The Supreme Court has laid out a two-part test to determine whether such a "home office" constitutes a taxpayer's principal place of business: (1) the relative importance of the activities2015 Tax Ct. Memo LEXIS 148">*156 performed at each business location, and (2) the amount of time spent at each place. Commissioner v. Soliman, 506 U.S. 168, 175">506 U.S. 168, 506 U.S. 168, 175">175, 113 S. Ct. 701">113 S. Ct. 701, 121 L. Ed. 2d 634">121 L. Ed. 2d 634 (1993). However, Congress adjudged the Soliman standard too rigid and enacted flush language following section 280A(c)(1)(C) designed to liberalize it. The Taxpayer Relief Act of 1997, Pub. L. No. 105-34, sec. 932(a), 111 Stat. at 881; see H.R. Rept. No. 105-148, at 407 (1997), 1997-4 C.B. (Vol. 1) 319, 729. This flush language provides that

the term "principal place of business" includes a place of business which is used by the taxpayer for the administrative or management activities of any trade or business of the taxpayer if there is no other fixed location of such trade or business where the taxpayer conducts *147 substantial administrative or management activities of such trade or business.

Petitioner has not satisfied any of the section 280A(c)(1) exceptions that would allow a deduction for the business use of the Susanville or Clearlake Oaks residences. There was no separate structure at either residence, nor did she use either to meet with clients. Seesec. 280A(c)(1)(B) and (C). That leaves only the exception for the use of a portion of each residence exclusively and on a regular basis "as the principal place of business for any trade or business of the taxpayer" as used in section 280A(c)(1)(A), as further modified in the flush2015 Tax Ct. Memo LEXIS 148">*157 language thereafter.

For the reasons discussed below, we conclude that neither the Susanville residence nor the Clearlake Oaks residence was petitioner's principal place of business within the meaning of section 280A(c)(1) during 2006 and 2007. The Moss Beach office was a fixed location, and according to petitioner's own testimony she performed 50% of her work there in 2006 and 75% in 2007. It can be readily inferred, especially in the absence of any contrary evidence, that petitioner performed the administrative and management activities relating to her accounting business ratably over the year--with the result that approximately 50% *148 and 75% of these activities would have been performed at the Moss Beach office in 2006 and 2007, respectively. Indeed, petitioner testified that she hired temporary assistants to perform significant bookkeeping tasks for the business in 2007 and that that work was done at the Moss Beach office. Therefore, we conclude on this record that petitioner conducted substantial administrative and management activities at a fixed location (the Moss Beach office) other than the Susanville and Clearlake Oaks residences. Accordingly, neither of the two residences was petitioner's principal2015 Tax Ct. Memo LEXIS 148">*158 place of business as defined in the flush language.

Because petitioner estimates that she performed at least half the work of her business at the Moss Beach office during each of the years at issue, she has not shown that the remaining work split between the Susanville and Clearlake Oaks residences exceeded the work performed at the Moss Beach office in importance or time expended. Accordingly, neither of the residences was petitioner's principal place of business for either year without regard to the flush language.

We therefore sustain respondent's disallowance of the deductions claimed for business use of a residence for 2006 and 2007.

Generally, a taxpayer is permitted to deduct the ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business. Sec. 162(a). When deductions are claimed for the business use of property that is also readily used for personal purposes, the requirements for substantiating business use are stricter. Such property--denoted "listed property" in section 274--includes "passenger automobiles" such as the Thunderbird and the Taurus for which petitioner claimed business use deductions. Seesecs. 280F(d)(4)(A)(i), 274(d)(4).

To substantiate deductions2015 Tax Ct. Memo LEXIS 148">*159 for the business use of passenger automobiles, a taxpayer must prove various elements of business use including, inter alia, the amount of business mileage and the total mileage for the taxable year. Sec. 1.274-5T(b)(6)(i)(B), Temporary Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985). Each such element must be substantiated by "adequate records" or by "sufficient evidence corroborating * * * [the taxpayer's] own statement." Id.para. (c)(1), 50 Fed. Reg. 40017. Adequate records for this purpose include account books, diaries, logs, statements of expense, trip sheets, or similar records and documentary evidence made at or near the time of the expenditure. Id.subpara. (2)(i). If a taxpayer is unable to satisfy the "adequate records" standard, he must *150 establish each element of the expenditure by: (1) his own statement, including specific and detailed information and (2) by other corroborative evidence sufficient to establish each element. Id.subpara. (3)(i), 50 Fed. Reg. 46020. When the element to be established is the amount of business use, this corroborative evidence must be direct evidence--such as a statement in writing or oral testimony of witnesses setting forth detailed information about the use--or documentary evidence. Id. Such documents "must contain sufficient information as to each element2015 Tax Ct. Memo LEXIS 148">*160 of every business/investment use." Id.subpara. (2)(ii)(C), 50 Fed. Reg. 46018.

