3,000 flight hours. He became very active in the Catholic Church after he

retired from the U.S. Air Force in 1986. He frequently attended church-related

meetings, participated in community-outreach efforts, and assisted various church

officials. In 1987 petitioner was certified as a teacher and trainer for the Catholic

Church following his completion of a 16-week Catholic evangelization trainer’s

program offered by Franciscan University of Steubenville, a Catholic university in

Steubenville, Ohio.

       Since 1987 petitioner has dedicated his life to being an evangelist.

Petitioner seeks to spread the teachings of the Catholic Church through random

interactions with members of the general public. He considers all of his contact

with members of the public to be opportunities for evangelism. He wears a large

and visible crucifix at all times which identifies his religious affiliation and

commitment to evangelism. Petitioner evangelizes people he happens to see when

he engages in otherwise personal activities, such as when he eats in restaurants,
                                        -4-

[*4] travels, and pilots private planes. He usually does not know in advance

whom he will evangelize. Petitioner evangelizes and discusses his faith with

friends, members of his extended family, and members of the religious

organization that he founded, see infra, and the Catholic Church.

      Petitioner visited some persons in hospitals and nursing homes and one

prisoner during 2012 to offer spiritual and financial support. He did not keep a

record of the visits. He did not deduct any expenses relating to his visits to

hospitals or nursing homes during 2012, except for mileage.

B.    The Brothers and Sisters of the Divine Mercy

      In 1987 petitioner cofounded the Brothers and Sisters of the Divine Mercy

(BSDM). BSDM was incorporated in Maryland in 2003.

      BSDM’s corporate charter states in part as follows: “The Corporation will

provide religious and spiritual counseling to people of need, including prison

inmates and hospital patients, and provide guidance to people counseled after

release from prison or from the hospital.” According to its mission statement,

BSDM is responsible to the Pontifical Council of the Laity, a dicastery of the

Catholic Church. Nothing in the record shows that the Catholic Church

recognized or had any formal relationship to BSDM.
                                        -5-

[*5] During 2012 petitioner was president and brother superior of BSDM and

was one of its three directors. BSDM also had an acting vice president and an

acting treasurer. BSDM had 13 members in addition to petitioner during 2012:

11 in the United States and 2 in Paraguay. BSDM had no office outside

petitioner’s home.

C.    Connection of the Catholic Church and BSDM to Petitioner’s Evangelism
      Activities

      Petitioner did not seek or obtain approval in advance from the Catholic

Church regarding any aspect of his evangelism activities, and he was not required

to report afterwards to the Catholic Church about those activities.

      Petitioner met with other members of BSDM a number of times not

specified in the record during 2012. At those meetings they discussed each other’s

evangelization activities. BSDM did not select or approve the methods petitioner

used to evangelize, who he evangelized, or the expenses he incurred while

evangelizing. Neither the Catholic Church nor BSDM provided petitioner with

contemporaneous written acknowledgments for any of his expenses for 2012.

D.    Petitioner’s Charitable Contribution Deductions

      Petitioner deducted as charitable contributions the unreimbursed expenses

which he contends he incurred in connection with evangelism. Petitioner divided
                                        -6-

[*6] these expenses into 13 categories and gave each category a caption (e.g., the

caption for the category comprising most of his airplane rental and training

expenses is “Evangelization: Christian Outreach”). Respondent does not agree

that petitioner’s captions for the 13 categories correctly characterize the expenses.

We have added a caption for each category based on the goods or services

petitioner purchased (e.g., what petitioner characterized as “Evangelization--

Christian Outreach” we call “Airplane Rental and Training”). For the convenience

of the parties, we also have retained petitioner’s 13 captions in parentheses, but

our retention of petitioner’s captions does not bear on whether the expenses within

each category are deductible. We also changed the order of the 13 groups to better

fit into three broader categories (transportation, airplane, and meals expenses;

payments to or for individuals; and communications and administrative expenses).

Petitioner’s expenses are as follows.

      1.     Transportation, Airplane, and Meals Expenses

             a.    Airplane Rental and Training (“Evangelization: Christian
                   Outreach”--Petitioner’s Group No. 6)

      Petitioner deducted $15,082 for expenses that he characterized as

“Evangelization: Christian Outreach”. These expenses were incurred in

connection with petitioner’s rental of private airplanes both for travel purposes
                                         -7-

[*7] and for pilot training undertaken by petitioner to meet licensing and safety

requirements.

      Petitioner enjoys flying. He kept a flight log for 2012 showing the

departure and arrival airports for each of his flights, the number of times he landed

his plane during each rental period, and the purpose of each rental.

                                                                       Number of
        Date                   Purpose             Amount paid          landings
         1/7                  Training                 $401                 2
        1/19                  Training                   200                2
        1/31                  Training                   512                2
         2/2                  Training                   267                2
         2/3                  Purchase                    25                n/a
         2/7                  Training                   374                2
        2/13                  Purchase                     6                n/a
        2/14                  Training                   174                5
        2/20                  Training                   731                3
        2/22                  Training                   145                3
         3/1                  Training                   343                3
         3/1                  Purchase                    58                n/a
         3/8              Course purchase                370                n/a
         3/22                 Training                   147                5
        3/27                  Training                   668                2
         4/5                  Training                   210                1
                          -8-

[*8]   4/16    Purchase          17           n/a
       4/19    Training         200           7
       4/30    Training          86           3
        5/31   Training         228           2
        5/3    Training         129           2
       5/10    Training         172           2
       5/11    Training         172           2
       5/12    Training         227           2
       5/17    Training         621           2
       5/17    Purchase         162           n/a
       5/21    Purchase          58           n/a
       5/25    Training         227           5
       5/27    Training         113           3
       5/28    Training         227           4
       6/8     Training         272           4
       6/14    Training         373           5
       6/17    Training         678           2
       6/21    Training         385           5
       6/27    Training                (2 )   4
       6/28    Training                (2 )   2
       7/16    Training         329           5
       7/30    Training          ---          1
       7/30    Purchase          41           n/a
       8/9     Training         350           5
                                          -9-

 [*9]       8/14               Training                  461                6
            9/20               Training                  274                1
            9/26               Training                  465                5
            10/10              Training                  ---                5
            10/11              Training                  358               10
            11/14              Training                  243                3
            12/3               Training                  260               12
            12/3               Purchase                   33               n/a
            12/18              Training                  346                1

        1
         On May 3, 2012, petitioner flew twice, from two different airports, for
training purposes.
       2
         Petitioner deducted the cost of this rental as a temporary assignment. See
infra p. 13.

        Petitioner randomly evangelized people with whom he came into contact

when he was engaged in training flights, such as airport staff and his pilot training

instructors.

