                       T.C. Memo. 2003-286



                     UNITED STATES TAX COURT



                  DAVID J. BOYD, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 4794-00.                Filed October 3, 2003.


     David J. Boyd, pro se.

     Louis H. Hill, for respondent.



                       MEMORANDUM OPINION


     COUVILLION, Special Trial Judge:    Respondent determined a

deficiency of $4,556 in petitioner’s Federal income tax for the

year 1995 and an addition to tax of $801.68 under section

6651(a)(1).

     The issues for decision are:   (1) Whether petitioner is

entitled to claim itemized deductions on Schedule A, Itemized

Deductions, for 1995; (2) whether petitioner is entitled to
                                - 2 -


deduct certain trade or business expenses for 1995 on Schedule C,

Profit or Loss From Business, in excess of amounts allowed by

respondent; and (3) whether petitioner is liable for the addition

to tax under section 6651(a)(1) for failing to file his Federal

income tax return for 1995 timely.1     Petitioner’s liability for

additional self-employment tax is a computational issue dependent

on the Court’s holding on the issues described.

     Some of the facts were stipulated, and those facts, with the

annexed exhibits, are so found and are incorporated herein by

reference.    At the time the petition was filed, petitioner's

legal residence was Cincinnati, Ohio.     Petitioner was married

during the year at issue.

     Petitioner is an attorney engaged in the practice of law in

Cincinnati.    He began his law practice as a sole proprietorship.

In October 1994, he incorporated his practice in Ohio under that

State’s legal professional association statute.     However, no

valid corporate return was filed on behalf of petitioner’s

professional corporation for 1995.2

     1
           Unless otherwise indicated, all section references are
to the Internal Revenue Code in effect for the year at issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
     2
          Petitioner mailed a Form 1120, U.S. Corporation Income
Tax Return, to the Internal Revenue Service on behalf of his
professional corporation for 1995. That return reflected no
taxes due; however, the return was returned to petitioner as
being incomplete. No further attempt was made on behalf of the
                                                   (continued...)
                                - 3 -


     Petitioner’s law practice involved litigation in which he

regularly made court appearances throughout the State of Ohio.

He had an American Express card that he used exclusively for

business purposes.    His law practice expenses, such as meals,

hotel, and entertainment expenses, were charged to the credit

card.    Petitioner was provided monthly statements and an annual

summary of expenses charged to the card.    Petitioner did not

offer into evidence any American Express statements or the 1995

annual summary.

     Petitioner and his wife owned two family vehicles.

Petitioner used both of these vehicles in his law practice and

incurred vehicle expenses going to court and keeping client

appointments in different parts of Ohio.    Other vehicle expenses

were incurred in commuting to his office and paying parking

charges.    At trial, petitioner claimed a total of $5,873 in car

and truck expenses, which he derived by taking a “reasonable

proportionate share” of his lease payments, auto repairs, oil

changes, tuneups, tires, and other vehicle expenses from his

check records.    He also claimed $975 in parking expenses.



     2
      (...continued)
professional corporation to perfect the Form 1120 for 1995.
Respondent has not raised as an issue that the law practice
activity conducted by petitioner was an activity of the
professional corporation. This case, therefore, is based upon
petitioner’s activity in the practice of law rather than that of
a professional corporation.
                                - 4 -


Petitioner did not keep a log in the use of his vehicles, nor did

he produce any other contemporaneous record of his car and truck

expenses, the business use of his vehicles, or parking expenses.

     Petitioner also claimed expenses in taking clients out for

meals.    He did not keep contemporaneously prepared records in

connection with these expenses.    At trial, he claimed $2,694.76

for meals expenses, which he determined using his annual

statement from American Express.    As previously noted, the credit

card statement was not produced at trial.

     Petitioner’s claimed expenses also included expenses related

to playing golf with clients.    He maintained a membership at the

Cincinnati Athletic Club, for which he paid dues.    Petitioner did

not keep a record of these client entertainment expenses.

     Petitioner had a professional relationship with a local

union, the United Food and Commercial Workers Union (UFCW), Local

1099.    Incident to this relationship, petitioner was allowed

membership in the union in order to obtain favorable health

insurance coverage for himself and his wife.    The union dues were

$25 per month, which amounted to $300 a year.    Petitioner

substantiated only $275 of union dues paid to UFCW Local 1099

during 1995.