With respect to petitioner's deductions for business use of the Thunderbird for 2006 and 2007, respondent allowed $11,793, or approximately 83% of the $14,246 petitioner claimed as a deduction for 2006, and he allowed $8,406, or approximately 65% of the $12,962 petitioner apparently⁷ claimed as a deduction for 2007. To substantiate her claim that she is entitled to larger deductions, petitioner testified at trial that she used the Thunderbird--the only vehicle she owned during 2006 and 2007--exclusively for business purposes. In the same testimony, she later contradicted herself by conceding that 5% of her use of the vehicle each year was personal, including visits to her father in which she took *151 him to buy groceries. Apparently realizing the difficulties her trial testimony presented for her claim of 100% business use of the Thunderbird, petitioner offered a third version of events in her posttrial brief in which she claims for the first time that the trips to visit her father occurred when the Thunderbird was in the shop for repairs and that the trips to the grocery store were made in his vehicles.

Statements2015 Tax Ct. Memo LEXIS 148">*161 in posttrial briefs are, of course, not evidence, see, e.g., Rule 143(b); Niedringhaus v. Commissioner, 99 T.C. 202, 214">99 T.C. 202, 99 T.C. 202, 214">214 n.7 (1992), except to the extent they may constitute an admission by a party, seeFed. R. Evid. 801(d)(2). Nonetheless, petitioner's evolving explanations concerning the use of the Thunderbird confirm the initial skepticism triggered by the claim that the only vehicle she owned was never used for personal purposes. Considering all the facts and circumstances, we conclude that petitioner's own statement concerning the business use of the Thunderbird is not credible. Moreover, the documentary evidence she offers to corroborate her statement--repair invoices recording the Thunderbird's odometer readings at various times and some receipts for vehicle-related expenditures--shed no light whatsoever on the portions of Thunderbird's business use during 2006 and 2007. Consequently, petitioner has failed to *152 substantiate that she is entitled to any deductions for business use of the Thunderbird beyond those respondent allowed.

As for petitioner's claimed deduction for business use of the Taurus in 2007--based on the standard mileage rate for business use--respondent contends that the deduction is not allowable because a taxpayer may not claim the standard mileage2015 Tax Ct. Memo LEXIS 148">*162 rate for more than one vehicle, citing Rev. Proc. 70-25, sec. 3.03, 1970-2 C.B. 506, 507. The revenue procedure governing the use of the standard mileage rate for 2007, however, is Rev. Proc. 2006-49, sec. 11, 2006-2 C.B. 936, 944. Rev. Proc. 2006-49, sec. 5.06(1), 2006-2 C.B. at 938, allows a taxpayer to claim the business standard mileage rate for up to four vehicles. Although the vehicle limit would not bar petitioner's use of the business standard mileage rate for 2007, other clear terms of the revenue procedure render her ineligible to use that rate for the Taurus. Rev. Proc. 2006-49, sec. 5.02, 2006-2 C.B. at 938, provides that a taxpayer may use the business standard mileage rate "with respect to an automobile that is either owned or leased by the taxpayer." The ownership requirement of Rev. Proc. 2006-49, sec. 5.02, supra, reflects the fact that the deduction using the standard mileage rate "is in lieu of all fixed and variable costs of the automobile allocable to business purposes * * * . Items such as depreciation * * * are included in fixed and variable costs for this purpose." Id.*153 sec. 5.03, 2006-2 C.B. 936. A taxpayer may not claim depreciation deductions for property he does not own. Arevalo v. Commissioner, 124 T.C. 244, 251">124 T.C. 244, 124 T.C. 244, 251">251 (2005), aff'd, 469 F.3d 436">469 F.3d 436 (5th Cir. 2006).

Petitioner did not own or lease the Taurus in 2007. She is therefore not eligible to use the business standard mileage rate to compute the deduction claimed on her 2007 return, and she has produced no other2015 Tax Ct. Memo LEXIS 148">*163 competent evidence to substantiate a business expense deduction for the Taurus for 2007.⁸ Consequently, we sustain respondent's disallowance of a deduction for the car and truck expenses that petitioner claimed for 2007 for the business use of the Taurus.

