                        T.C. Memo. 2009-172



                      UNITED STATES TAX COURT



                 JOHN J. MCGOWAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 12006-08, 12007-08,    Filed July 20, 2009.
                 12008-08, 12009-08.



     John J. McGowan, pro se.

     Michael T. Sargent, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     JACOBS, Judge:   In these consolidated cases,1 respondent

determined the following deficiencies and additions to tax with

respect to petitioner’s Federal income taxes for years 2002-05:




     1
      These cases were consolidated by Order dated Jan. 5, 2009.
                                  - 2 -

                                 Additions to Tax
Year       Tax      Sec. 6651(a)(1)   Sec. 6651(a)(2)    Sec. 6654

2002    $2,625.00       $590.63            $656.25          $87.73
2003     9,825.60      1,698.44           1,698.44          190.92
2004     8,007.00      1,801.58           1,321.16          232.38
2005     6,459.00      1,453.28             259.05          678.20

       The issues for decision are:   (1) Whether respondent

correctly determined petitioner’s income for years 2002-05, (2)

the amounts, if any, of business expenses (automobile mileage

expenses and unreimbursed meal expenses) petitioner may deduct

for years 2002-04, and (3) whether petitioner is liable for

additions to tax under sections 6651(a)(1) and (2) and 6654 for

years 2002-05.

       Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect for the years in issue, and

all Rule references are to the Tax Court Rules of Practice and

Procedure.

                          FINDINGS OF FACT

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

The stipulation of facts and attached exhibits are incorporated

herein by this reference.

       Petitioner resided in Connecticut at the time the petitions

in these consolidated cases were filed.

       Petitioner failed to file tax returns for 2002-05.

Consequently, pursuant to the provisions of section 6020(b),

respondent prepared substitutes for returns for petitioner for
                                 - 3 -

each of these years that were based on information provided by

third-party payors, as follows:

                                  2002

         Payor                    Form                   Amount

Servco Oil                    W-2                        $6,340
Servco Oil                    W-2                        16,167
William J. Loosemore, Jr.     1099-MISC                   2,097

                                  2003

         Payor                    Form                   Amount

Servco Oil                    W-2                       $11,699
                                                        1
St. of Conn. Dept.            1099-G                      15,483
  of Labor
Safe-Way Pilot Car Service    1099-MISC                  11,203
Servco Oil Sec. 401(k) Plan   1099-R                     11,386

                                  2004

         Payor                    Form                   Amount

Standard Oil of Conn.         W-2                       $36,848
                                                         1
St. of Conn. Dept.            1099-G                       3,093
  of Labor
Safe-Way Pilot Car Service    1099-MISC                    8,764

                                  2005

         Payor                    Form                   Amount

Standard Oil of Conn.             W-2                   $47,357
     1
      These payments were for unemployment compensation.

     Petitioner worked for Servco Oil and Standard Oil of

Connecticut as a truck driver.    In addition, he worked for

William J. Loosemore, Jr., and Safe-Way Pilot Car Service (Safe-
                                 - 4 -

Way)2 as a pilot vehicle escort for wide and/or oversize load

trucks.   In performing this task he used his own automobile.    The

business logs provided by William J. Loosemore, Jr., show the

number of miles petitioner drove his automobile as a pilot

vehicle escort to be as follows:

                     Year                  Miles

                     2002                  2,206
                     2003                 11,702
                     2004                  7,937

      Petitioner received income of $38,727 in 2001 from Servco

Oil; he failed to file a return for that year.     The record does

not indicate whether respondent prepared a substitute for return

for petitioner for 2001.

                                OPINION

A.   Respondent’s Determination of Petitioner’s Income for
     Years 2002-05

      As a general rule, the Commissioner’s determinations in the

notice of deficiency are presumed correct, and the taxpayer bears

the burden of proving error.3    Rule 142(a); Welch v. Helvering,

290 U.S. 111, 115 (1933).   The Commissioner has the burden of

producing evidence appropriate to impose a relevant penalty,


      2
      William J. Loosemore, Jr., was the owner of Safe-Way Pilot
Car Service.
      3
      Sec. 7491(a)(1) (which shifts the burden of proof to
respondent) does not apply in the instant case because petitioner
did not introduce credible evidence or comply with the
substantiation and record keeping requirements of sec.
7491(a)(2).
                               - 5 -

addition to tax, or additional amount.    Sec. 7491(c); Higbee v.

Commissioner, 116 T.C. 438, 446 (2001).

     The parties stipulated that during years 2002-05 petitioner

received payments from Servco Oil, the Servco Oil Section 401(k)

plan, Standard Oil of Connecticut, William J. Loosemore, Jr.,

Safe-Way, and the State of Connecticut Department of Labor.

