T.C. Summary Opinion 2009-166



                      UNITED STATES TAX COURT



               SEIFU HAILU RAGASSA, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 24782-07S.               Filed November 10, 2009.



     Seifu Hailu Ragassa, pro se.

     Molly H. Donohue, for respondent.



     GOLDBERG, 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.    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.   Unless otherwise indicated, subsequent

section references are to the Internal Revenue Code (Code) in
                                - 2 -

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

Tax Court Rules of Practice and Procedure.

     Respondent determined a deficiency of $1,575 in petitioner’s

2005 Federal income tax.   The issues for decision are whether

petitioner is entitled to business expense deductions, cost of

goods sold, and itemized deductions greater than the amounts

respondent allowed.

                             Background

     The parties submitted a stipulation of facts with

accompanying exhibits, and we incorporate the stipulation and

those exhibits by this reference.   Petitioner resided in New

Hampshire when he filed his petition.

     Petitioner is originally from Ethiopia, where he worked as a

journalist.    Politically persecuted, he left in 1998 for Kenya,

where he served as an interpreter in the U.S. Embassy in Nairobi.

He emigrated to the United States near the end of 1999 or

beginning of 2000, settling in New Hampshire.

     During the year at issue, 2005, in addition to being a

student, petitioner had three sources of income, which he

correctly reported on his 2005 Federal income tax return.

Petitioner’s main source of income was $39,560 that he earned as

a full-time employee of the State of New Hampshire Department of

Corrections.   Petitioner served the Department of Corrections as

sergeant, supervising 14 correctional officers and more than 300
                               - 3 -

inmates who were assigned to a medium-custody facility while

awaiting parole into the community.

     Petitioner also earned $1,500 serving part time as a

translator and interpreter for a New Hampshire language services

corporation, Words Foreign Language Translation & Interpreting

Services, Inc. (Words).   Petitioner speaks many languages,

including Aramaic, Ethiopian, Hindi, and Urdu.    About every

second or third week, on weekdays when he was not scheduled for

work, petitioner would drive to a court in Maine or Massachusetts

to perform interpreting services.   The distance to the court in

Maine, petitioner’s principal destination, is 150 to 160 miles

from petitioner’s home.   Petitioner would usually return home the

same day, but on occasion, including sessions that lasted for 2

days, petitioner would stay overnight and drive home the

following day.   Petitioner received a flat rate from Words of $40

per hour.

     Words did not pay for petitioner’s travel time or reimburse

petitioner for his vehicle or other expenses.    Words issued a

Form 1099-MISC, Miscellaneous Income, for 2005 reporting the

$1,500 as nonemployee compensation.    Petitioner therefore worked

a total of 37.5 hours ($1,500 divided by $40 per hour) for Words

during 2005.   Petitioner reported his income and expenses from

his interpreting activities on Schedule C, Profit or Loss From

Business, a categorization that respondent does not challenge.
                                - 4 -

      Petitioner’s third source of income was gambling winnings.

On Forms W-2G, Certain Gambling Winnings, Foxwoods Resort Casino

reported that petitioner won $3,180 in gambling proceeds during

2005.

      Petitioner timely filed his 2005 Federal income tax return,

which respondent examined.    Eddy of Ekanem Tax Services in Boston

prepared the tax return and checked the box as a self-employed

paid preparer.   Because petitioner could not recall the

preparer’s last name, we will hereinafter refer to the preparer

as Mr. Ekanem.   In a notice of deficiency, respondent determined

a deficiency in Federal income tax of $1,575 arising from the

following five adjustments:

                                         Per 2005    Amount
                                        Tax Return   Allowed

           Schedule C

             Cost of goods sold            $2,004       -0-
             Car & truck expenses           3,500    $1,620
             Insurance                      2,100       -0-

           Schedule A

             Charitable contributions       3,175       -0-
             Gambling losses                5,032     3,180

                              Discussion

I.   Burden of Proof

      In general, the Commissioner’s determination set forth in a

notice of deficiency is presumed correct, and the taxpayer bears

the burden of showing that the determination is in error.      Rule
                                 - 5 -

142(a)(1); Welch v. Helvering, 

, 115 (1933).       Under

section 7491(a) the burden may shift to the Commissioner

regarding factual matters if the taxpayer produces credible

evidence and meets the other requirements of the section.