As discussed in our findings of fact, respondent disallowed petitioner's 2006 Schedule C "Other expense" deductions of $1,550 for "cultural supplies" and $770 for "health maintenance" items. *154 The "cultural supplies" consisted of ti leaves and other2015 Tax Ct. Memo LEXIS 148">*164 plants, some of which petitioner used personally as apparel⁹ and/or for medicinal purposes and some of which she contends she gave as gifts to clients.¹⁰

To the extent petitioner used any of the ti leaves or other plants for personal medicinal purposes, they constitute nondeductible personal expenses. Seesec. 262. Such expenditures are not business expenses, nor are they deductible as medical expenses because there is no evidence that they were a prescribed drug. Seesec. 213(b). To the extent any of the ti leaves or other plants were given as gifts to clients, a deduction for those expenditures would need to be substantiated pursuant to the strict requirements of section 274. Sec. 274(d)(3). Thus, petitioner would need documentation prepared at or near the time2015 Tax Ct. Memo LEXIS 148">*165 of the expenditure indicating: (1) the amount of the expense, (2) a description of the gift, (3) the business purpose of the gift, and (4) her business relationship to the persons receiving the gift. Seesec. 274(d)(4); sec. 1.274-5T(c)(2)(ii)(A), Temporary *155 Income Tax Regs., supra. The allowable deduction for business gifts is also limited to $25 per recipient. Sec. 274(b).

By her own admission, the substantiation petitioner provided for her claimed business gifts--which consisted of marked-up credit card statements--was prepared approximately a year after she received the credit card statements. The substantiation was therefore not prepared at or near the time of the gift. Moreover, it does not identify the recipients of the business gifts or the value of the gift given to a particular client. We therefore sustain respondent's disallowance of the deduction petitioner claimed for "cultural supplies" for 2006.

Petitioner has also not shown entitlement to her 2006 Schedule C "Other expense" deduction of $770 for "health maintenance" items. The items in question were vitamins and nutritional supplements that petitioner purchased for personal consumption. These items were personal expenditures, seesec. 262, and vitamins or organic foods purchased and consumed pursuant2015 Tax Ct. Memo LEXIS 148">*166 to a self-imposed regimen rather than a physician's recommendation or prescription are not deductible, sec. 213(b); Lingham v. Commissioner, T.C. Memo. 1977-152. Therefore, the "health maintenance" item expenses are not deductible.

Respondent determined accuracy-related penalties under section 6662(a) and (b)(1) and (2) on the basis of negligence or disregard of rules and regulations and a substantial understatement of income tax for both 2006 and 2007. On brief respondent argues for the substantial understatement penalty only with respect to 2007. As a general rule, the Commissioner has the burden of production and must offer sufficient evidence to indicate that imposing a penalty is appropriate. Higbee v. Commissioner, 116 T.C. 438, 446">116 T.C. 438, 116 T.C. 438, 446">446 (2001); see alsosec. 7491(c). Once the Commissioner meets this burden of production, the burden shifts to the taxpayer to show that it is inappropriate to impose the penalty because of exculpatory factors, including reasonable cause. Higbee v. Commissioner, 116 T.C. 438, 446-447">116 T.C. 446-447.

Section 6662(a) and (b)(1) and (2) imposes a 20% penalty on any underpayment of tax attributable to negligence or disregard of rules and regulations or a substantial understatement of income tax, respectively. "'[N]egligence' includes any failure to make a reasonable attempt to comply" with the internal revenue laws. Sec. 6662(c). It connotes "'a lack of due care or the failure to do what a2015 Tax Ct. Memo LEXIS 148">*167 reasonable and ordinarily prudent person would do under the circumstances.'" Freytag v. Commissioner, 89 T.C. 849, 887">89 T.C. 849, 89 T.C. 849, 887">887 (1987) (quoting Marcello v. Commissioner, 380 F.2d 499, 506">380 F.2d 499, 380 F.2d 499, 506">506 (5th Cir. 1967), aff'g43 T.C. 168">43 T.C. 168 (1964)*157 andT.C. Memo 1964-299), aff'd, 904 F.2d 1011">904 F.2d 1011 (5th Cir. 1990), aff'd, 501 U.S. 868">501 U.S. 868, 111 S. Ct. 2631">111 S. Ct. 2631, 115 L. Ed. 2d 764">115 L. Ed. 2d 764 (1991). This includes "any failure by the taxpayer to keep adequate books and records or to substantiate items properly." Sec. 1.6662-3(b)(1), Income Tax Regs. Disregard of rules and regulations includes any careless, reckless, or intentional disregard of the Internal Revenue Code, the regulations, or certain Internal Revenue Service administrative guidance. Id.subpara. (2). In general, an "understatement" of income tax is the excess of the amount of tax required to be shown on the return over the amount of tax actually shown on the return. Sec. 6662(d)(2)(A). An understatement of income tax is "substantial" if it exceeds the greater of $5,000 or 10% of the tax required to be shown on the return. Id.

