                  T.C. Summary Opinion 2009-175



                     UNITED STATES TAX COURT



                  MOLLIE E. SMITH, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7853-07S.                Filed November 24, 2009.



     Mollie E. Smith, pro se.

     Nancy W. Hale, for respondent.



     CARLUZZO, Special Trial Judge:   This case was heard

pursuant to the provisions of section 7463.1   Pursuant to section

7463(b), the decision to be entered is not reviewable by any



     1
      Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended, in effect for the year
at issue. Rule references are to the Tax Court Rules of Practice
and Procedure.
                               - 2 -

other court, and this opinion shall not be treated as precedent

for any other case.

     In a notice of deficiency dated February 20, 2007,2

respondent determined a deficiency in, and additions to,

petitioner’s 2003 Federal income tax as follows:

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

  $22,488     $2,974.27          $2,115.04          $314.51

     After concessions, the issues for decision are:    (1) Whether

petitioner is entitled to various trade or business expense

deductions; (2) whether petitioner is entitled to a home mortgage

interest deduction; and (3) whether petitioner is liable for a

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

                            Background

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

the time the petition was filed, petitioner resided in Florida.

     At all times relevant, petitioner lived with her mother in

her mother’s house.   Although nothing in the record suggests that

petitioner had any legal obligation to do so, she typically paid

her mother’s real estate taxes and utility bills.




     2
      In a separate notice of deficiency, also dated Feb. 20,
2007, respondent determined a deficiency in and additions to
petitioner’s 2002 Federal income tax. The deficiency and
additions to tax for 2002 are placed in dispute in the petition,
but all issues for that year have been resolved by the parties.
                               - 3 -

     During 2003 petitioner provided services to five health care

providers (petitioner’s clients).   Some of her clients treated

her as an employee; others considered her an independent

contractor.

     During 2003 petitioner’s clients were located throughout the

United States.   She routinely traveled by car between her

residence in Florida and the locations of her clients.     Her

business travels routinely required that she incur expenses for

transportation and meals and lodging, some of which were paid or

reimbursed by her clients.

     Respondent’s records indicate that petitioner’s 2003 Federal

income tax return, if submitted, was not received.   Consequently,

relying upon information returns received from petitioner’s

clients, respondent prepared what is commonly referred to as a

“section 6020(b) return” for petitioner for 2003.3   The

adjustments to income and the determination made in the above-

referenced notice of deficiency are consistent with the items

shown on the section 6020(b) return.

                             Discussion

     Petitioner now agrees that she earned and received the

income attributed to her in the notice of deficiency.      According



     3
      The income tax liability shown on the sec. 6020(b) return
takes into account a personal exemption deduction and the
standard deduction. That return also allows credit for $9,269 of
income tax withholdings.
                               - 4 -

to petitioner, she reported that income on a Federal income tax

return that she prepared and timely “efiled” using a popular

computer-based, income tax return preparation program.

Petitioner claims that the efiled return shows deductions for

mortgage interest and business travel expenses incurred in

connection with providing services to her clients.4   As noted,

respondent’s records do not show receipt of any 2003 return from

petitioner, and petitioner did not produce a copy of any such

return at trial.   Nevertheless, respondent now concedes the

section 6651(a)(1) addition to tax, although without agreeing

that petitioner’s 2003 return was submitted as claimed.

I.   Deductions

      We begin by noting, as we have observed in countless

opinions, that deductions are a matter of legislative grace, and

the taxpayer bears the burden of proof to establish entitlement

to any claimed deduction.5   Rule 142(a); INDOPCO, Inc. v.

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

Commissioner, 292 U.S. 435, 440 (1934).   This burden requires the



      4
      Because some of her clients treated her as an employee and
others treated her as an independent contractor some of the
deductions, if otherwise allowable, would be properly claimed as
miscellaneous itemized deductions on a Schedule A, Itemized
Deductions, and some on a Schedule C, Profit or Loss From
Business. The record hardly allows for any such technical
precision.
      5
      Petitioner does not claim that the provisions of sec.
7491(a) are applicable, and we proceed as though they are not.
                               - 5 -

taxpayer to substantiate deductions claimed by keeping and

producing adequate records that enable the Commissioner to

determine the taxpayer’s correct tax liability.   Sec. 6001;

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

540 F.2d 821 (5th Cir. 1976); Meneguzzo v. Commissioner, 43 T.C.

824, 831-832 (1965).   A taxpayer claiming a deduction on a

Federal income tax return must demonstrate that the deduction is

allowable pursuant to some statutory provision and must further

substantiate that the expense to which the deduction relates has

been paid or incurred.   See sec. 6001; Hradesky v. Commissioner,

supra; sec. 1.6001-1(a), Income Tax Regs.