Petitioner does not argue that he satisfied the elements for a

burden shift, but even if he did advance this argument,

petitioner did not produce sufficient evidence to support a

burden shift.    Accordingly, the burden of proof remains on

petitioner to disprove respondent’s determination for 2005.

II.   Procedural Matters

      Before delving into respondent’s specific adjustments,

petitioner asks the Court to consider two issues with respect to

respondent’s procedural conduct.

      A.   Preliminary Notices

      With respect to the first procedural issue, petitioner

claims that he did not receive any preliminary notices, such as

the so-called 30-day letter or CP2000 notice, that the Internal

Revenue Service (IRS) normally sends to taxpayers.    Therefore,

petitioner contends that the IRS deprived him of an opportunity

to discuss the adjustments before the IRS determined his

deficiency.    Petitioner does not dispute, and would have no

first-hand knowledge to dispute, respondent’s assertion that the

IRS sent preliminary notices by regular first class mail in March

and April 2007.    Petitioner simply states that he did not receive
                               - 6 -

the notices and was consequently surprised when he received by

registered mail the notice of deficiency dated July 31, 2007,

determining an income tax deficiency of $1,575 for 2005.

     The Court generally “will not look behind a deficiency

notice to examine the evidence used or the propriety of * * *

[the Commissioner’s] motives or of the administrative policy or

procedure involved in making his determinations.”   Greenberg’s

Express, Inc. v. Commissioner, 

, 327 (1974) (declining

to investigate the Commissioner’s alleged failures to issue a

30-day letter and to offer the taxpayers a conference with

Appeals before issuing the notice of deficiency).   The underlying

rationale for this principle is that the Court conducts its

proceedings de novo, deciding a taxpayer’s tax liability on the

merits of the case and not on any previous record the

Commissioner has developed at the administrative level.

the notice of deficiency reveals on its face that

the Commissioner has made a determination for a particular year,

in a particular amount, and after reviewing information specific

to the particular taxpayer, then barring unusual facts or

circumstances not present here, the notice of deficiency is

valid.   Campbell v. Commissioner, 

, 112, 115 (1988);

Montgomery v. Commissioner, 

, 522 (1975); Whittington

v. Commissioner, T.C. Memo. 1999-279.   Preliminary notices and

administrative meetings may be courteous and may allow taxpayers
                                 - 7 -

to resolve early misconceptions by the Commissioner, but section

6212(a) (setting forth the requirements for issuing a notice of

deficiency) or any other section does not require them.

     In petitioner’s case, the 10-page notice of deficiency

indicates clearly that respondent made a determination for a

particular year, 2005, in a particular amount, $1,575, after

examining the particular items of petitioner’s 2005 Federal

income tax return.    Accordingly, we find that respondent’s notice

of deficiency is valid.

     B.   Detrimental Reliance

     Petitioner’s second complaint against respondent’s

procedures begins with a September 18, 2007, telephone

conversation that Mr. Ekanem and petitioner had with Richard

Theodore, the IRS representative whose name the notice of

deficiency, dated July 31, 2007, lists as the proper person to

contact at the IRS.   According to petitioner, during the

telephone conversation, Mr. Theodore told Mr. Ekanem and

petitioner that the IRS was “all set” with respect to the

adjustments.   Petitioner interpreted this comment as having

convinced Mr. Theodore that the Commissioner’s determination was

in error and petitioner’s 2005 return was correct as filed.    The

Court received into evidence a copy of the notice of deficiency

with a note petitioner wrote on the front page asking Mr.

Theodore to “please close this audit” per the September 18, 2007,
                                 - 8 -

telephone conversation.     Petitioner therefore felt misled when on

October 23, 2007, he called Mr. Theodore and discovered that he

still owed the $1,575.    Petitioner then had to scramble to file

his petition quickly before the 90-day period expired 6 days

later, leaving petitioner wondering whether Mr. Theodore and the

IRS had intentionally tried to trick him into missing the

deadline for filing a petition with the Tax Court.

