Decision will be entered under Rule 155.
MEMORANDUM OPINION
PANUTHOS, CHIEF SPECIAL TRIAL JUDGE: This case was heard pursuant to the provisions of section 7443A(b)(3) and Rules 180, 181, and 182. 11998 Tax Ct. Memo LEXIS 86">*87 Respondent determined a deficiency in petitioner's 1992 Federal income tax in the amount of $4,158 and an addition to tax under
BACKGROUND
For convenience, we have combined the findings of fact and discussion of pertinent legal issues. Some of the facts have been stipulated, and they are so found. At the time that the petition was filed, petitioner resided at North Bethesda, Maryland.
Petitioner signed her 1992 Federal income tax return on December 14, 1993, and respondent received it on December 17, 1993. Petitioner's return contained numerous mathematical errors. Petitioner reported adjusted gross income in the amount of $32,508.46, while the proper amount should have been $31,463.28. Petitioner claimed expenses on Schedule A in the amount of $23,517, but did not claim these expenses on line 34 of her return (Form 1040). 1998 Tax Ct. Memo LEXIS 86">*88 Instead, petitioner claimed a standard deduction in the amount of $3,000. Respondent corrected the return to reflect the claimed Schedule A expenses on line 34 in lieu of the standard deduction. Lastly, petitioner reported taxable income in the amount of $27,208.46, but her return reflects no income tax liability and requests a refund in the amount of $68.54. After making corrections to petitioner's return, respondent made a computational assessment in the amount of $844. Sec. 6213(b).
Upon examination, respondent disallowed all of the expenses claimed by petitioner on Schedule A of her return. The expenses remaining in issue, after concessions by respondent, are as follows:
Amount Claimed | Amount | Amount in | |
Expense | on Return | Allowed | Issue |
Theft loss | $ 8,660 | -0- | $ 8,660 |
Legal fees | 13,793 | $ 7,278 | 6,515 |
Medical expense | 4,974 | 2,002 | 2,972 |
Charitable contribution | 2,260 | 640 | 1 2,296 |
DISCUSSION
We begin by noting that petitioner bears the burden of proving that respondent's determination is erroneous.
1. THEFT LOSS
Petitioner traveled to Florida for several weeks from December 1992 through January 1993. Included in her belongings were several pieces of jewelry. In early January 1993, petitioner noticed that some of her jewelry was missing. On Schedule A of her 1992 return, petitioner claimed a theft loss in the amount of $8,660, which respondent reduced by computational adjustment to $5,414. Upon examination, respondent disallowed the entire theft loss claimed by petitioner. Petitioner argues that she is entitled to a deduction with respect to the theft loss in the amount of $8,660.
Individual taxpayers may deduct losses arising from fire, storm, shipwreck, or other casualty, or from theft, if the loss is sustained during the taxable year and not compensated by insurance or otherwise.
To meet her burden of proof on this issue, petitioner must establish that a theft or other casualty occurred.
2. LEGAL EXPENSES
Petitioner filed for divorce from her former husband, Donald Summer, in September 1986. The divorce proceedings were acrimonious, and petitioner and Mr. Summer disputed the property of the marital estate. As a result, petitioner, Mr. Summer, and their respective attorneys devoted a great deal of time and effort in an attempt to reach a property settlement agreement, which had not been finalized as of the taxable year in issue.
Petitioner's 1992 return reflects alimony received in the amount of $19,000. 4 Schedule A of petitioner's 1992 return reflects legal expenses paid in the amount of $13,793. The parties have stipulated that petitioner is entitled to deduct as legal expenses $7,278 paid to the law firm of McGee & Gelman in connection with petitioner's lawsuit against Marine Midland Bank. At trial, petitioner argued that she is entitled to deduct additional legal expenses paid to McGee & Gelman in the amount of 1998 Tax Ct. Memo LEXIS 86">*92 $2,122. Given the parties' stipulation and the lack of additional evidence in the record, we conclude that petitioner is entitled to deduct as legal expenses payments made to McGee-Gelman in the amount of $7,278.
The expenses remaining in issue in the amount of $6,515 were paid to the law firm Birzon & Zakia with regard to petitioner's divorce action against her former husband.
Petitioner argues that the legal expenses in issue were paid in order to secure alimony owed to her by her former husband and are, therefore, deductible. At trial, petitioner offered as evidence the billing records of Birzon & Zakia. Petitioner explained that, in accordance with the laws of the State of New York, a party in a divorce proceeding must establish entitlement to alimony by proving that he or she maintained a certain lifestyle during the course of the marriage. Petitioner further explained that many of the billing records in question relate to a 3-day trial which primarily concerned petitioner's entitlement to alimony.
The billing records in question are not sufficient to allow us to ascertain with precision those legal fees which are attributable to petitioner's alimony income. Nevertheless, the record reflects that petitioner paid legal fees in the amount of $9,845 to Birzon & Zakia during the taxable year in issue. Moreover, petitioner's divorce was contentious, and the question of alimony payments was at issue in 1998 Tax Ct. Memo LEXIS 86">*94 the divorce proceedings. See
3. MEDICAL EXPENSES
During the taxable year in issue, petitioner incurred various expenses for medical treatment and health insurance. Respondent has conceded that petitioner paid expenses for medical care in the amount of $716 and for health insurance provided through the Greater Buffalo Chamber of Commerce in the amount of $1,286. Therefore, remaining in issue are medical expenses in the amount of $2,972.
