                     T.C. Summary Opinion 2011-84



                        UNITED STATES TAX COURT



                  LESTER DALE ANDERSON, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 9042-10S.              Filed July 6, 2011.



        Lester Dale Anderson, pro se.

        Anna A. Long, for respondent.



     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.
                               - 2 -

      Respondent determined a deficiency of $4,472 in petitioner’s

Federal income tax and an addition to tax under section

6651(a)(1) of $861.75 for 2005.    After concessions by respondent,

the issues remaining for decision are:    (1) Whether petitioner is

entitled to deduct any of the medical expenses claimed on

Schedule A, Itemized Deductions, of his 2005 income tax return

remaining in dispute; (2) whether petitioner is entitled to

deduct any of the charitable contributions claimed on Schedule A

of his 2005 income tax return; (3) whether petitioner is entitled

to deduct any of the miscellaneous expenses claimed on Schedule A

of his 2005 income tax return; and (4) whether petitioner is

liable for an addition to tax pursuant to section 6651(a)(1).

      All section references are to the Internal Revenue Code in

effect for 2005, and all Rule references are to the Tax Court

Rules of Practice and Procedure.

                            Background

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

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.    Petitioner resided in

California when the petition was filed.

I.   Introduction

      Petitioner has worked as a procurement agent for numerous

manufacturing companies throughout his career.    However, in 2005

he was unemployed from January through June.    Throughout this
                               - 3 -

period, petitioner sought permanent employment.    Petitioner filed

a claim for unemployment benefits with the State of California on

March 27, 2005.

     Petitioner filed his 2005 Form 1040, U.S. Individual Income

Tax Return, on May 19, 2008, more than 2 years after it was due,

computing his tax using a filing status of “Married filing

separately”.   Petitioner claimed an exemption for his wife.

Petitioner’s wife did not file a tax return for 2005.1

     Petitioner did not file Form 4868, Application for Automatic

Extension of Time To File U.S. Individual Income Tax Return, and

the record does not indicate that he otherwise requested an

extension of time to file his 2005 income tax return.

     Respondent disputes three deductions that petitioner claimed

on Schedule A of his 2005 income tax return.    The first of the

disputed deductions is $15,749 in medical expenses incurred for

petitioner’s and petitioner’s wife’s medical treatments.

Respondent now concedes $11,456 of these medical expenses.     The

second disputed deduction is $7,660 in charitable contributions.

The third involves $7,538 of miscellaneous expenses related to

petitioner’s search for permanent employment.     The relevant facts

relating to the disputed deductions follow.




     1
      Petitioner’s wife is disabled and receives nontaxable
disability and Social Security benefits.
                                   - 4 -

II.    Petitioner’s Medical Expenses

       On Schedule A of his 2005 income tax return, petitioner

deducted $15,749 in unreimbursed medical expenses for both

himself and his wife.    Respondent initially disallowed the entire

deduction, but after reviewing petitioner’s documentation he

conceded $11,456 of the claimed medical expenses.        At trial

petitioner informed the Court that he was in contact with

insurance companies to procure additional documentation with

respect to his wife’s medical expenses for 2005.        The Court

agreed to keep the record open for 30 days to permit petitioner

to submit additional documentation.        Petitioner ultimately

provided a document from Prescription Solutions detailing his

wife’s prescriptions in 2005 totaling $796.60.        Concurrently with

the submission of this document, petitioner claimed an additional

deduction for medical-related mileage totaling $211.12 (520 miles

driven at 40.6 cents per mile).

III.    Charitable Contributions

       Petitioner deducted $7,660 for charitable contributions with

respect to donations to two organizations.        The first of these

donations (noncash donations) relates to books, clothing, and

drapes petitioner gave to AMVETS Service Foundation (AMVETS).          At

trial petitioner submitted a receipt from AMVETS for:        (1) “Bags

of Clothing”; (2) “Miscellaneous”; (3) “Drapes”; and (4)
                                 - 5 -

“Other”.2     In addition, petitioner submitted a list (prepared in

2008) setting forth values which he had assigned to the noncash

donations, as follows:

                                     Value of Each Item         Total
     Item           Quantity       Assigned by Petitioner       Value

Craftmaking         52 books              $30                $1,560
  books

Other hardback      44 books               10                    440
  books

Clothing             14 bags               40                    560

Drapes & drapery       1 set              100                    100
  rod

Miscellaneous              1              200                    200

     The craftmaking books were given to petitioner by his

sister-in-law, who had collected them over a 25-year period.3

Petitioner and/or his wife had purchased the remaining items

donated, but he presented no receipts or other documentation as

to their costs.