     Petitioner claimed, as business expenses, charitable

contributions to various organizations that solicited him at his

law office.    He stated that he made the contributions “in my
                                - 5 -


capacity as an attorney.”   At trial, petitioner claimed $2,294 in

such contributions but provided no documentation to support

payment of such amount.

     Petitioner filed his 1995 Federal income tax return

(original return) with the Internal Revenue Service on January

21, 1997.    As further explained below, he later filed an amended

return.   Petitioner claimed a filing status of married filing

separately to avoid collection activities against his wife.

Petitioner’s wife filed separately for 1995 and claimed the

standard deduction.   Nothing in the record indicates that

petitioner was separated or living apart from his wife.

     On his original return, petitioner reported no wage income

on line 7 of Form 1040.   He reported trade or business income on

line 12 in the amount of $24,392.92.    He claimed the standard

deduction, reported $3,446.61 in self-employment tax, and claimed

one-half of the self-employment tax, or $1,723.51, as a

deduction.   On the attached Schedule C, petitioner reported

$72,520.03 in gross receipts and claimed $48,127.11 in expenses

from his law practice.    These Schedule C expenses included $5,873

in car and truck expenses, $1,892.52 in travel expenses,

$2,694.76 as the deductible portion of meals and entertainment

expenses, and $8,215.61 in other expenses.    The “other expenses”

included $1,298.83 for memberships, $975 for parking, and $2,294

for charitable contributions.
                               - 6 -


     Petitioner filed an amended Federal income tax return for

1995 on September 15, 1997.   On this amended return, petitioner

reported $22,904.98 in salary and wage income.   The amended

return included a Schedule A, on which petitioner claimed an

itemized deduction of $4,639.90 for taxes and interest.   The

amended return does not include a Schedule C, nor does it include

any Forms W-2, Wage and Tax Statement, with respect to the

$22,904.98 reported as salary income.   On page 1 of the amended

return, line 12 (for Schedule C trade or business income) is

blank; yet, line 47 of the return (for other taxes) includes

$3,236 for self-employment taxes, and on line 27 (adjustments to

income) a deduction of $1,618.37 is claimed for one-half of the

self-employment taxes.   There is no statement attached to the

amended return explaining the reasons for the amended return and

how, in particular, the amended return related to the Schedule C

activity reported on petitioner’s original return.   Petitioner’s

testimony was not clear as to why he filed the amended return.

The income reported on the amended return appears to be the same

income reported on Schedule C, although, admittedly, the numbers

do not match.

     In the notice of deficiency, respondent disallowed

petitioner’s itemized deductions on the basis that such

deductions, relating to the trade or business activity of

practicing law, were properly reportable on Schedule C rather
                                - 7 -


than Schedule A.    Petitioner was allowed the standard deduction

under section 63(c) instead of the claimed itemized deductions.

Petitioner’s Schedule C expenses as reported on the original

return were adjusted to allow $50 for meals, $1,500 for car and

truck expenses (calculated by multiplying the standard mileage

rate by 5,000 miles), $100 for travel expenses, $756 for

memberships, and $500 for parking.      Respondent disallowed all of

petitioner’s charitable contributions.     The remainder of

petitioner’s Schedule C expenses was not adjusted.     Respondent

determined $1,713 for self-employment tax and allowed a

corresponding deduction for one-half of that tax.     Respondent

also determined the addition to tax under section 6651(a)(1).

       Deductions are a matter of legislative grace, and the

taxpayer bears the burden of proving entitlement to any

deductions claimed.    Rule 142(a); INDOPCO, Inc. v. Commissioner,

503 U.S. 79, 84 (1992).    The taxpayer is required to identify

each deduction available and show that all requirements have been

met.    New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440

(1934).    It is also the taxpayer’s responsibility to maintain

records sufficient to enable the Commissioner to determine the

correct tax liability.    Sec. 6001; sec. 1.6001-1(a), Income Tax

Regs.; Higbee v. Commissioner, 116 T.C. 438 (2001).      The taxpayer

must substantiate both the amount and purpose of claimed

deductions.    Higbee v. Commissioner, supra.    Moreover, the burden
                                  - 8 -


of proof as to the deficiency has not shifted to respondent in

this case.3

     The first issue is whether petitioner is entitled to claim

itemized deductions on Schedule A.        Respondent contends that

petitioner is not entitled to itemize deductions because his

wife, who filed separately for 1995 prior to petitioner, did not

elect to itemize.   Sec. 63(e).    Respondent is sustained on this

point.   Under section 63(e)(1), itemization is only allowed when

the taxpayer makes an election; petitioner did not elect to

itemize on his original individual return.        Moreover, a change of

election shall not be allowed unless the taxpayer’s spouse elects

consistent treatment and consents in writing to the assessment of

any deficiency arising from the change.        Sec. 63(e)(3); sec.