     Respondent claims that after the notice of deficiency was

issued, the Appeals Office sent several letters to petitioner,

but petitioner did not respond.    Petitioner counters that but for

Mr. Theodore’s false representation, petitioner would have had

his accountant available to provide copies of his records to

respondent.   Instead, by the time petitioner called Mr. Ekanem

for additional assistance, an individual in the office informed

petitioner that Mr. Ekanem was unavailable because he was in

Nigeria.1   Petitioner had given all of his tax records to Mr.

Ekanem during the tax preparation session in early 2006.

Petitioner acknowledged that Mr. Ekanem returned the originals,

but petitioner lost them.

     Unfortunately for petitioner, even if Mr. Theodore made such

a statement, the Commissioner is empowered to retroactively


     1
      We take judicial notice that on Jan. 23, 2008, a Lexington,
Mass., resident named Eddy Ekanem pleaded guilty to one count of
embezzlement and four counts of larceny related to insurance
fraud, receiving a sentence of 2-1/2 years in the House of
Corrections.
                                    - 9 -

correct mistakes of law, even where a taxpayer has relied to his

detriment on the Commissioner’s mistake.       Dixon v. United States,

, 72-73 (1965); Montgomery v. 

at

522 (the recommendation of an IRS agent for a “no change” audit

is not binding on the Commissioner for purposes of litigation);

Hodel v. Commissioner, T.C. Memo. 1996-348 (an IRS agent does not

have the authority to bind the Commissioner, even if the taxpayer

has detrimentally relied on the erroneous advice of an agent).

III.    Respondent’s Disallowances

       A.   Deductions in General

       Deductions are a matter of legislative grace, and taxpayers

must satisfy the statutory requirements for claiming the

deductions.     INDOPCO, Inc. v. Commissioner, 

, 84

(1992); New Colonial Ice Co. v. Helvering, 

, 440

(1934).     Section 6001 requires taxpayers to maintain records

sufficient to establish the amount of each deduction.       See also

Ronnen v. Commissioner, 

, 102 (1988); sec. 1.6001-1(a),

(e), Income Tax Regs.     If a taxpayer can establish that he once

possessed adequate records, but lost the records on account of

circumstances beyond his control, such as a fire or flood or

other casualty, then the Court will permit the taxpayer to

reasonably reconstruct his expenses.        Gizzi v. Commissioner, 

, 345 (1975).
                              - 10 -

     Taxpayers may deduct ordinary and necessary expenses that

they pay in connection with operating a trade or business.       Sec.

162(a); Boyd v. Commissioner, 

, 313 (2004).       To be

ordinary the expense must be of a common or frequent occurrence

in the type of business involved.   Deputy v. du Pont, 

, 495 (1940).   To be necessary an expense must be appropriate

and helpful to the taxpayer’s business.   Welch v. 

.   Additionally, the expenditure must be “directly

connected with or pertaining to the taxpayer’s trade or

business”.   Sec. 1.162-1(a), Income Tax Regs.   Section 262(a)

disallows deductions for personal, living, or family expenses.

     If a taxpayer establishes that an expense is deductible but

is unable to substantiate the precise amount, we may estimate the

amount, bearing heavily against the taxpayer whose inexactitude

is of his own making.   Cohan v. Commissioner, 

, 543-

544 (2d Cir. 1930) (hereinafter the Cohan rule or simply Cohan).

The taxpayer must present sufficient evidence for the Court to

form an estimate, because without such a foundation, any

allowance would amount to unguided largesse.     Vanicek v.

Commissioner, 

, 742-743 (1985).

     Congress enacted legislation negating the judicial doctrine

of Cohan with regard to certain, but not all, expenses.       Sec.

274(d); sec. 1.274-5T(a), Temporary Income Tax Regs., 50 Fed.

Reg. 46014 (Nov. 6, 1985).   Expenses associated with travel,
                               - 11 -

meals, and certain listed property defined in section 280F(d)(4),

including passenger automobiles, computers, and cellular

telephones, are all now subject to a heightened level of

substantiation, requiring taxpayers to corroborate their

statements with adequate records or sufficient other evidence

establishing the amount, time, place, and business purpose of the

expense.   Sec. 274(d).   Thus, for these categories of expenses,

even if an estimate would otherwise be allowable under Cohan, the

Code prohibits a deduction unless the taxpayer has sufficient

substantiation.    See sec. 1.274-5T(a), Temporary Income Tax

.