        Petitioner rented planes three times in 2012 for nontraining purposes. On

July 23, 2012, petitioner rented a plane to provide an “area tour for Amelia.”

Amelia is not identified in the record. Petitioner deducted $126 for this trip. On

July 28, 2012, petitioner rented a plane and flew Monsignor Rossi, Rector at the

Basilica of the National Shrine of the Immaculate Conception (Basilica) in

Washington, D.C., to New Jersey to officiate at the funeral of the Monsignor’s
                                        - 10 -

[*10] cousin. Petitioner deducted $1,432 for this trip, but he did not provide a

contemporaneous written acknowledgment of this contribution from the Catholic

Church or BSDM. On August 20, 2012, petitioner flew Victor Polizzi, a member

of his Biblical theology class, to Ocean City for lunch. Petitioner deducted $605

for this trip.

                 b.   Other Flying-Related Expenses (“Evangelization: Christian
                      Outreach Support”--Petitioner’s Group No. 9)

       Petitioner deducted $3,299 for expenses he characterized as

“Evangelization: Christian Outreach Support”, which comprises the expenses of

his private airplane rentals that were not included above, airplane equipment costs,

and expenses incurred for meals, lodging, train tickets, clothes, and parking.

Petitioner purchased a jacket for the son of a BSDM member and paid to rent a

plane to fly his car mechanic, Wayne Lopez, to Ocean City, Maryland.

                 c.   Automobile Expenses (“Pastoral Ministry: Transportation”--
                      Petitioner’s Group No. 1)

       Petitioner deducted $1,292 for expenses that he characterized as “Pastoral

Ministry: Transportation”. Petitioner owned two vehicles in 2012: a 1992

Toyota Camry and a 2009 Toyota Venza.

       These expenses comprise automobile traveling expenses of $983.36 for

automobile mileage to and from airports, and $309 for highway tolls, parking
                                       - 11 -

[*11] expense at Baltimore-Washington International Airport, and a car wash.

The $309 amount includes all of the highway tolls, parking, and car washing

expenses petitioner paid during 2012. During 2012 petitioner drove the Camry

4,175 miles and the Venza 18,811 miles. In computing the amount of his

deduction petitioner computed the deduction for mileage using a rate of 14 cents

per mile.4

      Petitioner did not maintain a contemporaneous mileage log showing the

purpose of any of his automobile travel. However, he maintained records showing

that during 2012 he made 38 round trips of 33 miles one way from his home to the

Basilica. On each of these trips he read at Catholic masses or was a Eucharistic

minister.5 Petitioner also drove Monsignor Rossi 236 miles round trip from

Annapolis, Maryland, to Ocean City, Maryland, to view a property that had been

donated to the Basilica.6


      4
        The standard mileage rate is 14 cents for purposes of computing the sec.
170(a) deduction for mileage in connection with a charitable contribution. See
sec. 170(i); Rev. Proc. 2010-51, sec. 5.01, 2010-51 I.R.B. 883, 885; Notice 2012-
1, sec. 2, 2012-2 I.R.B. 260, 260.
      5
      We take judicial notice that the distance from petitioner’s home in
Maryland to the Basilica is 33 miles (one way). See Fed. R. Evid. 201(b).
      6
       At trial before another Judge, the Court reserved ruling on the admission of
Exhibit 25-P, which consists of a series of email messages petitioner sent in 2012.
                                                                       (continued...)
                                         - 12 -

[*12]         d.     Meals, Coffee, and Snacks (“Evangelization: Counseling”--
                     Petitioner’s Group No. 10)

        Petitioner deducted $5,228 for expenses that he characterized as

“Evangelization: Counseling”. These expenses comprise petitioner’s payments

for every restaurant meal he ate in 2012, including meals he ate with members of

his extended family, and also the costs of snacks and coffee when he met with

several individuals, including BSDM members. Petitioner provided meals and

coffee for others while he was providing spiritual counseling and discussing his

faith and evangelism.

        On some, but not all, of his restaurant and coffee receipts petitioner wrote

the name or names of the person or persons with whom he had the meal or coffee.

Petitioner testified that he tried to “talk [to them] and find out what’s going on” in

their lives. Petitioner testified that he paid for snacks when meeting with BSDM

members to discuss what they were doing in their ministry. Petitioner often left

large tips because he wanted servers to “think * * * that God cares for them and

they’re very special.” The record contains five receipts on which petitioner wrote


        6
        (...continued)
Those messages include communications with Monsignor Rossi regarding the
drive to Ocean City. There being no remaining objection, we now admit Exhibit
25-P into evidence. We also take judicial notice that the distance from Annapolis,
Maryland, to Ocean City, Maryland is 118 miles. See Fed. R. Evid. 201(b).
                                        - 13 -

[*13] the name of the server as the only person with whom petitioner had contact

at a meal.

             e.     Travel Expenses (“Evangelization: Temporary Assignments”--
                    Petitioner’s Group No. 13)

      Petitioner deducted $7,151 for expenses of six trips that he characterized as

“Evangelization: Temporary Assignments”. These trips were to Colorado;

Florida; Aberdeen, Maryland; New York; Texas; and North Carolina. His

expenses include the costs of commercial airline tickets, private airplane rentals,

car rentals, lodging, and meals.

      Petitioner went to Colorado to learn to fly in a mountainous area. He went

to Texas to attend his daughter-in-law’s family reunion and to New York to visit

his sister-in-law. During his New York trip he paid for and deducted as a

charitable contribution a birthday lunch for his sister-in-law. Petitioner went to

Florida to visit and counsel Marla Benkovich. The record includes no specific

information about the purposes of his trips to Aberdeen, Maryland, or North

Carolina except for his general statement that everything he did related to

evangelization. Neither the Catholic Church nor BSDM instructed petitioner to

take any of these trips.
                                       - 14 -

[*14] 2.     Payments to or for Individuals

             a.    Gifts and Payments to Others (“Evangelization: Charitable
                   Grants”--Petitioner’s Group No. 11)

      Petitioner deducted $7,910 for expenses that he characterized as

“Evangelization: Charitable Grants”, which comprise his payments for clothes,

groceries, lodging, traveling, and other miscellaneous gifts for other people.

      Petitioner paid $1,000 to Marla Benkovich for the cost of her lodging and

telephone service during her stay in Maryland. He also paid for her meals and

groceries during that trip, gave her a money order for $30, paid $114.75 to Sam’s

Club and $169 for contact lenses for her, and paid for a gift for her daughter

Marta. Petitioner paid travel expenses for and gave $1,485 in cash to Sister Lila

Nunez, a BSDM member from Paraguay, for a trip to Washington, D.C., to attend

the celebration of BSDM’s 25th anniversary.