     Having set out these fundamental principles, we turn our

attention first to the deductions in dispute.

     A. Business Travel Expense Deductions

     According to petitioner, her 2003 efiled return shows a

deduction or deductions for business traveling expenses.   As

noted, a copy of that return has not been made part of the

record, and petitioner has not actually quantified the amount of

deduction or deductions to which she claims entitlement.   She

did, however, produce various receipts for lodging and meals, and

more or less tied those receipts to specific business trips.     She

drove to the locations of her clients, but if she maintained a

mileage log, it has not been made part of the record.
                               - 6 -

     Ordinarily, a taxpayer may not deduct personal expenses,

such as the costs of meals and lodging.   Sec. 262(a).   However,

if properly substantiated, traveling expenses, including meals

and lodging, incurred by a taxpayer during the taxable year while

traveling away from home in the pursuit of a trade or business

are deductible.   Secs. 162(a)(2), 274(d).

     If a taxpayer’s traveling expenses are reimbursed or

reimbursable, then the expenses are not a necessary expense to

the taxpayer and are therefore not deductible under section

162(a).   Podems v. Commissioner, 24 T.C. 21 (1955); Orvis v.

Commissioner, T.C. Memo. 1984-533, affd. 788 F.2d 1406 (9th Cir.

1986).

     Petitioner acknowledges that she was reimbursed for some

portion of the business travel expenses to which the deduction or

deductions relate, and she apparently understands that she is not

entitled to a deduction for reimbursed travel expenses.   See

Podems v. Commissioner, supra.   Because petitioner has not

established the extent to which she was reimbursed for the

business travel expenses she incurred, we are unable to determine

what, if any, expenses were left unreimbursed.   Therefore,

petitioner fails to meet her burden of establishing entitlement

to any deduction or deductions for travel expenses for 2003.
                                - 7 -

     B. Home Mortgage Interest Deduction

     In general, a taxpayer is entitled to a deduction for

qualified residence interest (referred to on the Schedule A as

“Home mortgage interest”).   Sec. 163(h)(2)(D).    Because the

qualified residence interest deduction petitioner now claims does

not exceed the standard deduction applicable to her filing

status, see sec. 63, we need not consider her entitlement to this

deduction.

II. Section 6651(a)(2) Addition to Tax

     Respondent imposed a section 6651(a)(2) addition to tax for

2003.    Respondent bears the burden of production with respect to

the addition to tax here in dispute.     See sec. 7491(c).

     In general, section 6651(a)(2) provides for an addition to

tax in the case of the failure to pay an amount of tax shown on a

return unless the taxpayer can establish that the failure is due

to reasonable cause and not due to willful neglect.6

     Under section 6651(g)(2), a return the Commissioner

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

the taxpayer for purposes of determining the amount of the

addition under section 6651(a)(2).      For these purposes, a section

6020(b) return “must be subscribed, it must contain sufficient




     6
      The sec. 6651(a)(2) addition to tax accrues at the rate of
0.5 percent per month until the maximum 25 percent is reached.
                               - 8 -

information from which to compute the taxpayer’s tax liability,

and the return form and any attachments must purport to be a

‘return’.”   Spurlock v. Commissioner, T.C. Memo. 2003-124; see

also Cabirac v. Commissioner, 120 T.C. 163, 170-171 (2003).      The

section 6020(b) return respondent prepared constitutes

petitioner’s 2003 return for purposes of section 6651(a)(2).

     To prove reasonable cause for a failure to pay the tax, the

taxpayer must show that he or she exercised ordinary business

care and prudence in providing for payment of the tax and

nevertheless was either unable to pay the tax or would suffer

undue hardship if he or she paid the tax on the due date.   Sec.

301.6651-1(c)(1), Proced. & Admin. Regs.

     According to petitioner, her 2003 return was timely filed

and shows a refund due, rather than unpaid tax.   Her explanation

of the circumstances surrounding the preparation of her 2003

return is, at best, vague.   She did not produce a copy of the

2003 return she claims to have prepared, and the summary of the

electronically prepared return introduced into evidence says

little regarding whether the return was electronically

transmitted to respondent or otherwise manually filed.

Furthermore, she does not suggest that she was unable to pay the

tax or that she would have suffered undue hardship if the tax had
                                 - 9 -

been paid on the due date.   Respondent’s imposition of the

section 6651(a)(2) addition to tax for 2003 is sustained.

     To reflect the foregoing,


                                         Decision will be entered

                                 under Rule 155.