     With respect to cost of goods sold, purchases are not

deductible but are instead an offset to gross receipts in

determining gross income.    Metra Chem Corp. v. Commissioner, 

(1987); Nunn v. Commissioner, T.C. Memo. 2002-250;

Wright v. Commissioner, T.C. Memo. 1993-27; sec. 1.61-3(a),

Income Tax Regs.    Thus, the Code does not treat cost of goods

sold as a deduction from gross income, and it is not subject to

the limitations on deductions in sections 162 and 274.    See Metra

Chem Corp. v. 

; B.C. Cook & Sons, Inc. v.

Commissioner, 

, 428 (1975), affd. per curiam 

(5th Cir. 1978); Nunn v. 

; secs.

1.61-3(a), 1.162-1(a), 1.471-3, Income Tax Regs.    Nonetheless,

taxpayers must substantiate the amount they report as cost of
                                - 12 -

goods sold, and they must maintain sufficient records for this

purpose.   Sec. 6001; Nunn v. 

; Wright v.

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

     Keeping in mind these well-established principles, we now

apply the law to petitioner’s specific facts to decide whether

respondent’s determinations are correct for 2005.

     B.    Schedule C--Translation and Interpretation Services

            1.   Cost of Goods Sold

     Petitioner reported $2,004 in cost of goods sold, and

respondent disallowed the entire amount.      Petitioner is unsure

what items Mr. Ekanem included in cost of goods sold.      Petitioner

testified that the items were probably goods “which would help me

as an interpreter, maybe clothes, maybe some items which [were]

helpful to me to go up there and interpret.”      Petitioner

acknowledged that he bought suits for his interpreting

assignments and that Mr. Ekanem probably included the costs of

the suits in cost of goods sold.      Petitioner stated that the

suits he bought in 2005 for interpreting were different from

suits he would wear for other purposes such as going out to a

formal dinner, but he did not specify how the suits were

different.

     Taxpayers may deduct expenses for articles of clothing under

section 162(a) only if the clothing is required in the taxpayer’s

employment, is not suitable for general or personal wear, and is
                              - 13 -

not worn for general or personal purposes.    Yeomans v.

Commissioner, 

, 767-768 (1958).    We find the suits

petitioner purchased in 2005 to serve as an interpreter are

suitable for general wear.   Therefore, petitioner is not entitled

to claim as a cost of goods sold or otherwise deduct amounts he

paid for clothing in 2005 to serve as an interpreter.      With

respect to any other items petitioner included in cost of goods

sold for 2005, petitioner unfortunately provided no information.

We therefore sustain respondent’s full disallowance of

petitioner’s cost of goods sold.

          2.   Car and Truck Expenses

     Petitioner claimed $3,500 and respondent allowed $1,620 in

deductions for car and truck expenses for 2005.    Petitioner

claimed he owned two automobiles in 2005:    A large Chevrolet

Suburban for personal use and for commuting to and from his job

as a corrections officer, and a smaller, gas-efficient Dodge Neon

he bought in 2005 for $4,800 that he used exclusively for driving

to and from his interpreting assignments.    Petitioner claims he

maintained a contemporaneous log detailing the trips he made for

interpreting and that he presented the log to Mr. Ekanem to

calculate the proper deduction.    But as noted, petitioner was

unable to find the original log and Mr. Ekanem was unavailable at

trial to produce a copy or to explain the deduction.
                              - 14 -

     Petitioner did not establish that he lost the original on

account of circumstances beyond his control.    Even if this were

the case, petitioner has not satisfied the second requirement of

reasonably reconstructing or even attempting to reconstruct his

expenses.   See Gizzi v. Commissioner, 

.

     Moreover, section 274(d) requires stringent substantiation

requirements for certain expenses, including expenses related to

passenger automobiles as listed property under section

280F(d)(4)(A)(i).   Respondent already allowed a deduction for

2005 of $1,620, which was apparently an allowance of 4,000

business miles times the 2005 standard mileage rate of 40.5 cents

per mile.   See Rev. Proc. 2004-64, sec. 5.01, 2004-2 C.B. 898,

900 (setting the standard mileage rate for 2005 at 40.5 cents per

mile).   We also note that in Part V, Other Expenses, of Schedule

C, Mr. Ekamen on petitioner’s behalf separately deducted $1,400

as a gasoline expense, which respondent did not challenge.    The

standard mileage rate includes an allowance for gasoline, as well

as for depreciation or lease payments, maintenance and repairs,

tires, oil, insurance, and registration fees.