Petitioner, however, denies the accuracy of the amounts set forth

on the Forms W-2, Wage and Tax Statement, 1099-MISC,

Miscelleneous Income, 1099-R, Distributions From Pensions,

Annuities, Retirement, or Profit-Sharing Plans, IRAs, Insurance

Contracts, etc., and 1099-G, Certain Government Payments,

provided to respondent.

     Section 6020(b) provides that when preparing a substitute

for return, the Secretary shall make such return from his own

knowledge and from such other information as he can obtain

through testimony or otherwise.   Respondent may rely on Forms W-

2, 1099-MISC, 1099-R, and 1099-G from third-party payors when

determining a taxpayer’s tax liability.   See, e.g., Cabirac v.

Commissioner, 120 T.C. 163, 167 (2003); Spurlock v. Commissioner,

T.C. Memo. 2003-124.   However, if in a court proceeding a

taxpayer asserts a reasonable dispute with respect to any item of

income reported on an information return filed with the

Secretary, and if the taxpayer has fully cooperated with the

Secretary, the Secretary has the burden of producing reasonable
                                - 6 -

and probative information concerning the deficiency in addition

to such information return.    See sec. 6201(d).

      Petitioner admits that he does not know the amount of income

he received from his employers even as he denies the accuracy of

the information returns provided to respondent.     We do not find

petitioner’s assertion sufficient to constitute a “reasonable

dispute” as referred to in section 6201(d).     See White v.

Commissioner, T.C. Memo. 1997-459.      Thus, respondent’s income

determinations for all years in issue enjoy a presumption of

correctness, and consequently we sustain respondent’s income

determinations.

B.   Petitioner’s Business Expense Deductions for 2002-04

      Petitioner argues that respondent’s deficiency

determinations are incorrect because they do not take into

account mileage deductions and deductions for unreimbursed meal

expenses arising from petitioner’s work as a pilot vehicle escort

for Safe-Way and William J. Loosemore, Jr.     At trial petitioner

introduced a document he had prepared in connection with the

trial of these cases which indicated petitioner (1) drove 5,002

miles and worked 20 days in 2002, (2) drove 24,040 miles and

worked 85 days in 2003, and (3) drove 16,472 miles and worked 60

days in 2004.4    Petitioner asserts that he is entitled to a



      4
      The document states that “all numbers are approximate due
to the inability [of petitioner] to verify accuracy.”
                               - 7 -

deduction equal to the standard milage rate allowed by the

Internal Revenue Service (IRS) and a deduction equal to the IRS’

per diem allowance for meals for each day he drove his automobile

as a pilot vehicle escort.

     Deductions are a matter of legislative grace and are

allowable only as specifically provided by statute.    See INDOPCO,

Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Joseph v.

Commissioner, T.C. Memo. 2005-169.     Taxpayers bear the burden of

proving that they are entitled to any deductions claimed.     New

Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934); Singh v.

Commissioner, T.C. Memo. 2009-36.

     Because automobiles are “listed property” as defined in

section 280F(d)(4)(A), automobile expenses otherwise deductible

are not allowed unless the taxpayer meets strict substantiation

requirements.   See sec. 274(d); Larson v. Commissioner, T.C.

Memo. 2008-187.   Specifically, the taxpayer must substantiate the

claimed automobile expenses by adequate records or other

corroborating evidence showing the amount of the expense, the

time and place of the automobile’s use, and the business purpose

of its use.   See sec. 274(d); Sanford v. Commissioner, 50 T.C.

823, 827-828 (1968), affd. per curiam 412 F.2d 201 (2d Cir.

1969).

     To satisfy the adequate records requirement of section

274(d), a taxpayer must maintain records and documentary evidence
                               - 8 -

that in combination are sufficient to establish each element of

an expenditure or use.   Sec. 1.274-5T(c)(2), Temporary Income Tax

Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985).   Although a

contemporaneous log is not required, “corroborative evidence to

support a taxpayer’s reconstruction ‘of the elements * * * of the

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

elevate such statement’ to the level of credibility of a

contemporaneous record.”   Larson v. Commissioner, supra (quoting

section 1.274-5T(c)(1), Temporary Income Tax Regs., 50 Fed. Reg.

46016 (Nov. 6, 1985)).

     In the absence of adequate records to substantiate each

element of an expense, a taxpayer may alternatively establish an

element by “his own statement, whether written or oral,

containing specific information in detail as to such element”,

and by “other corroborative evidence sufficient to establish such

element.”   Sec. 1.274-5T(c)(3), Temporary Income Tax Regs., 50

Fed. Reg. 46014 (Nov. 6, 1985).