     The second donation relates to cash contributions petitioner

allegedly made to his church totaling $4,800.    Petitioner avers

that each time he attended church services he put “about $100”


     2
      The AMVETS Service Foundation receipt includes a disclaimer
which states that “AMVETS is not required to value the property
it receives from the donor. I.R.S. Code places the
responsibility for estimating the ‘fair market value’ upon the
donor.”
     3
      Petitioner had previously attempted to sell the books but
was unable to do so. Therefore, he decided to donate the books
to charity.
                                - 6 -

cash into the collection basket.    Petitioner asked his minister

to give him a letter corroborating the amounts of his

contributions, but the minister declined to do so, stating:     “I

don’t think it would be the best thing to do.”

IV.   Miscellaneous Expenses

      Petitioner actively searched for a permanent job during his

period of unemployment (January to June) in 2005.      He ultimately

found temporary employment following the period in which he was

unemployed.

      On Schedule A of his 2005 income tax return, petitioner

deducted $7,538 in miscellaneous expenses.    These expenses

consisted of the following:

          Item             Monthly Amount    No. of Months      Total

Cellular telephone              $43.80            12            $526

Newspaper                        10.00            12             120

In addition, petitioner claimed mileage expenses of $6,677 with

respect to his job search (16,486 miles driven at 40.5 cents per

mile).4    No documentation corroborating any of the miscellaneous

expenses was submitted.

      The cellular telephone expenses petitioner deducted were an

estimate of the portion of his telephone bill that were job-




      4
      We are mindful that the aforementioned miscellaneous
expenses total $7,323, not $7,538. No explanation for the $215
difference was given.
                                - 7 -

search related calls.    At trial he acknowledged that he “probably

overstated the estimate for cell phone” expenses.

       The newspaper expenses deducted relate to the monthly

charges petitioner incurred for newspaper delivery.      Petitioner

maintains he reviewed the want-ads for job opportunities and

pursued all promising job openings.     He claims he read the

newspapers not for their news content, but rather for the want-

ads.

       Petitioner did not keep a log detailing the mileage for each

job-seeking trip or listing the nature of each trip, and he

admitted error in calculating the specific mileage.      He stated

that he had actually driven 6,486 miles, which at 40.5 cents per

mile would reduce the amount claimed for job search mileage to

$2,627.

                             Discussion

       It is well established that deductions are a matter of

legislative grace, and taxpayers bear the burden of proving they

are entitled to all deductions claimed.      Rule 142(a); INDOPCO,

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

Co. v. Helvering, 292 U.S. 435, 440 (1934).      Moreover, taxpayers

must substantiate the amount and purpose of the item deducted.

Hradesky v. Commissioner, 65 T.C. 87, 89-90 (1975), affd. per

curiam 540 F.2d 821 (5th Cir. 1976).      Taxpayers are required to

maintain records that are sufficient to enable the Commissioner
                                 - 8 -

to determine their correct tax liability.       See sec. 6001;

Meneguzzo v. Commissioner, 43 T.C. 824, 831-832 (1965); sec.

1.6001-1(a), Income Tax Regs.    Under certain circumstances, if a

taxpayer establishes entitlement to a deduction but not the

amount, the Court may estimate the amount allowable.        Cohan v.

Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930).        We generally

will not estimate a deductible expense unless the taxpayer

presents sufficient evidence to provide some basis upon which an

estimate may be made.     Vanicek v. Commissioner, 85 T.C. 731, 742-

743 (1985).

     Section 274(d) supersedes the Cohan doctrine for certain

categories of expenses.     Sanford v. Commissioner, 50 T.C. 823,

827-828 (1968), affd. per curiam 412 F.2d 201 (2d Cir. 1969).

Generally, a deduction is disallowed for travel expenses, meals

and entertainment, and listed property unless the taxpayer

properly substantiates:    (1) The amount of the expense; (2) the

time and place of the expense; (3) the business purpose of the

expense; and (4) in the case of meals and entertainment (not

relevant here), the business relationship between the taxpayer

and the persons being entertained.       Sec. 274(d).   Listed property

includes passenger automobiles, sec. 280F(d)(4)(A)(i), and

cellular telephones, sec. 280F(d)(4)(A)(v).       Generally,

deductions for expenses subject to the strict substantiation

requirements of section 274(d) must be disallowed in full unless
                               - 9 -

the taxpayer satisfies every element of those requirements.

Sanford v. Commissioner, supra at 827-828; Robinson v.

Commissioner, T.C. Memo. 2011-99; sec. 1.274-5T(a), Temporary

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

Contemporaneous logs are not required, but corroborative evidence

to support a taxpayer’s reconstruction of the elements of an

expenditure or use must have “a high degree of probative value to

elevate such statement” to the level of credibility of a

contemporaneous record.   Sec. 1.274-5T(c)(1), Temporary Income

Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985).

