Petitioner testified that after rolling over $30,000 in June 2006 he sought to transfer the balance of his AmeripriseIRA to BankAnnapolis. He further testified that he structured the transfer in two parts in order to comply with what he *50 believed was the applicable law. He testified that he intended that the value of the second transfer would be invested into a certificate of deposit (CD) and eventually moved from the CD to a qualifying retirement account or IRA. Petitioner admitted that he received an early distribution from his AmeripriseIRA during 2006.

Even if we were to accept petitioner's testimony as credible, his testimony shows that he failed to roll over his remaining AmeripriseIRA balance into an IRA or a qualified plan as required by section 408(d)(3). After Ameriprise transferred the funds to BankAnnapolis, BankAnnapolis deposited the funds into petitioner's savings account. 2013 Tax Ct. Memo LEXIS 44">*53 At that point, petitioner had direct control over the funds. Petitioner introduced no evidence to show that the funds were later transferred timely to a qualifying IRA. A fundamental requirement for a rollover contribution is that the funds are actually rolled over to an IRA or other plan, seesec. 408(d)(3), and petitioner failed to satisfy this requirement. Accordingly, we find that petitioner failed to substantiate an IRA rollover contribution in an amount greater than $30,000. Therefore the remaining amount of the distribution, or $127,074, is includable in the calculation of petitioner's taxable income.

Section 72(t)(1) imposes a 10% additional tax when a qualified retirement plan participant receives an early distribution that fails to satisfy one of the statutory exceptions. Petitioner admitted that he received an early distribution from his IRA, a qualified retirement plan for purposes of section 72(t), seesec. 4974(c)(4), and that he was liable for the section 72(t) additional tax with respect to the portion of the distribution that he failed to properly roll over into an IRA or a qualified plan.

Respondent determined that petitioner received 2013 Tax Ct. Memo LEXIS 44">*54 an early distribution from his IRA subject to the section 72(t) additional tax, and petitioner failed to prove that respondent's determination was erroneous. Petitioner's distribution of $127,074 is an early distribution from a qualified retirement plan. Accordingly, the 10% additional tax applies to the $127,074 distribution unless petitioner qualifies for an exception. Seesec. 72(t)(1) and (2); see also Stipe v. Commissioner, T.C. Memo. 2011-92; Dollander v. Commissioner, T.C. Memo. 2009-187.

Petitioner has not alleged that any exception applies, nor has he introduced any evidence that could allow us to conclude that an exception applies. Therefore, petitioner is liable for the 10% additional tax on his early distribution of $127,074.

Petitioner does not appear to contest that he received interest income of $622 during 2006. He attached to his untimely filed 2006 return the Forms 1099-INT from American Express Bank and BankAnnapolis. Petitioner appears to contend that the $521 of interest income he received from BankAnnapolis is excluded from taxable income because it is attributable to the funds he purportedly intended to roll over into an IRA but 2013 Tax Ct. Memo LEXIS 44">*55 which BankAnnapolis deposited into his savings account. Accordingly, we need decide only whether petitioner must include in taxable income the $521 of interest income he received from BankAnnapolis.

Gross income includes "all income from whatever source derived", including interest. Sec. 61(a). As discussed supra pp. 8-9, petitioner rolled over IRA contributions of only $30,000 during 2006. The balance of petitioner's AmeripriseIRA was deposited into his savings account at BankAnnapolis. Petitioner is not eligible to exclude from gross income the balance of the AmeripriseIRA because he failed to comply with the requirements for making a rollover contribution. Therefore, petitioner is not entitled to exclude the interest earned on the balance of the AmeripriseIRA deposited into his BankAnnapolis account. Petitioner has offered no other arguments regarding why the $521 of *53 interest income qualifies for tax-exempt treatment. Accordingly, we sustain respondent's determinations with respect to petitioner's interest income.

Deductions are a matter of legislative grace, and ordinarily a taxpayer must prove that he is entitled to the deductions he claims. INDOPCO, Inc. v. Commissioner, 503 U.S. 79">503 U.S. 79, 503 U.S. 79">84, 112 S. Ct. 1039">112 S. Ct. 1039, 117 L. Ed. 2d 226">117 L. Ed. 2d 226 (1992). 2013 Tax Ct. Memo LEXIS 44">*56 A taxpayer must maintain records to substantiate claimed deductions and to establish the taxpayer's correct tax liability. Higbee v. Commissioner, 116 T.C. 438">116 T.C. 440; see alsosec. 6001. The taxpayer must produce such records upon the Secretary's request. Sec. 7602(a); see alsosec. 1.6001-1(e), Income Tax Regs. Adequate substantiation must establish the amount and purpose of a claimed deduction. Higbee v. Commissioner, 116 T.C. 438">116 T.C. 440; see also Hradesky v. Commissioner, 65 T.C. 87">65 T.C. 87 (1975), aff'd per curiam, 540 F.2d 821">540 F.2d 821 (5th Cir. 1976). In deciding whether a taxpayer adequately substantiated a claimed deduction, we are not required to accept the taxpayer's "self-serving, unverified, and undocumented testimony." Shea v. Commissioner, 112 T.C. 183">112 T.C. 183, 112 T.C. 183">189 (1999).