     The Court may not approximate a taxpayer’s mileage claim.

Section 1.274-5T(a), Temporary Income Tax Regs., 50 Fed. Reg.

46014 (Nov. 6, 1985), states that the substantiation requirements

of section 274(d) supersede the doctrine founded in Cohan v.

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

otherwise permits the Court to approximate a taxpayer’s claim to

an allowable expense in cases where the evidence indicates a
                               - 9 -

taxpayer incurred deductible travel expenses but the exact amount

could not be determined.   Moreover, section 1.274-5T(a),

Temporary Income Tax Regs., supra, states that section 274(d)

“contemplates that no deduction or credit shall be allowed a

taxpayer on the basis of such approximations or unsupported

testimony of the taxpayer.”

     Before trial petitioner did not provide respondent with any

documents, records, or information to substantiate any itemized

deductions and/or business-related expenses to which he may be

entitled for 2002-05.   And at trial petitioner admitted that the

document he introduced contained approximate mileage for 2002-04

and was not a contemporaneous log of his Safe-Way mileage but

rather was generated in preparation for trial.   We found this

document lacking in probative value and credibility.

     By way of contrast, petitioner’s employer, Safe-Way,

provided contemporaneous records relating to petitioner’s

employment as a pilot vehicle driver during 2002-04.   These

records were created and maintained by Safe-Way in its regular

course of business.

     We judge Safe-Way’s records to be of sufficient probative

value to satisfy the substantiation requirements of section

274(d).   Therefore, using these records, we hold that petitioner

is entitled to a deduction for mileage as follows:
                               - 10 -

                      Year                   Miles

                      2002                   2,206
                      2003                  11,702
                      2004                   7,937

     Section 1.274-5(g)(1), Income Tax Regs., provides that the

Commissioner may prescribe (in pronouncements of general

applicability) a standard mileage rate that a taxpayer may use to

determine a deduction with respect to the business use of a

passenger automobile.    Such rate is set forth in a revenue

procedure published by the IRS each year.     For 2002 the rate is

36.5 cents per mile;5 for 2003 the rate is 36 cents per mile;6

and for 2004 the rate is 37.5 cents per mile.7

     Petitioner also claims entitlement to a deduction for

unreimbursed meal expenses incurred while driving his automobile

as a pilot vehicle escort.    Generally, in order to claim a

deduction under section 162(a)(2), a taxpayer must substantiate

the amount of the expense claimed.      See sec. 1.162-17, Income Tax

Regs.    However, section 1.274-5(g)(1), Income Tax Regs., provides

that the Commissioner may prescribe (in pronouncements of general

applicability) rules under which standard allowances for certain

expenses will, if such expenses are in accord with reasonable

business practice, be regarded as equivalent to substantiation by


     5
        Rev. Proc. 2001-54, sec. 5.01, 2001-2 C.B. 530, 531.
     6
        Rev. Proc. 2002-61, sec. 5.01, 2002-2 C.B. 616, 618.
     7
        Rev. Proc. 2003-76, sec. 5.01, 2003-2 C.B. 924, 925.
                                - 11 -

adequate records or other sufficient evidence.    Section 1.274-

5(g)(2)(ii), Income Tax Regs., 50 Fed. Reg. 46014, 46016 (Nov. 6,

1985), provides that such an allowance includes per diem expenses

(e.g., meals).

     The Commissioner yearly publishes revenue procedures that

provide amounts that individuals may use, in lieu of actual

expenses, to compute the amount allowable as a deduction for

ordinary and necessary business meal and incidental expenses paid

or incurred for travel away from home.    These amounts are deemed

substantiated for purposes of section 1.274-5T(b)(2) and (c),

Temporary Income Tax Regs., 50 Fed. Reg. 46014, 46016 (Nov. 6,

1985), provided the individual substantiates the elements of

time, place, and business purpose of the travel expense.8    Thus,

pursuant to relevant revenue procedures, petitioner must still

substantiate the time, place, and business purpose for his

claimed away-from-home expenses.    Although petitioner listed the

approximate number of days he worked for Safe-Way on the document

he presented at trial, he did not provide any information

regarding the time, place or business purpose of the meals for

which he claims an allowance.    Accordingly, petitioner has not




     8
      The revenue procedures in effect for the years at issue
are: Rev. Proc. 2001-47, 2001-2 C.B. 332; Rev. Proc. 2002-63,
2002-2 C.B. 691; Rev. Proc. 2003-80, 2003-2 C.B. 1037; Rev. Proc.
2004-60, 2004-2 C.B. 682.
                                - 12 -

substantiated his meal expenses, and thus he is not entitled to a

deduction for them.9

      In sum, petitioner may deduct his mileage expenses for 2002-

04, as determined supra.     In all other respects, respondent’s

income tax determinations for the years at issue are sustained.

