                   T.C. Summary Opinion 2009-196



                      UNITED STATES TAX COURT



              IAN AND MARY A. MENZIES, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 4569-08S.             Filed December 15, 2009.



     Ian and Mary A. Menzies, pro sese.

     David Weiner and E. Abigail Raines, for respondent.



     GOLDBERG, Special Trial 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.   Unless otherwise indicated, subsequent section references

are to the Internal Revenue Code in effect for the year in issue,
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and all Rule references are to the Tax Court Rules of Practice

and Procedure.

     Respondent determined a $4,137 deficiency in petitioners’

Federal income tax for 2005.   The sole issue for decision is

whether Ian Menzies (petitioner) is entitled to deduct $18,6491 in

unreimbursed employee business expenses for 2005.

                            Background

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

The stipulation of facts and the attached exhibits are

incorporated herein by reference.   Petitioners resided in Indiana

when they filed their petition.

     Petitioner held two jobs during 2005 interspersed with two

periods of unemployment.   From January until February 2005 he was

unemployed.   For the next 3 months he was employed by Porter

Restoration (Porter) working as a fire restoration field

technician.   After another period of unemployment petitioner was

employed by Titan Security (Titan), where he worked from June

through the end of 2005 as a field operations supervisor.

Petitioner received approximately $23,000 in wages from Porter

and Titan and $5,369 in unemployment compensation during 2005.

     As a fire restoration field technician, petitioner would go

into homes that had been damaged by fire and water and conduct


     1
      The $18,649 is the amount of petitioner’s unreimbursed
employee business expenses for 2005 before subtracting 2 percent
of adjusted gross income as required by sec. 67(a).
                                 - 3 -

emergency cleanup, including boarding up properties and pumping

out water from flooded basements.    Porter furnished a truck that

carried the tools required to complete a cleanup assignment.      The

cleanup crews worked in teams.    Whichever worker lived closest to

Porter’s office would pick up the truck and meet petitioner and

the other workers at the first jobsite.    Accordingly, petitioner

would often report directly to a jobsite from his home.

Petitioner would then travel to the subsequent jobsites for the

day using his own vehicle.    Often, he would travel to several

jobsites in 1 day using his own vehicle.    Petitioner usually

worked a regular schedule during the day but, on occasion, Porter

required him to go to worksites at night.

     As a security field supervisor for Titan, petitioner would

often visit 10 to 20 sites during a single shift, using his own

vehicle.   Shifts were either 8 or 12 hours long, depending on the

staffing levels.    Petitioner’s duties were to drive around and

check the properties of Titan’s clients to ensure that the

facilities were adequately secured by Titan’s security guards.

Petitioner used his own vehicle to drive to the various

locations.   Petitioner usually worked from Titan’s main office in

downtown Chicago.    He also filled in as a security guard when the

staffing situation required, and on occasion he guarded people

rather than property.    In connection with his employment, Titan

required petitioner to be armed at all times while on duty.      He
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was one of only a very small number of Titan employees who were

“arms-qualified”.   He also trained other employees in security

techniques and handling firearms.

     During this period petitioner also served as an unpaid

volunteer reserve police officer for the Porter County Sheriff’s

Department in Indiana.   As a reserve police officer, petitioner

was required to carry a firearm and undergo the same training as

full-time police officers.

     On Schedule A, Itemized Deductions, for 2005 petitioner

deducted $18,649 in unreimbursed employee business expenses for

his two jobs.   These expenses consisted of $12,249 for business

use of his personal vehicle, $400 for travel, and $6,000 for

other miscellaneous unreimbursed employee business expenses.

Neither of petitioner’s two employers had a reimbursement policy

for their employees’ business-related expenses.

     Petitioners filed a joint Federal income tax return for 2005

reporting adjusted gross income of $106,237, consisting of

approximately $76,000 that Mrs. Menzies earned from her

employment as an insurance underwriting manager, approximately

$23,000 petitioner earned from his two jobs as a fire restoration

field technician and security field supervisor, and $5,369 from

petitioner’s unemployment compensation.

     Respondent, in a notice of deficiency dated January 7, 2008,

disallowed all of petitioner’s $18,649 in unreimbursed employee
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business expenses because of a lack of substantiation, resulting

in a Federal income tax deficiency of $4,137 for 2005.