1.63-1, Income Tax Regs.   Petitioner’s spouse did not elect to

itemize deductions on her original return, nor did she consent to

itemization when petitioner amended his return.        Therefore,

petitioner is not entitled to claim deductions on Schedule A.


     3
          Sec. 7491(a), in certain instances, places the burden
of proof on respondent with respect to examination of returns
commencing after July 22, 1998. The examination of petitioner’s
return may have commenced after July 22, 1998. However, for the
burden to be placed on the Commissioner, the taxpayer must comply
with the substantiation and record keeping requirements of the
Internal Revenue Code. Sec. 7491(a)(2)(A) and (B). In addition,
sec. 7491(a) requires that the taxpayer cooperate with reasonable
requests by the Commissioner for “witnesses, information,
documents, meetings, and interviews”. Sec. 7491(a)(2)(B). On
this record, the burden has not shifted to respondent under sec.
7491(a). Higbee v. Commissioner, 116 T.C. 438 (2001).
                               - 9 -


Any expenses related to the law practice must be claimed on

Schedule C.

     The Court rejects petitioner’s argument that section 63

violates his due process and equal protection rights.   Generally,

where no fundamental rights are threatened, statutory

classifications are valid if they bear a rational relation to a

legitimate governmental purpose.   Regan v. Taxation With

Representation, 461 U.S. 540, 547 (1983).   Particularly in the

area of family taxation, Congress must be accorded wide latitude.

Druker v. Commissioner, 697 F.2d 46, 50-51 (2d Cir. 1982), affg.

in part and revg. in part 77 T.C. 867 (1981).   Here, no

fundamental right of petitioner’s is at stake, and petitioner has

not overcome the strong presumption of constitutionality afforded

tax legislation.   Regan v. Taxation With Representation, supra at

547; Nammack v. Commissioner, 56 T.C. 1379, 1385 (1971), affd.

per curiam 459 F.2d 1045 (2d Cir. 1972); Black v. Commissioner,

69 T.C. 505, 507-508 (1977).   Further, “perfect equality or

absolute logical consistency between persons subject to the

Internal Revenue Code * * * [is not] a constitutional sine qua

non”.   Barter v. United States, 550 F.2d 1239, 1240 (7th Cir.

1977) (per curiam) (statutory difference in tax rates for married

couples and single individuals does not violate Fifth Amendment

Due Process).   Petitioner’s constitutional argument is rejected.
                               - 10 -


     The second issue for decision is whether petitioner is

entitled to deduct certain expenses relating to his law practice

on Schedule C in excess of amounts allowed by respondent.     The

expenses claimed included car and truck expenses, meals, travel,

and miscellaneous expenses for memberships, parking, and

charitable contributions.4

     Section 162 allows a deduction for ordinary and necessary

expenses that are paid or incurred during the taxable year in

carrying on a trade of business.    Sec. 162(a); Deputy v. du Pont,

308 U.S. 488, 495 (1940).    In the case of travel expenses and

certain other expenses, such as entertainment, gifts, and

expenses relating to the use of listed properties, including

passenger automobiles under section 280F(d)(4)(A), section 274(d)

imposes stringent substantiation requirements to document

particularly the nature and amount of such expenses.    For such

expenses, substantiation of the amounts claimed by adequate

records or by other sufficient evidence corroborating the claimed



     4
          Because petitioner is not entitled to itemize
deductions on Schedule A, he cannot claim union dues as a
miscellaneous itemized deduction. Sec. 67(b); Butler v.
Commissioner, T.C. Memo. 1998-355. Moreover, the dues were not
ordinary and necessary business expenses. Petitioner, a lawyer,
"joined" a food and commercial workers' union for the personal
benefit of obtaining insurance. The record contains no evidence
of any benefit to the law practice of petitioner's union
"membership". Cf. Boyd Constr. Co. v. United States, 168 Ct. Cl.
579, 339 F.2d 620, 623 (1964) (union dues paid by a construction
company on behalf of an officer were deductible where evidence
showed there was a substantial benefit to the corporation).
                              - 11 -


expenses is required.   Sec. 274(d); sec. 1.274-5T(a)(l),

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

To meet the adequate records requirements of section 274(d), a

taxpayer "shall maintain an account book, diary, log, statement

of expense, trip sheets, or similar record * * * and documentary

evidence * * * which, in combination, are sufficient to establish

each element of an expenditure".   Sec. 1.274-5T(c)(2)(i),

Temporary Income Tax Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985).