     Deductions for listed property used for both personal and

business purposes are disallowed unless the taxpayer establishes

the amount of business use of the property.     Robinson v.

Commissioner, supra; Olsen v. Commissioner, T.C. Memo. 2002-42,

affd. 54 Fed. Appx. 479 (9th Cir. 2003); sec. 1.274-

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

(Nov. 6, 1985).

I.   Petitioner’s Medical Expenses

     A taxpayer may deduct medical expenses not compensated for

by insurance or otherwise for himself or herself, his or her

spouse, or a dependent as defined in section 152.    Sec. 213(a).

Respondent concedes that petitioner is entitled to $11,456 of the

claimed $15,749 of medical expenses for 2005.    With respect to

the remaining $4,293, as stated supra p. 4, petitioner produced
                                 - 10 -

documentation sufficient to substantiate an additional $796.60 of

medical expenses.

      With respect to petitioner’s claimed medical automobile

mileage, petitioner has not satisfied the heightened

substantiation requirements of section 274(d).       We therefore

sustain respondent’s disallowance of the deduction.

      In sum, petitioner is entitled to deduct medical expenses of

$12,252.60 for 2005.

II.   Charitable Contributions

      Petitioner claimed a charitable contribution deduction of

$7,660 on Schedule A of his 2005 income tax return.

      In general, section 170(a) allows a deduction for any

charitable contribution the payment of which is made within the

taxable year.    Charitable contributions, however, are deductible

only if verified under regulations prescribed by the Secretary.

Sec. 170(a)(1); Hewitt v. Commissioner, 109 T.C. 258, 261 (1997),

affd. without published opinion 166 F.3d 332 (4th Cir. 1998).

      A.   Cash Contribution to Petitioner’s Church

      Section 1.170A-13(a), Income Tax Regs., provides that if a

taxpayer makes a cash contribution, he shall maintain for each

contribution one of the following:        (i) A canceled check; (ii) a

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.     Petitioner maintained none of
                               - 11 -

these records.   Because petitioner did not substantiate his cash

contributions, we sustain respondent’s disallowance of the

deduction.

     B.   Noncash Contribution to AMVETS

     For charitable contributions made in property other than

cash, the value of the contribution is the fair market value at

the time of contribution.    Hewitt v. Commissioner, supra at 261;

sec. 1.170A-1(c)(1), Income Tax Regs.      The fair market value of

contributed property is the price at which the property would

change hands between a willing buyer and a willing seller,

neither being under any compulsion to buy or sell and both having

reasonable knowledge of relevant facts.     Sec. 1.170A-1(c)(2),

Income Tax Regs.

     In general, for noncash charitable contributions, a taxpayer

must maintain for each contribution a receipt from the donee

showing the name of the donee, the date and location of the

contribution, and a description of the donated property in detail

reasonably sufficient under the circumstances.     See sec. 1.170A-

13(b)(1), Income Tax Regs.

     Petitioner provided no documentation describing the

contributed property beyond referring to the noncash

contributions as “lace books” (i.e., the craftmaking books),

“hardback books”, bags of clothing, drapes and drapery rod, and

“miscellaneous”.   The reliability of the list of property
                                 - 12 -

petitioner donated to AMVETS is weakened by the fact it was

prepared in 2008, not 2005.      Moreover, it appears that in many

cases (e.g., the craftmaking books) petitioner’s valuations are

high.    And petitioner candidly admitted that the valuation for

the property contributed was simply a “fair number” that he

“arbitrarily” estimated.     Consequently, we are unable to

determine or estimate with any degree of certainty the correct

value of the noncash property petitioner donated to AMVETS.       We

therefore sustain respondent’s disallowance of the deduction.

III.    Miscellaneous Expenses

       Miscellaneous expenses are deductible to the extent they are

allowable and exceed 2 percent of adjusted gross income.      Sec.

67(a).      Miscellaneous expenses include job-seeking expenses so

long as the taxpayer seeks employment in his current trade or

business and the expenses are directly connected with the trade

or business.      Secs. 67(b), 162; Rev. Rul. 77-16, 1977-1 C.B. 37.

       A.   Newspaper Expenses

       Petitioner deducted newspaper expenses of $120, asserting

that he purchased the newspapers solely to assist in his job

search.      Section 262(a) disallows a deduction for personal,

living, or family expenses.      The taxpayer bears the burden of

proving that an expense was for business or income-producing

purposes rather than for personal reasons.      Walliser v.