                              Discussion

I.    Burden of Proof

       In general, the Commissioner’s determination set forth in a

notice of deficiency is presumed correct, and the taxpayer bears

the burden of showing that the determination is in error.       Rule

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

section 7491(a), the burden of proof as to factual matters may

shift to the Commissioner under certain circumstances.

Petitioner has neither alleged that section 7491(a) applies nor

established compliance with the requirements of section 7491(a).

Therefore petitioner retains the burden of proof.

II.   Deductions

       A.   Deductions in General

       Deductions are a matter of legislative grace, and the

taxpayer bears the burden of proving entitlement to any deduction

claimed on a return.     INDOPCO, Inc. v. Commissioner, 503 U.S. 79,

84 (1992).     Taxpayers must maintain records sufficient to

substantiate the amounts of the deductions claimed.     Sec. 6001;

Ronnen v. Commissioner, 90 T.C. 74, 102 (1988).     Where the

taxpayer establishes that the failure to produce adequate records

is due to a loss of the records through circumstances beyond the

taxpayer’s control, the taxpayer may substantiate the deduction
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by reasonable reconstruction of the records.     Gizzi v.

Commissioner, 65 T.C. 342, 345 (1976); sec. 1.274-5T(c)(5),

Temporary Income Tax Regs., 50 Fed. Reg. 46022 (Nov. 6, 1985).      A

loss beyond the taxpayer’s control includes events such as fire,

flood, or earthquake.   Gizzi v. Commissioner, supra at 345.

     Section 162(a) allows a deduction for ordinary and necessary

expenses incurred during the taxable year in carrying on a trade

or business.   Generally, the performance of services as an

employee constitutes a trade or business.     Primuth v.

Commissioner, 54 T.C. 374, 377 (1970).    For such expenses to be

deductible, the taxpayer must not have received reimbursement and

must not have the right to obtain reimbursement from his

employer.   See Orvis v. Commissioner, 788 F.2d 1406, 1408 (9th

Cir. 1986), affg. T.C. Memo. 1984-533; Leamy v. Commissioner, 85

T.C. 798, 810 (1985).

     If a taxpayer establishes that an expense is deductible but

is unable to substantiate the precise amount, the Court may

estimate the amount, bearing heavily against the taxpayer whose

inexactitude is of his own making.     Cohan v. Commissioner, 39

F.2d 540, 543-544 (2d Cir. 1930) (the Cohan rule or simply

Cohan).   The taxpayer must present sufficient evidence for the

Court to form an estimate because without such a basis, any

allowance would amount to unguided largesse.     Williams v. United
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States, 245 F.2d 559, 560-561 (5th Cir. 1957); Vanicek v.

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

     Section 274(d), however, supersedes the Cohan rule with

regard to certain expenses.     Sanford v. Commissioner, 50 T.C.

823, 827 (1968), affd. 412 F.2d 201 (2d Cir. 1969); Sec. 1.274-

5T(a), Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6,

1985).    Section 274(d) requires stricter substantiation for

certain expenses including travel, meals, and listed property

such as personal automobiles.    Section 274(d) requires taxpayers

to provide adequate records or sufficient other evidence to

corroborate the taxpayer’s statements as to the amount, time,

place, business purpose, and business relationship of certain

expenses.    See sec. 1.274-5T(a), Temporary Income Tax Regs.,

supra.    Taxpayers must maintain and produce substantiation that

will constitute proof of each expenditure or use.    Sec. 1.274-

5T(c)(1), Temporary Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6,

1985).

     Considering the above well-established principles, the Court

turns to the deductibility of petitioner’s claimed $18,649 in

unreimbursed employee business expenses for 2005.

     B.   Vehicle Expenses

     Petitioner claimed vehicle expenses of $12,249 for use of

his personal vehicle during 2005, a 1998 Ford Crown Victoria.

Petitioner used this vehicle for commuting and for travel that
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Porter and Titan required.   The Ford was one of three cars owned

by petitioners’ household.   The other vehicles included a car

used by Mrs. Menzies for her insurance underwriting work and a

Grand Prix used for their “personal pleasure”.   Petitioner

reported on Form 2106-EZ, Unreimbursed Employee Business

Expenses, that he drove the Ford 52,000 miles in 2005, of which

27,400 miles were business-related travel, 14,480 miles were for

commuting, and 11,200 miles were for personal travel.