      Petitioner gave a $500 gift card from Bass Pro Shops to Tom Eveler, a

retired police officer. He paid $700 for sailing school fees for Anne-Marie Kasuda

and paid $24 for movie tickets.
                                         - 15 -

[*15]         b.     Maintenance Expenses for St. Mary’s Church and the Home of
                     a BSDM Member (“Evangelization: Mission Support”--
                     Petitioner’s Group No. 12)

        Petitioner spent $1,335 for items which he characterized as “Evangelization:

Mission Support”. This category includes petitioner’s purchases of home

maintenance items for Sister Kathleen Sheldon, a BSDM member. Petitioner did

not get a contemporaneous written acknowledgment of these expenses from the

Catholic Church or BSDM.

        This category also includes $224 for maintenance at St. Mary’s Catholic

Church in Annapolis, Maryland, which respondent concedes petitioner may

deduct.

              c.     Printed Material and Gifts (“Pastoral Ministry: Audio Visual
                     Media”--Petitioner’s Group No. 4)

        Petitioner deducted $2,587 for the cost of printed material and gifts for

persons he evangelized. He characterized these expenses as “Pastoral Ministry:

Audio Visual Media”. This included the costs of Christmas ornaments and

religious books and videos which he gave to people he evangelized. He did not

have the approval of BSDM or the Catholic Church before making these gifts.

        Petitioner paid $1,056 for 1,000 copies of a Spanish language religious

pamphlet which he gave to Sister Lila Nunez to distribute in Paraguay. He paid
                                             - 16 -

[*16] $112 for a subscription to a local newspaper, $25 to RBC Ministries,7 and $6

to a jewelry store to repair his crucifix.

      3.     Communications and Administrative Expenses

             a.     Insurance and Legal Expenses (“Pastoral Ministry:
                    Professional Expenses”--Petitioner’s Group No. 2)

       Petitioner deducted an amount for expenses that he characterized as

“Pastoral Ministry: Professional Expenses”, which comprise: $297 for an

umbrella insurance policy covering petitioner and his then wife from personal

liabilities, $1,615 for legal fees incurred in connection with an audit of his

personal income tax return, and $284 paid to CT Corp. for serving as BSDM’s

registered agent for receipt of legal documents in Maryland.

             b.     Office Supplies and Refreshments (“Pastoral Ministry: Office
                    Expenses”--Petitioner’s Group No. 3)

      Petitioner deducted $1,378 for expenses that he characterized as “Pastoral

Ministry: Office Expenses”. These expenses include the costs of office supplies

such as paper, books, pens, and computer equipment, which were almost all used

in petitioner’s home. Petitioner did not report or account for his office expenses to

either the Catholic Church or BSDM. This category also includes food items,


      7
       The receipt from RBC Ministries states that this payment was a donation.
Petitioner provided no evidence regarding the purpose of this payment.
                                        - 17 -

[*17] such as cookies and pies, that petitioner served at Biblical theology classes

held in the home of a member of BSDM.

             c.     Shipping (“Pastoral Ministry: Shipping”--Petitioner’s Group
                    No. 5)

      Petitioner deducted $200 for payments to Fed Ex and UPS that he

characterized as “Pastoral Ministry: Shipping”. Some of the expenses were paid

to ship items to his sister-in-law, his doctor, and a person assisting with the

administration of the estate of Cathy Milligan, a deceased sister of BSDM.

             d.     Communications (“Evangelization: Communications”--
                    Petitioner’s Group No. 7)

      Petitioner deducted $3,567 for expenses that he characterized as

“Evangelization: Communications”. This amount comprises the costs of

petitioner’s home telephone, a separate line for a fax machine, and a cell phone.

Petitioner had no other telephones or telecommunication devices for his personal

use during 2012. Petitioner used the three lines for some personal calls and faxes,

such as to speak with his doctor, family members, and friends, and to his lawyers

regarding the audit of his personal income tax return. Petitioner did not keep a

record of his personal use of the telephone lines.
                                         - 18 -

[*18]         e.     Internet and Cable Service in Petitioner’s Home
                     (“Evangelization: Evangelization Support”--Petitioner’s Group
                     No. 8)

        Petitioner deducted $730 for internet and cable television service in his

home, which he characterized as “Evangelization: Evangelization Support”.

Petitioner used the internet to send emails to those to whom he ministered, send

weekly emails containing religious thoughts and news to BSDM’s mailing list,

check the weather, shop online, and watch religious videos. Petitioner used the

cable televison service to obtain weather information for flying and to view

religious programs. Petitioner had no separate internet or cable service for his

personal use during the year at issue.

E.      Petitioner’s 2012 Federal Income Tax Return

        Petitioner’s 2012 Form 1040, U.S. Individual Income Tax Return, was

originally due on April 15, 2013. Petitioner timely filed a Form 4868, Application

for Automatic Extension of Time to File U.S. Individual Income Tax Return,

which extended the due date for filing his 2012 return to October 15, 2013.

Petitioner filed his Form 1040 for 2012 on August 16, 2014, which was 10 months

after the extended due date. On that return he reported tax liability of $7,074.

        On Schedule A, Itemized Deductions, attached to that return, he deducted

charitable contributions as follows: $3,240 in cash contributions, $90 in
                                         - 19 -

[*19] contributions other than cash, and $62,407 on line 18, the line for

carryforward contributions from 2011. The parties agree that petitioner did not

have a carryover contribution from 2011 and that the amount he reported on

Schedule A, line 18, represents the unreimbursed expenses that are at issue here.

Petitioner reduced the $62,407 to $44,189 because of the limits on the deduction

of charitable contributions under section 170(f).8

                                       OPINION

      Petitioner contends that he is entitled to deduct $39,979 in charitable

contributions under section 170 in excess of the amount respondent allowed.

Petitioner also contends that he is not liable for the addition to tax for failure to

timely file his 2012 tax return under section 6651(a)(1) or the accuracy-related

penalty under section 6662(a). We will first decide whether or to what extent his

unreimbursed expenses for evangelization are deductible as charitable

contributions.




      8
       Respondent’s previous audits of petitioner’s tax returns for 2008 and 2010
resulted in this Court’s entering stipulated decisions reflecting deficiencies. See
Oliveri v. Commissioner, T.C. Dkt. No. 14773-08S (Apr. 27, 2009); Oliveri v.
Commissioner, T.C. Dkt. No. 3494-11S (Oct. 13, 2011).
                                        - 20 -

[*20] A.     Charitable Contribution Deductions

      Section 170(a) permits the deduction of “any charitable contribution” made

by a taxpayer for contributions or gifts “to or for the use of” a charitable

organization. Sec. 170(c). Amounts paid to a charity for the benefit of a specified

individual are generally not deductible as charitable contributions, regardless of

the circumstances of the recipient or the intent of the donor. Tripp v.