When a taxpayer establishes that he paid or incurred a deductible expense but does not establish the amount of the expense, we may estimate the amount of the deductible expense. Cohan v. Commissioner, 39 F.2d 540">39 F.2d 540, 39 F.2d 540">543-544 (2d Cir. 1930)*54 . However, we cannot estimate the amount unless the taxpayer introduces evidence that he paid or incurred the expense and the evidence is sufficient for us to develop a reasonable estimate. Williams v. United States, 245 F.2d 559">245 F.2d 559, 245 F.2d 559">560 (5th Cir. 1957).

Petitioner testified that during 2006 he incurred expenses and sustained an overall loss with respect to his Schedule C business activity. At the pretrial conference petitioner described his business activity as "a consulting activity which uses pro se litigation as part of its activity". At trial he testified that his business activity involved "intellectual property valuation". Petitioner did not testify regarding any of the expenses he purportedly incurred with respect to his business activity. He also admitted that he had failed to introduce any documentation to support any of the items he reported as expenses on his Schedule C.

Petitioner did not introduce any documentation or other credible evidence to substantiate his reported Schedule C expenses or to provide any reasonable basis for estimating the expenses. Petitioner's uncorroborated testimony is insufficient to substantiate the expenses. Petitioner is not entitled to any deduction for Schedule C business expenses.

Petitioner testified that he moved his place of residence from Minnesota to Maryland in April 2006. He further testified that the moving expenses included the 2013 Tax Ct. Memo LEXIS 44">*58 cost of renting a van to transport his personal belongings to Maryland. Petitioner did not testify regarding any other moving expenses he paid. He admitted that he had failed to introduce any documentation to support any of the moving expenses that he claimed on his return.

Although petitioner has not offered any support for his contention, we infer from his testimony that he is claiming that his moving expenses were a deductible expense under section 217. Section 217 provides that a taxpayer is allowed a deduction for "moving expenses paid or incurred during the taxable year in connection with the commencement of work by the taxpayer as an employee or as a self-employed individual at a new principal place of work." Petitioner did not testify as to why he moved from Minnesota to Maryland. Regardless, petitioner did not introduce any documentation or other credible evidence to substantiate his claimed moving expenses of $7,698 or to provide any reasonable basis for estimating the expenses. Petitioner's uncorroborated testimony is insufficient to substantiate the claimed expenses. Petitioner is not entitled to any deduction for moving expenses.

If the taxpayer assigns 2013 Tax Ct. Memo LEXIS 44">*59 error to the Commissioner's determination that a taxpayer is liable for an addition to tax, the Commissioner has the burden, under section 7491(c), of producing evidence with respect to the liability of the taxpayer for the addition to tax. See Higbee v. Commissioner, 116 T.C. 438">116 T.C. 446-447. To meet his burden of production, the Commissioner must come forward with sufficient evidence that it is appropriate to impose the addition to tax. Id. Once the Commissioner meets his burden, the taxpayer must come forward with evidence sufficient to persuade this Court that the determination is incorrect. Id.

Respondent determined that petitioner is liable for an addition to tax for failure to timely file a return for 2006 under section 6651(a)(1). Section 6651(a)(1) authorizes the imposition of an addition to tax for failure to timely file a return, unless it is shown that such failure is due to reasonable cause and not due to willful neglect. See United States v. Boyle, 469 U.S. 241">469 U.S. 241, 469 U.S. 241">245, 105 S. Ct. 687">105 S. Ct. 687, 83 L. Ed. 2d 622">83 L. Ed. 2d 622 (1985); United States v. Nordbrock, 38 F.3d 440">38 F.3d 440, 38 F.3d 440">444 (9th Cir. 1994). Failure to timely file a Federal income tax return is due to reasonable cause if the taxpayer exercised ordinary business care and prudence but 2013 Tax Ct. Memo LEXIS 44">*60 nevertheless was unable to file the return within the prescribed time. Seesec. 301.6651-1(c)(1), Proced. & Admin. Regs. *57 Willful neglect means a conscious, intentional failure to file, or reckless indifference toward filing. Boyle, 469 U.S. 241">469 U.S. at 245.

Petitioner admitted that he failed to timely file a return for 2006. In addition, respondent introduced a copy of petitioner's account transcript for 2006 which confirms that petitioner failed to timely file returns for the year at issue. Consequently, we conclude that respondent has satisfied his burden of production under section 7491(c), and petitioner must come forward with evidence sufficient to persuade the Court that respondent's determination is erroneous. Although petitioner testified that he did not timely file his 2006 return because he was involved in litigation in Federal court, we find that he did not have reasonable cause for failing to timely file his return and that he failed to file his return because of willful neglect. See, e.g., Cook v. Commissioner, T.C. Memo. 2012-167. Accordingly, we sustain respondent's determinations as to the section 6651(a)(1) addition to tax for 2006.