No penalty is imposed with respect to any portion of an underpayment if the taxpayer acted with reasonable cause and in good faith in regard to that portion. Sec. 6664(c)(1). That determination is made case-by-case, depending on the facts and circumstances. Sec. 1.6664-4(b)(1), Income Tax Regs. Those circumstances include the experience, knowledge, and education of the taxpayer. Id.

Respondent has met his burden of production with respect to petitioner's negligence and disregard2015 Tax Ct. Memo LEXIS 148">*168 of rules or regulations for both 2006 and 2007. Petitioner claimed substantial home office expense deductions for each year while *158 simultaneously maintaining and deducting the costs of the Moss Beach office, in violation of a statutory rule limiting such deductions to a home office that either constitutes the taxpayer's principal place of business, is used for client meetings, or is a separate structure. As there is no evidence petitioner undertook any investigation to determine the correctness of these return positions, this portion of the understatement is attributable to a careless disregard of rules or regulations. Seesec. 1.6662-3(b)(2), Income Tax Regs. Her inflated claims of business use of passenger automobiles were negligent under the circumstances, as were her claims of deductions for business gifts, given the lack of records to substantiate these deductions. See id.subpara. (1). Petitioner's attempts to deduct clearly personal items, such as nutritional supplements and ti leaves purchased for her own use, were obviously negligent.

In addition, petitioner conceded various challenged deductions at or before trial. She conceded that she was not entitled to a $12,000 depreciation deduction claimed for 2007 with2015 Tax Ct. Memo LEXIS 148">*169 respect to a "gravel trailer" in which she admitted she had--at most--a security interest as a lender. Petitioner also conceded that she received but failed to report interest income and income from a State tax refund in 2007. Finally, petitioner conceded that she was not entitled to a $72,055 wage expense *159 deduction for 2007 but, as discussed below, we conclude that she has shown reasonable cause with respect to that erroneous deduction.

With one exception, petitioner has failed to show that she acted with reasonable cause and in good faith with respect to the underpayments for 2006 and 2007. Seesec. 6664(c)(1). The determination of reasonable cause is made on a case-by-case basis, considering circumstances such as the knowledge and experience of the taxpayer. Sec. 1.6664-4(b)(1), Income Tax Regs. During the years at issue petitioner was an accountant providing tax return preparation services to others. Other than some vague assertions about how items are treated for tax purposes in the case of nonprofit organizations, petitioner offered no justification for what were substantial departures from well-settled tax rules. We accordingly sustain respondent's determination of negligence penalties for the underpayments for 2006 and 20072015 Tax Ct. Memo LEXIS 148">*170 with one exception.

Petitioner claimed an erroneous $72,055 deduction for a wage expense for 2007. However, the circumstances giving rise to that deduction were that petitioner agreed to serve in effect as a payroll agent for a client. The client paid over funds totaling $69,884 to petitioner during 2007, which she deposited into a trust account. From this trust account, petitioner arranged, using the services of a third-party payroll services firm, to pay out wages to the client's employees *160 totaling $72,055. On her 2007 Schedule C petitioner included in gross receipts the $69,884 received from the client and claimed a wage expense deduction for the $72,055 she arranged to be paid out to the client's employees. Respondent now concedes that the $69,884 is not includible in gross receipts, and petitioner concedes that she is not entitled to a wage expense deduction of $72,055. The discrepancy in the two figures is not otherwise explained in the record, but we conclude that to the extent the discrepancy may give rise to an underpayment for 2007, petitioner had reasonable cause for that portion of the underpayment.

In the event the Rule 155 computation indicates that petitioner's understatement2015 Tax Ct. Memo LEXIS 148">*171 of tax for 2007 exceeds the greater of $5,000 or 10% of the amount of tax required to be shown on the return, we conclude that the underpayment for 2007 is also attributable to a substantial understatement of income tax for which she has not shown reasonable cause, except as found herein.

To reflect the foregoing,

Decision will be entered under Rule 155.