Commissioner, 337 F.2d 432 (7th Cir. 1964), aff’g T.C. Memo. 1963-244;

Thomason v. Commissioner, 2 T.C 441, 443-444 (1943). In contrast, an

unreimbursed expenditure incident to the rendition of services to a qualified

charitable organization may be deductible under section 170. Sec. 1.170A-1(g),

Income Tax Regs. Such expenditures include, for example, “transportation

expenses necessarily incurred in performing donated services”. Id. In order to be

deductible an unreimbursed expense must be directly connected with and solely

attributable to a service provided to an organization to which contributions are

deductible. See sec. 1.170A-1(g), Income Tax Regs.; see also Van Dusen v.

Commissioner, 136 T.C. 515, 525 (2011); Saltzman v. Commissioner, 54 T.C.

722, 724 (1970).
                                       - 21 -

[*21] B.     Whether or to What Extent Petitioner May Deduct Expenses He
             Incurred in 2012 Which He Contends Were Related to Evangelization

      Petitioner contends that he may deduct all of the disputed amount of his

expenses, which he claims were incurred in connection with his evangelism.

Specifically, he contends that: (1) his expenses were in no part personal, (2) his

expenses were incident to his rendition of services to BSDM or the Catholic

Church, (3) the contemporaneous written acknowledgment requirement, section

170(f)(8) and section 1.170A-13, Income Tax Regs., does not apply to

unreimbursed expenses, and (4) respondent’s disallowance of his charitable

contribution deductions violates the First Amendment to the Constitution.

Respondent concedes that BSDM is tax exempt under section 501(c)(3) and that

petitioner provided receipts or other records which adequately substantiate the

amounts of his reported expenses. Respondent contends that (1) most of

petitioner’s expenses were at least in part personal; (2) petitioner’s unreimbursed

expenses were not contributions “to or for the use of” either BSDM or the Catholic

Church because of the absence of coordination or supervision as described in Van

Dusen v. Commissioner, 136 T.C. at 523, 525, and Smith v. Commissioner, 60

T.C. 988 (1973); (3) petitioner’s expenses of $250 or above are not deductible

because petitioner did not receive a contemporaneous written acknowledgment
                                        - 22 -

[*22] from the Catholic Church or BSDM for the expense; and (4) respondent’s

conduct of this case has not violated petitioner’s constitutional rights.

      1.     Personal Expenses

      A contribution is not deductible if the primary purpose is to obtain a

personal benefit for the taxpayer. Babilonia v. Commissioner, 681 F.2d 678, 679

(9th Cir. 1982), aff’g T.C. Memo. 1980-207; Allen v. United States, 541 F.2d 786,

788 (9th Cir. 1976); Tate v. Commissioner, 59 T.C. 543, 550 (1973); Seed v.

Commissioner, 57 T.C. 265, 275-276 (1971). Expenses which are incurred

incident to rendering services to a charitable organization are considered to have a

dual character if they benefit both the charity and the taxpayer. See, e.g.,

Churukian v. Commissioner, T.C. Memo. 1980-205. For the expense to be

deductible, the charity, rather than the taxpayer, must receive the primary benefit

of the expenditure. Babilonia v. Commissioner, 681 F.2d at 679. When a claimed

charitable contribution deduction arises from an expense that is in part personal

and in part charitable, the burden of proof is on the taxpayer to show that the

expense is attributable to the charitable use. Orr v. United States, 343 F.2d 553,

557-558 (5th Cir. 1965). Failure to prove that an expense would not have been

incurred absent the charitable use bars a taxpayer’s claim for a charitable

contribution deduction. Id. at 558.
                                         - 23 -

[*23] Costs of traveling away from home (including transportation, meals, and

lodging) are not deductible unless they qualify as expenses deductible, as relevant

here, under section 170 and regulations thereunder. Sec. 1.262-1(b)(5), Income

Tax Regs. A charitable deduction for unreimbursed travel expenses is denied

where the taxpayer derives substantive personal pleasure while on trips. Saltzman

v. Commissioner, 54 T.C. at 725. For purposes of rendering donated services,

“while away from home” has the same meaning as in section 162(a)(2). Sec.

1.170A-1(g), Income Tax Regs. If the purpose of a trip is primarily personal, the

travel expenses are not deductible even though the taxpayer performs charitable

services while at the destination. See sec. 1.162-2(b), Income Tax Regs. Meals

and other travel expenses are not deductible where there is a substantial direct

personal benefit to the taxpayer. See Seed v. Commissioner, 57 T.C. at 275-276;

Sheffels v. United States, 264 F. Supp. 85 (E.D. Wash. 1967), aff’d, 405 F.2d 924

(9th Cir. 1969); see also sec. 1.170A-1(g), Income Tax Regs.

      Petitioner treated the expenses of a wide range of things he did, such as his

flying lessons, all of his restaurant meals in 2012, travel to visit his family

members, and home internet and telephone service, as expenses of evangelism.

Most of petitioner’s expenses were incurred in whole or in part for personal

purposes and therefore do not qualify for deduction under section 170.
                                        - 24 -

[*24] 2.     Whether Expenses Were Incurred in Coordination With or Supervised
             by a Charitable Organization

      To be deductible under section 170, a contribution must be “to or for the use

of” a charitable organization. In order to meet this requirement, the expense must

be subject to coordination, supervision, or oversight by the organization. Van

Dusen v. Commissioner, 136 T.C. at 523-524.

      Courts have applied several factors in deciding whether a taxpayer provided

services “to or for the use of” an organization, including: (1) “the strength of the

taxpayer’s affiliation with the organization”, (2) “the organization’s ability to

initiate or request services from the taxpayer”, (3) “the organization’s supervision

over the taxpayer’s work”, and (4) “the taxpayer’s accountability to the

organization”. Id. at 523; see Smith v. Commissioner, 60 T.C. 988. The charity

must direct or encourage the taxpayer to perform the charitable services. Saltzman

v. Commissioner, 54 T.C. at 723-724. We consider these factors and any other

relevant circumstances in deciding whether to view the taxpayer’s unreimbursed

expenses as sufficiently coordinated by, or the taxpayer is sufficiently accountable

to, the charitable organization for the contribution to be considered to be “to or for

the use of” the organization. Van Dusen v. Commissioner, 136 T.C. at 523-524.

We refer to this as the “coordination” factor.
                                       - 25 -

[*25] Petitioner contends that because the taxpayers’ unreimbursed expenses for

evangelical activities were deductible in Smith v. Commissioner, 60 T.C. 988, and

Orr v. United States, 343 F.2d 553, his unreimbursed expenses also are deductible.