Respondent also determined that petitioner 2013 Tax Ct. Memo LEXIS 44">*61 is liable for an addition to tax for failure to pay tax shown on a return under section 6651(a)(2). Section 6651(a)(2) imposes an addition to tax for failure to pay the amount of tax shown on a taxpayer's Federal income tax return on or before the payment due date, unless *58 such failure is due to reasonaU.S.C.ble cause or willful neglect. ^{62013 Tax Ct. Memo LEXIS 44">*62} A failure to pay will be considered due to reasonable cause if the taxpayer makes a satisfactory showing that he exercised ordinary business care and prudence in providing for payment of his tax liability and was nevertheless unable to pay the tax or would suffer undue hardship if he paid on the due date. Seesec. 301.6651-1(c)(1), Proced. & Admin. Regs. The section 6651(a)(2) addition to tax applies only when an amount of tax is shown on a return filed by the taxpayer or prepared by the Secretary. Sec. 6651(a)(2), (g)(2); Cabirac v. Commissioner, 120 T.C. 163">120 T.C. 163, 120 T.C. 163">170 (2003). When a taxpayer has not filed a return, the section 6651(a)(2) addition to tax may not be imposed unless the Secretary has prepared a substitute for return that satisfies the requirements of section 6020(b). See Wheeler v. Commissioner, 127 T.C. 200">127 T.C. 200, 127 T.C. 200">210 (2006), aff'd, 521 F.3d 1289">521 F.3d 1289 (10th Cir. 2008).

Respondent introduced into evidence a substitute for return that satisfies the requirements of section 6020(b), as well as a copy of petitioner's account transcript. The substitute for return and the account transcript establish that petitioner failed to pay the tax shown on the substitute for return. Respondent has satisfied his burden of production under section 7491(c). Petitioner did not *59 introduce any evidence that he was unable to pay the tax owed or that he would have suffered undue hardship if he had paid the tax on the due date. Accordingly, we sustain respondent's determination as to the section 6651(a)(2) addition to tax.

Respondent also determined that petitioner is liable for additions to tax for failure to pay estimated tax under section 6654. Section 6654 imposes an addition to tax on an individual who underpays his estimated tax. ^{72013 Tax Ct. Memo LEXIS 44">*64} The addition to tax is calculated with reference to four required installment payments of the taxpayer's estimated tax liability. Sec. 6654(c) and (d). In general, 2013 Tax Ct. Memo LEXIS 44">*63 each required installment of estimated tax is equal to 25% of the "required annual payment". Sec. 6654(d). A taxpayer has an obligation to pay estimated taxes only if he has a "required annual payment". Wheeler v. Commissioner, 127 T.C. 200">127 T.C. 211-212; see also Mendes v. Commissioner, 121 T.C. 308">121 T.C. 308, 121 T.C. 308">324 (2003). The "required annual payment" is equal to the lesser of (1) 90% of the tax shown on the individual's return for that year (or, if no return is filed, 90% of his tax for such year), seesec. 6654(d)(1)(B)(i)*60 , or (2) if the individual filed a return for the immediately preceding taxable year, 100% of the tax shown on that return, seesec. 6654(d)(1)(B)(ii), see alsosec. 6654(d)(1)(A) and (B) and (C). If, after the Commissioner issues a notice of deficiency for a taxable year, a taxpayer files a return for that year showing no tax due, the Court will disregard the return for purposes of determining whether the taxpayer satisfies "the return-filed safe harbor of section 6654(d)(1)(B)(i)." Mendes v. Commissioner, 121 T.C. 308">121 T.C. 328.

Because petitioner failed to file his 2006 return until after respondent issued the notice of deficiency, we disregard his untimely filed 2006 return. Accordingly, petitioner's required annual payment was equal to the lesser of 90% of his tax for 2006 or, if he filed a return for the immediately preceding taxable year, 100% of the tax shown on that return. Seesec. 6654(d)(1)(B). Respondent introduced a copy of an account transcript showing that petitioner did not file his 2005 return until 2011. Because petitioner did not file his 2005 return until after respondent issued the notice of deficiency for 2006, we disregard his untimely filed 2005 return. Therefore, petitioner's required annual payment was equal to 90% of his tax for 2006. Petitioner failed to make any estimated tax payments for 2006. We therefore sustain respondent's determination as to the section 6654 addition to tax for 2006. *61 We have considered all 2013 Tax Ct. Memo LEXIS 44">*65 the other arguments made by the parties, and to the extent not discussed above, find those arguments to be irrelevant, moot, or without merit.

To reflect the foregoing,

Decision will be entered under Rule 155.