Commissioner, 72 T.C. 433, 437 (1979).
                              - 13 -

     The purchase of general circulation newspapers is a personal

expense that taxpayers may not deduct.   Stemkowski v.

Commissioner, 690 F.2d 40, 47 (2d Cir. 1982), affg. in part and

revg. in part 76 T.C. 252 (1981).   We therefore sustain

respondent’s disallowance of the deduction for newspaper

expenses.

     B.   Cellular Telephone and Automobile Expenses

     As noted supra p. 8, cars and trucks and cellular telephones

are “listed property” pursuant to section 280F(d)(4)(A)(i) and

(v), respectively.

     With respect to petitioner’s cellular telephone expenses,

petitioner did not present his telephone bills or any other

documents evidencing that the expenses were incurred.    Further,

he did not present any evidence to demonstrate the business

purpose of the expenses.   Moreover, petitioner admitted at trial

that the estimate he used on his self-prepared list was

incorrect.   At trial he said the monthly cost was “probably

around $25”.   However, that, too, was only a guess.   We do not

doubt that petitioner used his cellular telephone to assist in

his job hunt, but petitioner’s testimony alone is not sufficient

to meet the requirements of section 274(d).

     With respect to petitioner’s automobile mileage deductions,

again petitioner failed to demonstrate the business purpose of

the automobile use or distinguish between his personal use vis-a-
                                 - 14 -

vis business use of the automobile.       Moreover, petitioner’s list

contained, by his own admission, numerous errors, and is not an

adequate record within the purview of section 274(d).      Again, we

do not doubt that petitioner used his car in his job search, but

his testimony is not sufficient to meet the requirements of

section 274(d).

      We therefore sustain respondent’s denial of petitioner’s

cellular telephone and automobile expense deductions.

IV.   Addition to Tax Under Section 6651(a)(1)

      Section 6651(a)(1) imposes an addition to tax for a

taxpayer’s failure to timely file an income tax return unless the

failure to file is due to reasonable cause and not willful

neglect.     This addition to tax consists of adding to the amount

required to be shown as tax on the return 5 percent of the amount

of such tax for each complete or partial month in which the

failure to file continues, up to a maximum of 25 percent in the

aggregate.     Id.   Respondent has the burden of production pursuant

to section 7491(c).     To satisfy that burden, respondent must

produce sufficient evidence demonstrating that it is appropriate

to impose the addition to tax.     See Higbee v. Commissioner, 116

T.C. 438, 446 (2001).     Once respondent has met his burden of

production, petitioner must come forward with evidence sufficient

to persuade the Court that respondent’s determination is

incorrect.    Id. at 447.
                              - 15 -

     Respondent has satisfied his burden of production.   The

record clearly reflects that petitioner did not timely file his

2005 income tax return.   And petitioner has not demonstrated that

his failure to timely file his 2005 income tax return was due to

reasonable cause and not due to willful neglect.5

     At trial petitioner candidly admitted that he would not file

Federal income tax returns if he believed he was due a refund.

“If they owe me money, I don’t file.”   Petitioner believed that

he was owed a refund in 2005; hence he did not file a tax return

for 2005.   However, by 2008, petitioner’s wife convinced him to

file a tax return for 2005.   As it happened, respondent, upon

reviewing the late-filed tax return, determined that petitioner

had a deficiency in tax, which according to petitioner,

“dumbfounded” him.

     Petitioner has not demonstrated reasonable cause for the

delay in filing his 2005 Federal income tax return.   He is

therefore liable for the section 6651(a)(1) addition to tax.

     To reflect concessions, and to take into account the

additional $796.60 of medical expenses petitioner substantiated,




     5
      Reasonable cause requires a taxpayer to demonstrate that he
exercised ordinary business care and prudence but nonetheless was
unable to file a return within the prescribed time. United
States v. Boyle, 469 U.S. 241, 245-246 (1985); Bruner v.
Commissioner, T.C. Memo. 1998-246.
                             - 16 -

respondent must recompute both the tax deficiency and the

addition to tax for 2005.6


                                        Decision will be entered

                                   under Rule 155.




     6
      When petitioner submitted posttrial medical expense
documentation, he requested that his filing status for 2005 be
changed from married filing separately to married filing jointly.
While a taxpayer in general may change his filing status, this
change may not be made after the Commissioner has mailed a notice
of deficiency to either spouse and there has been a timely filing
of a petition in this Court with respect to the notice. Sec.
6013(b)(2)(B). Moreover, petitioner provided no evidence that
his wife intended to file jointly with him for 2005. See, e.g.,
Etesam v. Commissioner, T.C. Memo. 1998-73.