We disagree. The facts in those cases contrast sharply with the facts here. In

Smith v. Commissioner, 60 T.C. at 989, Mr. Smith was a member of a local church

organization (an “assembly”) which had well-established procedures for

coordinating the evangelical activities of certain of its members. Mr. Smith took

trips to Newfoundland, Canada, with his wife and children and several young men

who joined them in Newfoundland. Id. at 991. Mr. Smith selected that

geographic area because he believed that the large number of low-income people

living there would respond to his preaching. Id. at 990. His wife assisted with

cooking and other arrangements for the group.

      According to its usual practice, Mr. Smith’s assembly provided him with

letters of introduction (“commendation”) directed to religious groups along his

route in Maine, Vermont, and Nova Scotia, Canada, written by one member of his

assembly and countersigned by another member. Because no assembly existed in

the area Mr. Smith’s group would be visiting, according to its usual practice his

assembly addressed the letter of commendation to “those gathered to the name of

the Lord Jesus Christ”. Id.
                                        - 26 -

[*26] In Newfoundland Mr. Smith and his volunteers often held three meetings

per day, each attended by 10 to 150 people. After he returned home Mr. Smith

reported back to his assembly, which publicized his efforts and accomplishments

to other assemblies affiliated with his assembly. Id. at 991.

      We held that the travel expenses Mr. Smith incurred on these trips were

deductible. Id. at 992-995. Mr. Smith’s evangelistic activities were sufficiently

coordinated with his assembly, and his evangelism was “not merely * * * [his]

‘own personal religious enterprise’ but was an undertaking which was approved,

encouraged, and aided by his local church.” Id. at 994. We held that Mr. Smith’s

trips were taken on behalf of his assembly and that, for purposes of section 170, he

rendered services “to or for the use of ” his assembly. See id. at 993.

      In contrast to Mr. Smith’s evangelism activities, petitioner’s were mostly

random and uncoordinated by either the Catholic Church or BSDM. Mr. Smith

incurred expenses in order to evangelize; in contrast, petitioner evangelized during

the course of his usual personal activities. Petitioner did not sufficiently

coordinate his expenses with either BSDM or the Catholic Church for expenses to

be considered to be “to or for the use of” either of those organizations.
                                       - 27 -

[*27] 3.     Substantiation

      A taxpayer must substantiate the amounts of unreimbursed expenses

incurred while rendering services to a charity in order for the expenses to be

deductible. Charitable contribution deductions are subject to the recordkeeping

requirements of section 1.170A-13(a), Income Tax Regs., for contributions of

money or section 1.170A-13(b), Income Tax Regs., for contributions of nonmoney

property. Charitable contributions of unreimbursed out-of-pocket expenses of less

than $250 are governed by section 1.170A-13(a), Income Tax Regs. Van Dusen v.

Commissioner, 136 T.C. at 531. No deduction is allowed under section 170(a) for

a contribution of $250 or more unless the taxpayer substantiates the contribution

with a contemporaneous written acknowledgment from the donee organization.9

Sec. 170(f)(8)(A); Van Dusen v. Commissioner, 136 T.C. at 536. A taxpayer who

incurs unreimbursed expenditures incident to the rendition of services is treated as


      9
       This requirement does not apply “if the donee organization files a return,
on such form and in accordance with such regulations as the Secretary may
prescribe, which includes the information” required to be included in a
contemporaneous written acknowledgment. Sec. 170(f)(8)(D). Sec. 170(f)(8)(D)
was repealed effective for contributions made in tax years beginning after
December 31, 2016. See Tax Cuts and Jobs Act of 2017, Pub. L. No. 115-97, sec.
13705(a), 131 Stat. at 2169. Petitioner has not argued, and the record contains no
evidence, that BSDM or the Catholic Church filed a return that included the
information required by sec. 170(f)(8)(B) such that this substantiation requirement
would not apply.
                                        - 28 -

[*28] having obtained a contemporaneous written acknowledgment of those

expenditures if the taxpayer (1) has adequate records to substantiate the amounts

of the expenditures; and (2) obtains (a) a statement prepared by the donee

organization containing a description of the services provided by the taxpayer,

(b) a statement of whether the donee organization provides any goods or services

in consideration, in whole or in part, for the unreimbursed expenditures, and (c) a

description and good faith estimate of the value of those goods or services, and if

the donee organization provides any intangible religious benefits, a statement to

that effect. Sec. 1.170A-13(f)(10), Income Tax Regs. Because petitioner did not

obtain any contemporaneous written acknowledgments, his expenses of $250 or

more are not deductible.

      Petitioner points out that the contemporaneous written acknowledgment

requirement of section 170(f)(8) applies to “contributions” and contends that it

does not apply to unreimbursed expenses because the statute provides that

acknowledgments are required for “contributions” over $250, not for “‘out-of-

pocket’ expenditures.” We disagree with that contention because an

unreimbursed, “out-of-pocket” expense made incident to the rendition of services

to an organization is deductible only if it is a “contribution”, and the deductibility
                                        - 29 -

[*29] of charitable contributions is subject to the substantiation requirements of

section 170(f)(8). Sec. 1.170A-1(g), Income Tax Regs.

      Petitioner contends that the reporting provisions of section 1.170A-13,

Income Tax Regs., require only substantial compliance. The substantial

compliance doctrine applies to unreimbursed volunteer expenses of less than $250,

Van Dusen v. Commissioner, 136 T.C. at 534-535, but in Averyt v. Commissioner,

T.C. Memo. 2012-198, 2012 WL 2891077, at *4, we said that it does not apply to

contributions of $250 or more.

      Petitioner contends that a contemporaneous written acknowledgment from

BSDM would be superfluous because he was cofounder and president of BSDM.

Therefore, according to petitioner, “he should not be penalized for not having a

letter from himself, to himself, to document the expenditures on behalf of * * *

BSDM”. If this statement is taken to its extreme, petitioner could be understood to

contend that, since he founded and led an organization exempt from taxation under

section 501(c)(3), that all of his personal expenses for travel, flying lessons,

restaurant meals, and expenditures for gifts to numerous people, including many

of his organization’s volunteers and members of their families, are “to or for the

use of” a charitable organization for purposes of section 170. Petitioner cites no

authority for this sweeping proposition. At a minimum, we can easily conclude
                                         - 30 -

[*30] that there is no exception to section 170(f)(8)(A) for self-created

organizations.10

      We next apply these standards to several of the expenses described above.