C.B. at 900.   Consequently, petitioner has provided no

evidence to support a larger deduction than the one or ones

respondent has already allowed.   We sustain respondent’s partial

disallowance of petitioner’s car and truck expenses.
                                 - 15 -

          3.   Insurance

     Petitioner deducted $2,100 as an insurance expense for 2005,

and respondent disallowed the entire amount.     Petitioner

estimated that of the $2,100, he paid about $500 or $600 for

homeowner’s insurance, and the remaining $1,500 to $1,600 was for

automobile insurance on the Dodge Neon that he drove exclusively

for his interpreting assignments.     For the rest of this

discussion, we will assume petitioner spent $500 on homeowner’s

insurance and the remaining $1,600 on automobile insurance for

2005.

                  a.   Automobile Insurance

     As noted above, the standard mileage rate already includes

an allowance for insurance.     Rev. Proc. 2004-64, sec. 5.03.

Moreover, passenger automobiles are included as listed property

under section 280F(d)(4)(A)(i), and related expenses are

therefore subject to the stringent substantiation requirements of

section 274(d).    Petitioner provided no records, no canceled

checks from his bank, and not even copies of bills or policy

statements from his insurance company to substantiate that he

paid $1,600 in automobile insurance in 2005 or that the payment

was solely for the Dodge Neon.     Petitioner also did not present a

reconstructed record to replace his lost log establishing his

2005 business use percentage for the Dodge Neon.
                                - 16 -

     For all of these reasons, we sustain respondent’s full

disallowance of petitioner’s automobile insurance expense.

                 b.   Homeowner’s Insurance

     Regarding the homeowner’s insurance, taxpayers may deduct

expenses related to a portion of their home that they use

regularly and exclusively as the principal place of any trade or

business.    Sec. 280A(c); Tobin v. Commissioner, T.C. Memo.

1999-328.    The record contains no indication that Words provided

petitioner with office space.    Even if Words did provide space,

we doubt petitioner could have conveniently accessed his messages

and conducted his business there.    Petitioner’s uncontroverted

testimony is that he dedicated part of his home regularly and

exclusively to coordinating his interpreting activities.

Petitioner estimated the space as 300 or 400 square feet of his

2,400-square-foot home.    In this space petitioner maintained a

computer, a desk, a fax machine, and a printer to receive

telephone calls and faxes from hospitals, immigration offices,

and courts.    Petitioner checked his messages regularly before and

after his job as a corrections officer.

     Respondent did not challenge this aspect of petitioner’s

testimony.    We find petitioner’s testimony regarding the business

use of his home credible.    However, petitioner’s estimate of a

300- or 400-square-foot area seems excessive for such a limited

activity (only 37.5 paid hours for all of 2005).    Therefore,
                              - 17 -

without additional information, applying Cohan, and bearing

heavily against petitioner, we find it likely that petitioner

dedicated no more than a small area, perhaps 100 square feet out

of the 2,400-square-foot home, or 4.17 percent, for business use.

     Ordinarily, at this juncture we would find that petitioner

is entitled to a $21 ($500 x 4.17 percent) deduction on Schedule

C for a homeowner’s insurance expense for 2005.    However, section

280A(c)(5) provides two additional considerations.    First,

section 280A(c)(5) limits a taxpayer’s deductions for business

use of a home to the amount by which the activity’s gross income

from the taxpayer’s business use of the residence exceeds the sum

of deductions which are allowable regardless of whether the

taxpayer used the residence for business, such as mortgage

interest and property taxes, plus deductions for expenses of the

business which are not allocable to the business use of the

residence.   See Tobin v. 

.    In other words, a

taxpayer may not claim a deduction that would give rise to, or

increase a net loss from, the business to which the deduction

relates.   Visin v. Commissioner, T.C. Memo. 2003-246.

Additionally, section 280A(c)(5) provides that the taxpayer may

carry forward any resulting disallowed deductions to the next

year.   See sec. 280A(c)(5) (flush language).    On Schedule C for

2005, petitioner reported a loss of $10,754 before respondent’s

adjustments.   Accordingly, the amount of the $21 eligible
                                - 18 -

homeowner’s insurance expense that petitioner may deduct in 2005

or must carry forward to 2006 will be computed under Rule 155.