C.   Additions to Tax Under Sections 6651(a)(1) and (2) and
     6654(a)

      Respondent determined additions to tax under sections

6651(a)(1) and (2) and 6654(a) for 2002-05.    Section 6651(a)(1)

imposes an addition to tax for failure to file an income tax

return by the time prescribed by law unless the taxpayer proves

that such failure is due to reasonable cause and not willful

neglect.   See United States v. Boyle, 469 U.S. 241, 245 (1985).

Petitioner did not file returns for 2002-05 by the time

prescribed by law.     When asked at trial whether he had reasonable

cause for not filing, petitioner replied:    “Not within the

confines of this court, no.”    We thus sustain respondent’s

imposition of the addition to tax under section 6651(a)(1).




      9
      Petitioner stated that “just about all” of his trips for
Safe-Way were 1-day trips. It is well established that in order
to qualify for a meal expense deduction one must be away from
home for a period normally requiring sleep or rest. Day trips do
not qualify for the sec. 162(a)(2) deduction. See United States
v. Correll, 389 U.S. 299 (1967); Bissonnette v. Commissioner, 127
T.C. 124, 132-133 (2006). Thus even had petitioner substantiated
his meal expenses, he would not be entitled to a deduction as
away-from-home expenses.
                               - 13 -

     Section 6651(a)(2) imposes an addition to tax for failure to

pay the amount of tax shown on any return unless petitioner

proves that the failure is due to reasonable clause and not due

to willful neglect.   Section 6651(a)(2) applies only in the case

of an amount of tax shown on a return.    Burr v. Commissioner,

T.C. Memo. 2002-69, affd. 56 Fed. Appx. 150 (4th Cir. 2003).

Pursuant to section 6651(g)(2), a substitute for return prepared

under section 6020(b) is treated as a return filed by the

taxpayer for returns due after July 30, 1996 (determined without

regard to extensions).

     Respondent prepared substitutes for returns for petitioner

for 2002-05.   Petitioner did not pay the calculated liabilities

by the time prescribed by law; and when asked at the trial if he

had reasonable cause for not paying, petitioner replied:    “Same

answer, your Honor [as he gave to the question about his failure

to file].”   When asked why should he not have to pay the tax and

penalties, petitioner replied:   “I’m trying to avoid frivolous

arguments, your Honor.   I’d like to take the Fifth Amendment for

something like that.”    We thus sustain respondent’s imposition of

the addition to tax under section 6651(a)(2).

     Section 6654(a) imposes an addition to tax on individual

taxpayers who underpay their estimated income tax.   Respondent

asserts that petitioner is liable for the addition to tax for

2002-05.   A taxpayer has an obligation to pay estimated tax for a
                                - 14 -

particular year if he has a “required annual payment” for that

year.    Sec. 6654(d).   A “required annual payment” is generally

equal to the lesser of (1) 90 percent of the tax shown on the

individual’s return for that year (or if no return is filed, 90

percent of his or her tax for the year), or (2) if the individual

filed a return for the immediately preceding taxable year, 100

percent of the tax shown on that return.     Sec. 6654(d)(1);

Wheeler v. Commissioner, 127 T.C. 200, 210-212 (2006), affd. 521

F.3d 1289 (10th Cir. 2008); Brennan v. Commissioner, T.C. Memo.

2009-77.     To show a required annual payment for 2002, respondent

must show proof of petitioner’s failure to file a return for

2001.     See Wheeler v. Commissioner, supra at 210-212; Brennan v.

Commissioner, supra.

        To satisfy his burden of production under section 7491(c),

respondent introduced evidence showing that petitioner was

required to file Federal income tax returns for 2002-05, that he

failed to file returns, and that after taking into account income

tax withheld from petitioner’s salary, he did not make any other

tax payments in the years at issue.      Respondent also established

that petitioner failed to file a return for 2001.     We therefore

hold that respondent has met his burden of production with regard

to the additions to tax under section 6654(a).

        Petitioner offered no evidence to refute respondent’s

evidence.     Nor has petitioner established a credible defense to
                                - 15 -

respondent’s determination that petitioner is liable for the

section 6654 addition to tax.    Consequently, respondent’s

imposition of the addition to tax under section 6654(a) for 2002-

05 is sustained.

     All of petitioner’s arguments have been considered.      To the

extent not discussed herein, we find them to be groundless and/or

without merit.

     To reflect the foregoing,

                                          Decisions will be entered

                                     under Rule 155.