C.    Transportation, Airplane, and Meals

      1.     Private Aircraft Rental and Flying Lessons (“Evangelization:
             Christian Outreach”--Petitioner’s Group No. 6); Other Flying-Related
             Expenses (“Evangelization: Christian Outreach Support”--
             Petitioner’s Group No. 9)

      Petitioner incurred expenses of $15,082 for aircraft rental (which he

characterized as “Evangelization: Christian Outreach”) and $3,299 for flight-

related expenses (which he characterized as “Evangelization: Christian Outreach

Support”).

      Petitioner testified that he “like[s] flying”, but emphasizes that his rental of

small aircraft was not “for [his] personal use at all * * * it’s all for my work for

God.” According to petitioner, his flying enabled him to visit small airports and

distant places to evangelize people who otherwise had no access to his preaching.




      10
         Petitioner testified that he accounted only to God for his evangelistic work
and that “getting approval from * * * [BSDM] would be getting approval from
himself”. Since BSDM provided no contemporaneous written acknowledgments
to petitioner, we need not consider what significance we would attribute to a
statement from an organization controlled by the taxpayer.
                                        - 31 -

[*31] Most of petitioner’s expenses in this category involve training flights. The

expenses associated with these flights are primarily personal and do not constitute

gifts “to or for the use of” a charity. See Orr, 343 F.2d at 557.

      Petitioner testified that when he flew with Wayne Lopez (his mechanic),

Victor Polizzi (a member of petitioner’s Biblical studies class), and the

Monsignor, he had wonderful conversations about their faith. But these flight

expenses are not made “to or for the use of” a charitable organization merely

because petitioner discusses religion while conducting the activity. The charitable

contribution deduction is disallowed where, as here, there is a substantial personal

benefit to the taxpayer. See Saltzman v. Commissioner, 54 T.C. at 725; Seed v.

Commissioner, 54 T.C. at 276. In addition the charitable contribution deduction

does not apply to the expenses of flying Mr. Lopez and Mr. Polizzi or buying a

jacket for the son of a BSDM member because those individuals were apparently

selected by petitioner because of his personal relationships with him. Thomason

v. Commissioner, 2 T.C. at 443-445; see also Seed v. Commissioner, 57 T.C. at

275-276; Sheffels, 264 F. Supp. at 88-89. As to the jacket for the son of a BSDM

member, petitioner cited no authority that persons who are active in BSDM or

members of their family are suitable objects of charity. Finally, the expenses were

not “to or for the use of” the Catholic Church or BSDM because neither
                                         - 32 -

[*32] organization provided meaningful coordination or supervision of those

activities. See Van Dusen v. Commissioner, 136 T.C. at 523-524.

       Flying Monsignor Rossi to New Jersey to officiate at a funeral was a service

to the Catholic Church, but the expenses of that trip (as well as the trips with Mr.

Polizzi and Mr. Lopez) are not deductible because the cost of each trip exceeded

$250 and petitioner did not obtain a contemporaneous written acknowledgment of

the services from the Catholic Church or BSDM as required by section 1.170A-

13(f)(10), Income Tax Regs. See Van Dusen v. Commissioner, 136 T.C. at 536-

537.

       2.    Automobile Expenses (“Pastoral Ministry: Transportation”--
             Petitioner’s Group No. 1)

       Petitioner deducted automobile expenses totaling $1,378. Petitioner

testified and contends that 100% of his vehicle use related to his evangelization

activities and that every time one of his cars passed through a toll booth the trip

was for the purpose of evangelization.

       Petitioner made 38 round trips of 68 miles each (totaling 2,584 miles) to the

Basilica to read at masses and act as a Eucharistic minister, for which he claimed a

deduction for mileage of $362 (2,584 miles at 14 cents per mile). Expenses of

commuting to church to participate in a choir at Sunday services are a form of
                                       - 33 -

[*33] religious worship and are not deductible as charitable contributions.

Churukian v. Commissioner, T.C. Memo. 1980-205. Petitioner has provided no

argument or authority that we should distinguish his activities from those in

Churukian.

      Petitioner drove numerous times from his home to and parked at various

airports. Because, as discussed above, the expenses of most of petitioner’s flights

were personal and nondeductible, these expenses also are not deductible. See Orr,

343 F.2d at 558; Cavalaris v. Commissioner, T.C. Memo. 1996-308, slip op. at 18.

      3.     Meals, Snacks, Coffee (“Evangelization: Counseling”--Petitioner’s
             Group No. 10)

      Petitioner spent $5,228 for the items in this category which he characterized

as “Evangelization--Counseling”. This category includes the cost of every meal

he ate in a restaurant in 2012. Petitioner incurred some of these expenses while he

initiated conversations in which he endeavored to provide counseling with persons

he had not previously met, including on several instances the wait staff serving

him during the meal.

      The cost of eating in a restaurant is a personal expense and is not made

deductible by evangelizing persons randomly encountered while eating. A

taxpayer may deduct reasonable expenses for meals and lodging while performing
                                         - 34 -

[*34] donated services, provided that the taxpayer satisfies the “away from home”

test under section 162 and the regulations thereunder. Sec. 1.170A-1(g), Income

Tax Regs. However, petitioner has not shown which of his meals in 2012 he

consumed while he was away from home as defined in section 162. See sec.

1.170-2(a)(2), Income Tax Regs. Finally, these expenses were not “to or for the

use of” a charitable organization because the activity lacked sufficient

coordination with the Catholic Church or BSDM. Therefore petitioner has not

shown that he may deduct any of the expenses in this category.

      4.     Travel Expenses (“Evangelization: Temporary Assignments”--
             Petitioner’s Group No. 13)

      Petitioner incurred $7,151 in expenses for five trips that he characterized as

“temporary assignments”. This includes travel expenses (including hotels, airfare,

rental car, aircraft rental, and expenses for restaurants and groceries) for trips to

Colorado (to practice flying in the mountains), New York and Texas (to visit

family members), Florida (to counsel a BSDM member), and Maryland and North

Carolina (for purposes not described in the record). We hold that these travel

expenses were primarily personal and are not deductible as charitable

contributions. See Seed v. Commissioner, 57 T.C. at 277-278; Sheffels, 264 F.

Supp. at 88-89. Petitioner’s expenses relating to a BSDM member are not
                                       - 35 -

[*35] deductible because expenses of providing services for individuals selected

for personal reasons by the taxpayer are not deductible, and petitioner has

provided no authority showing that members of BSDM qualify as recipients of

charity. See Thomason v. Commissioner, 2 T.C. at 443-444. These expenses also

are not deductible because the activity was not sufficiently coordinated with the

Catholic Church or BSDM to be considered to or for the use of either of those

organizations.

