                  T.C. Summary Opinion 2001-50



                     UNITED STATES TAX COURT



                   VINCENT EKEH, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11921-99S.                Filed April 5, 2001.



     Vincent Ekeh, pro se.

     Dennis R. Onnen, for respondent.



     DINAN, Special Trial Judge:    This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.   The decision to be

entered is not reviewable by any other court, and this opinion

should not be cited as authority.   Unless otherwise indicated,

subsequent section references are to the Internal Revenue Code in
                               - 2 -

effect for the years in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.

     Respondent determined deficiencies in petitioner’s Federal

income taxes of $2,664 and $818 and accuracy-related penalties of

$532.80 and $163.60 for the taxable years 1995 and 1996.

     After a concession by respondent,1 the issues for decision

are with respect to each year in issue:    (1) Whether petitioner

is entitled to a charitable contribution deduction; (2) whether

petitioner is entitled to miscellaneous itemized deductions for

employee business expenses; and (3) whether petitioner is liable

for the accuracy-related penalty under section 6662(a) for

negligence or disregard of rules or regulations.

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

The stipulations of fact and the attached exhibits are

incorporated herein by this reference.    Petitioner resided in

Kansas City, Kansas, on the date the petition was filed in this

case.

     The first issue for decision is whether petitioner is

entitled to a charitable contribution deduction for each year in

issue.   Petitioner claimed deductions for charitable

contributions in the amounts of $5,396.45 for 1995 and $2,694.45



     1
      Respondent concedes that if petitioner is allowed only the
standard deduction in lieu of the itemized deductions claimed in
1995 (as determined by respondent), he is not required to include
in income a $552.52 tax refund as reported on his 1996 return.
                               - 3 -

for 1996.   In the statutory notices of deficiency, respondent

disallowed the charitable deductions in full because petitioner

had not established that the amounts shown were paid during the

respective tax years.

     A taxpayer is required to maintain records sufficient to

establish the amount of his deductions.    See sec. 6001; sec.

1.6001-1(a) and (e), Income Tax Regs.     In the event that a

taxpayer establishes that a deductible expense has been paid but

is unable to substantiate the precise amount, we generally may

estimate the amount of the deductible expense, bearing heavily

against the taxpayer whose inexactitude in substantiating the

amount of the expense is of his own making.    See Cohan v.

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

estimate a deductible expense only where the taxpayer presents

evidence sufficient to provide some basis upon which an estimate

may be made.   See Vanicek v. Commissioner, 85 T.C. 731, 742-743

(1985).   Certain expenses related to travel, entertainment,

gifts, and listed property (as defined in section 280F(d)(4)) are

additionally subject to the strict substantiation requirements of

section 274(d).   See sec. 274(d); sec. 1.274-5T(b), Temporary

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

     Section 170(a) allows a deduction for charitable

contributions made during the taxable year to certain types of

organizations if the deductions are verified under regulations
                                - 4 -

prescribed by the Secretary.    Without written records, a

deduction for charitable contributions generally is not allowed.

See sec. 1.170A-13, Income Tax Regs.    In certain circumstances,

however, we have applied Cohan v. Commissioner, supra, to allow a

deduction even without written records where a taxpayer provides

a sufficient basis to estimate the amount of the contributions,

such as showing regular church attendance and regular cash

contributions thereto.    See, e.g., Fontanilla v. Commissioner,

T.C. Memo. 1999-156; Meeks v. Commissioner, T.C. Memo. 1998-109,

affd. 208 F.3d 221 (9th Cir. 2000); Drake v. Commissioner, T.C.

Memo. 1997-487.

     Petitioner presented no evidence corroborating the alleged

contributions.    He testified that the relevant records were in

the possession of his former spouse, but he did not explain why

he was unable to obtain the records for trial.    He attempted to

provide an estimate of a portion of these expenses by multiplying

an approximate number of times he attended Mass per year by his

average weekly contribution, but he was uncertain of even this

estimate.   Because he failed to establish any regularity in

occurrence or extent of the donations from which we could

estimate an amount, or to present any reliable evidence

indicating he actually made these or other contributions, we

uphold respondent’s disallowance.
                               - 5 -

     The second issue for decision is whether petitioner is

entitled to miscellaneous itemized deductions for employee

business expenses in each of the years in issue.   Petitioner

claimed miscellaneous itemized deductions for employee business

expenses in the amounts of $14,875.54 for 1995 and $5,974.66 for

1996.   Respondent disallowed the miscellaneous itemized

deductions in full because petitioner had not established both

that the expenses shown were paid or incurred during the taxable

year and that they were ordinary and necessary to his business.