     C.   Itemized Deductions

           1.   Charitable Contributions

     Petitioner deducted $3,175 in charitable contributions on

Schedule A, Itemized Deductions, for 2005.   Respondent disallowed

the entire amount as not being made to a qualifying organization.

Petitioner acknowledges that part of the $3,175 total includes

donations he sent to Ethiopia to help charitable causes there,

and he concedes that these overseas organizations are not

qualified section 501(c)(3) charities within the meaning of

section 170(c).   However, petitioner also claims that he belongs

to, attended, and tithed his income to the Ethiopian Orthodox

Church in the United States, not the Ethiopian Methodist Church

which Mr. Ekamen mistakenly keyed onto Schedule A.

     Petitioner states that he attended an Ethiopian Orthodox

Church about once a month in the Washington, D.C., area where

most of his family resides and that he also attended an Ethiopian

Orthodox Church in Boston when his schedule permitted.

Petitioner claims he donated clothes to families in need in the

Boston area and that he put about $100 cash in the church’s box

each time he attended a church in Washington or Boston.

Petitioner acknowledges he did not ask for receipts, but he has
                              - 19 -

offered to provide respondent with the telephone number and

contact information for the church in Washington, D.C.

     Taxpayers may generally deduct a charitable contribution

only if they substantiate the deduction in a manner verifiable

according to “regulations prescribed by the Secretary.”   Sec.

170(a)(1).   For each charitable contribution of money less than

$250 made before 2006 the pertinent regulation requires that the

taxpayer substantiate the contribution with a canceled check, a

receipt, or other reliable evidence showing the name of the

donee, the date of the contribution, and the amount of the

contribution.   Alami El Moujahid v. Commissioner, T.C. Memo.

2009-42; sec. 1.170A-13(a)(1), Income Tax Regs.   Contributions of

cash or property of over $250 require the donor to obtain the

donee’s contemporaneous written acknowledgment of the donation.

Sec. 170(f)(8); Alami El Moujahid v. 

.

     The Court has not decided definitively whether Cohan is

available to estimate charitable contributions.   See Kendrix v.

Commissioner, T.C. Memo. 2006-9 (finding that the Court has not

yet squarely addressed the inherent conflict between section

170(a)(1) and the application of Cohan to unverified or

inadequately substantiated charitable contributions).    However,

precedents exist to allow a Cohan estimate for charitable

contributions, especially where we find the taxpayer was candid,

forthright, and credible.   Stockwell v. Commissioner, T.C. Memo.
                                   - 20 -

2007-149 (stating unconditionally that “We may estimate cash

charitable contributions under the Cohan rule”); Hooks v.

Commissioner, T.C. Memo. 1993-437; Wren v. Commissioner, T.C.

Memo. 1984-456.

     Petitioner provided no substantiation of his charitable

contributions.    However, respondent’s blanket disallowance goes

too far.    Petitioner is an industrious individual working two

jobs while attending school.       His religious commitment appears

genuine.    In summary for charitable contributions, using our best

judgment on the entire record before us, and under Cohan bearing

heavily against petitioner’s own inexactitude, we find it

credible that at least once a month throughout 2005 petitioner

attended and made a cash contribution of at least $25 to a

qualified Ethiopian Orthodox Church in Washington, D.C., or in

Boston.    Accordingly, petitioner is entitled to an itemized

deduction of $300 for charitable contributions in 2005.

            2.   Gambling Losses

     Petitioner deducted $5,032 in gambling losses as an itemized

deduction, and respondent limited the deduction to $3,180, the

amount of petitioner’s reported gambling winnings.       Losses from

wagering transactions are limited to the gains from the

transactions.    Sec. 165(d); Merkin v. Commissioner, T.C. Memo.

2008-146; sec. 1.165-10, Income Tax Regs.       Petitioner has

provided no justification to disregard this rule, and we find
                                - 21 -

none.   Therefore, we sustain respondent’s partial disallowance of

petitioner’s gambling losses.

     To reflect our disposition of the issues,


                                             Decision will be entered

                                         under Rule 155.