D.    Payments to or for Individuals

      1.     Gifts and Payments to Others (“Evangelization: Charitable Grants”--
             Petitioner’s Group No. 11); Maintenance Expenses at the Home of a
             BSDM Member and at St. Mary’s Church (“Evangelization: Mission
             Support”--Petitioner’s Group No. 12)

      Petitioner incurred expenses of $7,910 which he characterized as charitable

grants and $1,335 which he characterized as mission support. These amounts

were paid to provide a $500 gift card for Tom Eveler, $700 for sailing school fees

for Ann-Marie Kasuda, a $1,485 wire transfer to Sister Lila Nunez, $1,066 to pay

Marla Bankovich’s hotel expenses, the cost of a ticket to a movie which petitioner

attended with Sister Kathleen Sheldon, and $1,110.65 for maintenance at the home

of BSDM member Sister Kathleen Sheldon. These expenses are not deductible

because they were for individuals selected by petitioner for whom no substantial
                                        - 36 -

[*36] charitable need was established, see Thomason v. Commissioner, 2 T.C. at

443-445; Cavalaris v. Commissioner, slip op. at 20, and, generally speaking,

persons carrying on the work of a charitable organization are not proper objects of

charitable activity of that organization. These expenses also are nondeductible

because there was not sufficient coordination of the activity by the Catholic

Church or BSDM to treat these expenses “to or for the use of” either of these

organizations.

      Petitioner spent $224.35 on repairs at St. Mary’s Catholic Church in

Annapolis. Respondent concedes that petitioner may deduct this expense.

      2.     Gifts and Printed Material (“Pastoral Ministry: Audio Visual
             Media”--Petitioner’s Group No. 4)

      Petitioner incurred expenses for books and videos, Christmas ornaments

which he donated to others, and religious pamphlets which he gave to another

BSDM member. These expenses are not deductible because petitioner’s activities

were not sufficiently coordinated with the Catholic Church or BSDM to treat the

expenses as “to or for the use of” either of those organizations.

      Petitioner subscribed to a local newspaper. This expense was incurred

primarily for personal reasons and is therefore nondeductible. Petitioner made a

gift to RBC Ministries (not identified in the record) but did not establish a
                                         - 37 -

[*37] charitable purpose for the gift. Finally, petitioner has provided no authority

for his claim that he may deduct as a charitable contribution the cost of repairing

his crucifix.

E.    Communications and Administrative Expenses

      Petitioner deducted most of the expenses in these categories on the grounds

that the expenses of the activities discussed above (such as flying, traveling, eating

in restaurants, and gifts) were deductible as charitable contributions, and thus,

petitioner argues, his communications and administrative expenses incurred to

conduct those activities also are deductible. As discussed above, the costs of most

of these activities are not deductible. Thus, the administrative expenses of

carrying on the activities also are not deductible. Petitioner did not use his

telephone, internet service, and office supplies exclusively for charitable purposes,

and he would have paid these expenses whether or not he engaged in evangelism.

Thus, those expenses would not be deductible even if petitioner’s expenses of

flying, traveling, and eating meals were deductible. See Orr, 343 F.2d at 557.

      1.        Insurance and Legal Expenses (“Pastoral Ministry: Professional
                Expenses”--Petitioner’s Group No. 2)

      Petitioner paid $4,196 in expenses for legal advice relating to an IRS audit

of a prior year’s return and an umbrella liability policy covering petitioner and his
                                        - 38 -

[*38] former wife. Petitioner testified that the legal fees were paid for the purpose

of evangelization because “everything * * * [is] tied to evangelization.” We

disagree; these expenses are nondeductible personal expenses. The expenses of

maintaining a corporate registered agent for BSDM in Maryland are deductible.

      2.     Office Supplies and Refreshments (“Pastoral Ministry: Office
             Expenses”--Petitioner’s Group No. 3)

      Petitioner deducted $1,329 for expenses which he characterized as “Pastoral

Ministry: Office Expenses”. Petitioner did not maintain a separate office for

BSDM. All of the items purchased in this category were kept in his home and

petitioner admitted to some personal use of those items. Petitioner has not

established that substantial amounts of the expenses of his evangelical activities

were deductible as charitable expenses. Thus, we have no basis on which to

allocate between the personal and charitable use of these items. These expenses

also are not deductible because neither the Catholic Church nor BSDM had

sufficient connection with or oversight of these expenses.

      3.     Shipping Costs (“Pastoral Ministry: Shipping”--Petitioner’s Group
             No. 5)

      Petitioner paid for the rental of a post office box. Petitioner shipped

documents to his doctor, someone handling the estate for a deceased member of

BSDM, Donna Oliveri, Marta Gwynn, and Saker Aviation. These were
                                        - 39 -

[*39] nondeductible personal expenses, and expenses of providing charitable

services for individuals selected by a taxpayer are not deductible. Thomason v.

Commissioner, 2 T.C. at 443-445.

      4.     Communications (“Evangelization: Communications”--Petitioner’s
             Group No. 7); Internet and Cable Service (“Evangelization:
             Evangelization Support”--Petitioner’s Group No. 8)

      Petitioner paid $3,334 for a home telephone and a mobile phone and $973

for internet and cable television service. Petitioner contends that he may deduct

these costs because he used the cable service for continuing education, which was

necessary for his evangelization activities. We disagree; these expenses are not

deductible because they produced a substantial, direct, personal benefit to

petitioner. See Tate v. Commissioner, 59 T.C. at 550; Seed v. Commissioner, 57

T.C. at 276. In addition, these expenses would have been paid even absent

petitioner’s evangelization. Payments which petitioner would have made even if

he had done no evangelizing do not qualify as gifts to or for the use of a charitable

organization. See Orr, 343 F.2d at 557.

F.    Whether Respondent’s Denial of Petitioner’s Charitable Contribution
      Deductions Violates the First Amendment to the Constitution

      Petitioner contends that: (1) respondent violated the First Amendment of

the Constitution and the Religious Freedom Restoration Act of 1993 (RFRA), Pub.
                                         - 40 -

[*40] L. No. 103-141, 107 Stat. 1488, by treating his evangelistic activities as if

they are not a service to the Catholic Church or BSDM and (2) respondent’s audit

of petitioner’s return unconstitutionally discriminated against his religious beliefs.

      1.     Treatment of Petitioner’s Evangelism Activities Was Not
             Unconstitutional

      Petitioner contends that respondent is characterizing his evangelism as if it

were not a religious activity and that respondent’s characterization violates the

First Amendment. Petitioner mischaracterizes respondent’s position, which is that

petitioner’s expenses for evangelistic activities are not deductible as charitable

contributions under section 170, not that they are not religious activities. Not all

religious activities are services “to or for the use of” a religious organization for

purposes of section 170. See, e.g., Churukian v. Commissioner, T.C. Memo.