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

necessary expenses paid or incurred during the taxable year in

carrying on a trade or business.    A taxpayer may be in the trade

or business of being an employee.   See Primuth v. Commissioner,

54 T.C. 374, 377-378 (1970).   In order for a taxpayer to be

engaged in a trade or business, “the taxpayer must be involved in

the activity with continuity and regularity”.    Commissioner v.

Groetzinger, 480 U.S. 23, 35 (1987).   An ordinary expense is one

that relates to a transaction “of common or frequent occurrence

in the type of business involved”, Deputy v. du Pont, 308 U.S.

488, 495 (1940), and a necessary expense is one that is

“appropriate and helpful” for “the development of the

petitioner’s business,” Welch v. Helvering, 290 U.S. 111, 113

(1933).   Finally, job search expenses are deductible under

section 162(a) to the extent they are incurred in searching for
                                 - 6 -

new employment in the employee’s same trade or business.       See

Primuth v. Commissioner, supra.     If the employee is seeking a job

in a new trade or business, however, the expenses are not

deductible under section 162(a).    See Frank v. Commissioner, 20

T.C. 511, 513-514 (1953).

     Petitioner’s primary source of income during the years in

issue, not including income of his spouse, was from West

Telemarketing in Omaha, Nebraska.    The following sources and

amounts of income were reported on his returns:

                                            1995        1996

     West Telemarketing                  $7,518.69   $23,405.48
     Sitel Corporation                    2,156.60       -0-
     Westin Hotels and Resorts              281.13       -0-
     Sharp Personnel Services               681.50       -0-
     Nesco Service Company                  883.88       -0-
                                         11,521.80    23,405.48

     Petitioner failed to establish how expenses he deducted on

his returns were ordinary and necessary expenses in carrying on

his employment at West Telemarketing or at one of the other

companies by which he was employed.      Nor did petitioner establish

the existence of any other business for which the expenses could

have been ordinary and necessary.    Petitioner on occasion paid

“practicing fees” to the Supreme Court of Nigeria; he testified

that he maintained a legal practice in Nigeria, and that the

travel expenses he incurred were primarily in connection with

this practice.   He also testified that a portion of the expenses

was related to (1) his contacting businesses in order to
                               - 7 -

ascertain their needs regarding recruitment, possibly in

connection with an immigration visa service he contemplated

providing, and (2) his contacting a bank to ascertain its

interest in establishing a money wire transfer service to

Nigeria.   We find this brief testimony to be insufficient to

establish the existence of any continuous and regular activity

which constituted a trade or business.   See sec. 162(a);

Groetzinger v. Commissioner, supra.

     On petitioner’s returns, he indicated that a portion of the

employee business expenses was job search expenses.   The nature

of the expenses discussed above, however, does not give rise to

job search expense deductions because petitioner was not

searching for a job within the same trade or business.   See Frank

v. Commissioner, supra.

     We uphold respondent’s disallowance of petitioner’s claimed

itemized deductions for employee business expenses.

     The final issue for decision is whether petitioner is liable

for the accuracy-related penalty under section 6662(a) for

negligence or disregard of rules or regulations for each of the

years in issue.   Respondent determined that petitioner was liable

for the penalty for an underpayment equal to the total amount of

the deficiency in each year in issue.

     Section 6662(a) imposes a 20-percent penalty on the portion

of an underpayment attributable to any one of various factors,
                               - 8 -

one of which is negligence or disregard of rules or regulations.

See sec. 6662(b)(1).   “Negligence” includes any failure to make a

reasonable attempt to comply with the provisions of the Internal

Revenue Code, including any failure to keep adequate books and

records or to substantiate items properly.    See sec. 6662(c);

sec. 1.6662-3(b)(1), Income Tax Regs.    Section 6664(c)(1)

provides that the penalty under section 6662(a) shall not apply

to any portion of an underpayment if it is shown that there was

reasonable cause for the taxpayer’s position and that the

taxpayer acted in good faith with respect to that portion.     The

determination of whether a taxpayer acted with reasonable cause

and in good faith is made on a case-by-case basis, taking into

account all the pertinent facts and circumstances.    See sec.

1.6664-4(b)(1), Income Tax Regs.    The most important factor is

the extent of the taxpayer’s effort to assess his proper tax

liability for the year.   See id.

     Petitioner’s purported substantiation was meager.    He

presented receipts for various expenses which were not self-

evidently employee business expenses and which were not

adequately explained as such at trial.    The receipts appear to

have been haphazardly assembled, and those receipts which were

dated in the years in issue (with legible dollar amounts) are far

from equal the amount of expenses claimed by petitioner on his

returns.   Finally, many of the receipts were for travel expenses
                               - 9 -

and do not meet the strict substantiation requirements of section

274(d).   We hold that the record supports respondent’s

determination of negligence in this case.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing and the concession by respondent,

                                       Decision will be entered

                               under Rule 155.