The elements to be proven with respect to each traveling expense

are the amount, time, place, and business purpose of the travel.

Sec. 1.274-5T(b)(2), Temporary Income Tax Regs., 50 Fed. Reg.

46014 (Nov. 6, 1985).   These substantiation requirements are

designed to encourage taxpayers to maintain records, together

with documentary evidence substantiating each element of the

expense sought to be deducted.   Sec. l.274-5T(c)(l), Temporary

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

     Petitioner offered little or no evidence at trial with

respect to his parking, car and truck, travel, meals, and

entertainment expenses that would satisfy the requirements of

section 274(d) and the regulations cited.   Similarly, no evidence

of petitioner’s membership expenses was submitted.   While

petitioner claimed to have offered more evidence to respondent’s

agent during the audit, that evidence was conspicuously lacking

at trial, particularly considering petitioner’s profession as a

litigator.   To the extent petitioner used his vehicle to commute
                                  - 12 -


to and from work, such expenses are considered nondeductible

personal living expenses.    Sullivan v. Commissioner, 45 T.C. 217
(1965), affd. 368 F.2d 1007 (2d Cir. 1966); sec. 1.262-1(b)(5),

Income Tax Regs.    The parking, car and truck, travel, meals,

entertainment, and membership fee expenses were not properly

substantiated under the cited legal standards.      Petitioner,

therefore, is not entitled to deductions in excess of amounts

allowed by respondent.

       Section 170 allows a deduction for charitable contributions

during the taxable year, if verified as provided in the

regulations.    Sec. 170(a)(1).    Ordinarily, charitable

contributions are deducted on Schedule A, pursuant to section

170.    However, an individual may be entitled to claim a payment

to a charitable organization as a trade or business expense on

Schedule C, if no part of such payment is allowable under section

170.    Sec. 1.162-15(a), Income Tax Regs.    Generally, such a

payment may be claimed as a deduction on Schedule C to the extent

that it bears a direct relationship to the taxpayer’s trade or

business and is made with a reasonable expectation of a financial

return commensurate with the amount of the payment.         Cf. sec.

1.162-15(b), Income Tax Regs.

       Although petitioner did not substantiate his claimed

charitable contributions with written documentation, the Court is

satisfied that petitioner did make some payments qualifying as
                               - 13 -


deductible trade or business expenses during 1995.    Therefore,

under the Court's discretionary authority pursuant to Cohan v.

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

allows petitioner a deduction of $300 as a trade or business

expense on Schedule C for the year at issue.5

     The final issue is whether petitioner is liable for the

addition to tax under section 6651(a)(1) for failure to file a

timely return for the year 1995.    Section 6651(a)(1) provides for

an addition to tax if a tax return is not filed timely, unless

the taxpayer establishes that the failure to file did not result

from willful neglect and that the failure to file was due to

reasonable cause.    Willful neglect has been construed to mean a

conscious, intentional failure or reckless indifference.       United

States v. Boyle, 469 U.S. 241, 245-246 (1985).    Reasonable cause

generally requires a taxpayer to demonstrate that he or she

exercised ordinary business care or prudence.    Sec. 301.6651-

1(c)(1), Proced. & Admin. Regs.    It is undisputed that

petitioner’s original 1995 tax return was not filed until January

21, 1997.    The due date for filing that return was April 15,

1996.    Petitioner did not present satisfactory evidence of



     5
          Due to the Court’s conclusion that petitioner is
properly a Schedule C filer with respect to his law practice, he
is liable for additional self-employment tax. Respondent is
sustained on this issue, and the adjustment will be reflected in
the Rule 155 computation.
                              - 14 -


reasonable cause or the lack of willful neglect for the late

filing of his 1995 return.   Respondent is sustained on this

issue.



                                         Decision will be entered

                                    under Rule 155.