     Petitioner calculated the amount of the deduction by

multiplying the business mileage by the standard mileage rates in

effect during 2005.   Each workday, petitioner recorded the

mileage from his first worksite to the last worksite of the day

in a “day planner”.   Petitioner noted all the sites he visited

during the day; however, he did not record the mileage between

sites.

     Petitioner testified that he discarded his day planner in

2007, sometime after filing his 2006 return and receiving his

refund, because he felt the documentation was no longer

necessary.   Petitioner was therefore unable to produce any

records to substantiate the business mileage and, further, he did

not attempt to reconstruct a record of his business mileage.

     The Court believes petitioner incurred unreimbursed vehicle

expenses related to his work for Porter and Titan during 2005.

However, the Court may not estimate vehicle expenses under Cohan.
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See Sanford v. Commissioner, supra; Rodriguez v. Commissioner,

T.C. Memo. 2009-22 (the strict substantiation requirement of

section 274(d) precludes the Court and taxpayers from

approximating expenses); sec. 1.274-5T(a), Temporary Income Tax

Regs., supra.     Therefore, we must sustain respondent’s

determination.

     C.     Travel Expenses

     Petitioner also claimed $400 for travel expenses for an

overnight trip to Morristown, Tennessee, in 2005 for training in

fire and flood restoration in connection with his job at Porter.

He did not maintain any receipts or other documentation verifying

the expense but testified that the $400 included one night of

lodging, two meals each day, and gasoline costs for his car.       He

could not recall exactly how much he separately spent for

lodging, meals, or gasoline.

     For travel expenses, section 274(d) requires the taxpayer to

substantiate:     (1) The amount of the expense; (2) the time and

place the expense was incurred; and (3) the business purpose for

which the expense was incurred.    Sec. 1.274-5T(b)(2), Temporary

Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985).        Petitioner

did not satisfy the first or the second element.    He was unable

to show receipts or other evidence of the expenses associated

with this trip, and he did not provide a reconstruction of the

expenses.
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     In the case of travel expenses, including meals and lodging

while away from home, section 274(d) again overrides the Cohan

rule.    Sanford v. Commissioner, supra.      Unfortunately, without

substantiation, petitioner may not deduct these travel expenses.

We therefore sustain respondent’s determination.

        D.   Other Miscellaneous Unreimbursed Employee Business
             Expenses

     Petitioner deducted $6,000 for other miscellaneous

unreimbursed employee business expenses that he incurred in 2005.

He testified that these expenditures included new uniform items,

a specialized winter coat, duty gear, two pairs of steel-toed

work boots, battle dress uniform (BDU-style) duty pants, a duty

belt, a weapon holster, handcuffs, a flashlight, a bullet-

resistant vest, a Sig Sauer Model P229 semiautomatic handgun

which he purchased for about $1,000, and bullets.        Petitioner

also testified that he made all of the purchases during 2005,

that he used the items exclusively for his security job with

Titan, and that he did not receive reimbursement and was not

eligible to receive reimbursement for these purchases.

     Expenses for clothing are deductible only if the clothing is

of a type specifically required as a condition of employment and

is not adaptable to general or personal use.        Yeomans v.

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

Commissioner, T.C. Memo. 1994-514.        Under section 262(a), no

deductions are allowed for personal, living, or family expenses.
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     The Court finds petitioner’s testimony to be highly credible

with respect to the items he purchased and the employers’ lack of

a reimbursement policy.   We also find that most of the clothing

that petitioner purchased during 2005 was required by Porter or

Titan and was not adaptable to personal use.

     In summary, using our best judgment and on the entire record

before us, the Court is satisfied that petitioner purchased, and

was not reimbursed for, many miscellaneous work-related items for

his employment with Titan and Porter in 2005.   However, under

Cohan, we must bear heavily against petitioner.   Petitioner could

not recollect many of the items that made up the $6,000 in

expenses he claimed.   Accordingly, petitioner is limited to a

deduction of $3,000, subject to the 2-percent floor for other

miscellaneous unreimbursed employee business expenses for 2005.

     To reflect the foregoing,


                                         Decision will be entered

                                    under Rule 155.