1980-205. Contrary to petitioner’s view, respondent’s contentions neither require

inquiry into the sincerity of petitioner’s religious beliefs nor cause entanglement

with the “intricacies of petitioner’s religious activity”.

      Petitioner contends that respondent is unconstitutionally burdening

petitioner’s free exercise of his religious beliefs and has violated RFRA sec. 3, 107

Stat. at 1488-1489, which provides in pertinent part:
                                         - 41 -

[*41]         (a) In General.--Government shall not substantially burden a
        person’s exercise of religion even if the burden results from a rule of
        general applicability, except as provided in subsection (b).

               (b) Exception.--Government may substantially burden a
        person’s exercise of religion only if it demonstrates that application
        of the burden to the person--

              (1) is in furtherance of a compelling governmental interest; and

              (2) is the least restrictive means of furthering that compelling
        governmental interest.

Petitioner contends that disallowance of his section 170 deductions violates his

right to the free exercise of religion by placing a substantial burden on his

evangelization, in that it would result in his having less money to evangelize. We

disagree. In Hernandez v. Commissioner, 490 U.S. 680, 699 (1989), the Supreme

Court said that “we need not decide whether the burden of disallowing the § 170

deduction is a substantial one, for our decision in Lee establishes that even a

substantial burden would be justified by the ‘broad public interest in maintaining a

sound tax system’”.

        Petitioner contends that the holding in Hernandez applies only to cases

involving quid pro quo contributions and therefore does not apply here. We

disagree. See Jimmy Swaggart Ministries v. Bd. of Equalization of Cal., 493 U.S.

378, 390-391, 394-396 (1990). Petitioner also asks us to not follow Hernandez
                                       - 42 -

[*42] because, according to petitioner, the taxpayers (Scientologists) in Hernandez

“were not practicing their religion.” We decline to reach that conclusion, and we

note that the Supreme Court did not draw such a conclusion. See Hernandez v.

Commissioner, 490 U.S. 680.

      2.     Respondent’s Audits Did Not Unconstitutionally Discriminate
             Against Petitioner’s Religious Beliefs

      Petitioner contends that respondent’s three audits of his Federal income tax

returns within 10 years resulted in excessive Government entanglement with his

exercise of religion. We disagree. We do not look behind a notice of deficiency

to examine the Commissioner’s motives or the administrative policy or procedure

involved in making the determination without credible evidence of

unconstitutional conduct by the Commissioner. Greenberg’s Express, Inc. v.

Commissioner, 62 T.C. 324, 327 (1974). Petitioner has not provided a basis for us

to conclude that the Commissioner unconstitutionally discriminated against his

religious beliefs.

G.    Whether Petitioner Is Liable for the Addition to Tax Under Section
      6651(a)(1) for Failure To File Timely

      An individual taxpayer is required to file a tax return on or before the 15th

day of April following the close of the calendar year. Sec. 6072(a). However, a

taxpayer can obtain an automatic six-month extension of time for filing a return,
                                        - 43 -

[*43] see sec. 6081; sec. 1.6081-4, Income Tax Regs., by filing an application on

Form 4868, sec. 1.6081-4(b)(1), (2), and (3), Income Tax Regs. Petitioner’s 2012

tax return was due on April 15, 2013, but he filed a Form 4868 to obtain an

extension to file his return. Petitioner filed his 2012 tax return on August 16,

2014, 10 months after the extended due date.

      Section 6651(a)(1) imposes an addition to tax of up to 25% for failure to file

timely Federal income tax returns unless the taxpayer shows that such failure was

due to reasonable cause and not willful neglect. United States v. Boyle, 469 U.S.

241, 245 (1985).

      The Commissioner bears the burden of production with respect to the

taxpayer’s liability for penalties and additions to tax. Sec. 7491(c). Once this

burden is met, however, the burden shifts to the taxpayer to show that the

Commissioner’s determination is incorrect. Higbee v. Commissioner, 116 T.C.

438, 446-447 (2001). Respondent has met this burden of production because

petitioner filed his return after the extended due date.

      To prove that he or she had reasonable cause, a taxpayer must show that he

or she exercised ordinary business care and prudence and was nevertheless unable

to file the return within the prescribed time. See sec. 6651(a)(1); Crocker v.

Commissioner, 92 T.C. 899, 913 (1989); sec. 301.6651-1(c)(1), Proced. & Admin.
                                          - 44 -

[*44] Regs. Petitioner contends that he had reasonable cause to file late because

he was concerned about meticulously substantiating his expenses based on his

experience in prior audits.11 We disagree. The task of carefully keeping records

does not provide reasonable cause for late filing. Therefore, we sustain the

additions to tax under section 6651(a).

H.    Whether Petitioner Is Liable for the Accuracy-Related Penalty Under
      Section 6662

      Respondent determined that petitioner is liable for the accuracy-related

penalty under section 6662(a) and (b)(2) for 2012 for un underpayment of tax

attributable to a substantial understatement of income tax. An understatement is

substantial if it exceeds the greater of 10% of the tax required to be shown on the

return or $5,000. Sec. 6662(d)(1)(A).

      Petitioner is not liable for the penalty under section 6662 if the record does

not show that it was properly determined by respondent. See Graev v.

Commissioner, 149 T.C. 485, 492-493 (2017), supplementing and overruling in

part 147 T.C. 460 (2016). In order to meet the burden of production for this


      11
        See supra note 8. Respondent audited petitioner’s returns for 2008,
Oliveri v. Commissioner, T.C. Dkt. No. 14773-08S (filed June 16, 2008), and for
2010, Oliveri v. Commissioner, T.C. Dkt. No. 3494-11S (filed Feb. 11, 2011).
Petitioner agreed in both of those cases that he had a deficiency in tax for those
prior years.
                                       - 45 -

[*45] penalty, respondent must show that there was written supervisory approval

of the initial penalty determination. See secs. 6751(b)(1), 7491(c); Chai v.

Commissioner, 851 F.3d 190, 221 (2d Cir. 2017), aff’g in part, rev’g in part T.C.

Memo. 2015-42; Graev v. Commissioner, 149 T.C. at 492-493. The record

contains no evidence of the requisite supervisory approval for this penalty. Thus,

respondent did not meet the burden of production and petitioner is not liable for

the accuracy-related penalty for 2012. See Platts v. Commissioner, T.C. Memo.

2018-31; Ford v. Commissioner, T.C. Memo. 2018-8.

I.    Conclusion

      Petitioner may deduct charitable contributions for 2012 to the extent stated

above and is liable for the addition to tax under section 6651(a)(1).


                                                Decision will be entered under

                                       Rule 155.