The taxpayer must substantiate any deductions claimed under
A portion of the medical expenses remaining in issue is related to the cost of petitioner's transportation and lodging with regard to medical treatment received in Boston. The record reflects that petitioner received medical treatment at Beth Israel Hospital in Boston on July 7, 1992. Petitioner traveled from her home in Buffalo to Boston to receive 1998 Tax Ct. Memo LEXIS 86">*96 treatment by specialists recommended to her. The record does not reflect the amount paid by petitioner for this treatment, or the date on which petitioner rendered the payment. On July 8, 1992, petitioner was treated at Boston Orthopedic Group, Inc. (BOG), in Brookline, Massachusetts. Included in the expenses allowed by respondent is a check in the amount of $125 written to BOG. Respondent did not allow petitioner to deduct any expenses with respect to her treatment at Beth Israel.
The record reflects that petitioner incurred expenses for transportation and lodging with respect to her stay in Boston from July 4 to July 8, 1992. To prove that she is entitled to deduct her transportation expense, petitioner must establish that her travel was "primarily for and essential to" her medical care.
We now turn to the expenses claimed with respect to lodging. To establish entitlement to expenses for lodging, 1998 Tax Ct. Memo LEXIS 86">*97 a taxpayer must prove that there is no significant element of personal pleasure, recreation, or vacation in the travel.
Although we have concluded that petitioner traveled to Boston with the primary motive of receiving medical care, the record reflects that petitioner received medical treatment at a licensed hospital on July 7, 1992, and orthopedic treatment on July 8, 1992, while the expenses in issue concern lodging from the night of July 4 through July 7, 1992. On the basis of the record before us, we conclude that two of the four nights' lodging were essential to petitioner's medical care. Accordingly, we will allow petitioner to deduct expenses for lodging in the amount of $100, attributable to lodging for two nights at a rate of $50 per night. See
With respect to petitioner's claims for the expenses relating to her treatment at Beth 1998 Tax Ct. Memo LEXIS 86">*98 Israel Hospital in Boston, petitioner has offered no evidence of the amount and date of any payment for such services. Petitioner, therefore, has failed to meet the substantiation requirements provided by
Petitioner has failed to offer evidence concerning the medical treatment underlying the expenses remaining in issue. Petitioner, therefore, has failed to meet her burden of proof with respect to the remaining expenses, and we sustain respondent's determination to that extent.
4. CHARITABLE CONTRIBUTIONS
On her return, petitioner claimed a deduction for charitable contributions in the amount of $2,260. The return reflects cash contributions in the amount of $890 and contributions other than cash in the amount of $1,370. Petitioner submitted a list, prepared before her examination by respondent's agent, of the charitable contributions 1998 Tax Ct. Memo LEXIS 86">*99 which she purportedly made during the taxable year. The total amount reflected on this list, $2,936, exceeds by $676 the amount claimed on her return. 5 To substantiate the deductions claimed, petitioner submitted canceled checks, letters from charitable organizations, and notes prepared before trial consisting of her estimation of the fair market value of donated property; however, these materials relate to only a portion of the deductions claimed. Respondent has allowed petitioner to deduct cash contributions in the amount of $145 and noncash contributions in the amount of $495. Petitioner's claimed contributions, as reflected by her list and by other items in the record, are as follows:
Contributions by Cash or Check | Amount | Amount Allowed |
University of Buffalo | ||
School of Architecture | $ 150 | |
Planned Parenthood | 30 | |
Temple Sinai | 10 | |
Jewish Review | 20 | |
Amherst Police Club | 10 | |
Buffalo Council on World Affairs | 100 | |
March of Dimes | 100 | |
Greater Buffalo Chamber of Commerce | 225 | |
Buffalo Museum of Science | 26 | |
Albright Knox Art Museum | 35 | |
NCCL 1 | 25 | |
731 | $ 145 | |
Contributions of Property | ||
Child & Family Services | $ 50 | |
Erie County Medical Center | 125 | |
Ronald McDonald House | 100 | |
Salvation Army | 975 | |
1,250 | 495 | |
Unspecified 2 | ||
Temple Sinai dues | $ 400 | |
University of Buffalo | 30 | |
United Fund | 25 | |
Buffalo Philharmonic | 60 | |
Metropolitan Museum | 35 | |
United Jewish Fund | 350 | |
Operation Exodus | 50 | |
American Heart Association | 5 | |
Womens (sic) ORT | 25 | -0- |
980 | ||
Total | n1 2,961 | 640 |
A taxpayer making a charitable contribution is required to keep a canceled check, a receipt from the donee organization, or some other reliable written record showing the name of the donee, the date of the contribution, and the amount of the contribution.
With respect to the claimed charitable contributions listed above as "unspecified", petitioner has offered no reliable written records or testimony. Similarly, with respect to the claimed contributions of property, petitioner has offered no reliable written records or testimony to establish that she is entitled to a deduction in excess of the amount allowed by respondent. We, therefore, sustain respondent's determination insofar as it relates to those items.
With respect to petitioner's claimed charitable contributions in cash or by check, it is not entirely clear from the record which items serve as the basis of respondent's allowance. Two items, purported donations to the University of Buffalo School of Architecture and Planning and to the March of Dimes, are not substantiated by a check or letter from the donee which reflects the amount of the donation; 1998 Tax Ct. Memo LEXIS 86">*102 therefore, petitioner has failed to meet her burden of proof with respect to those items.
5. ADDITION TO TAX UNDER
We now address respondent's determination that petitioner is liable for the addition to tax under
Petitioner 1998 Tax Ct. Memo LEXIS 86">*104 argues that reasonable cause existed with respect to her failure to file a timely return because many of the documents she needed to file the return were held by the court in connection with her divorce proceedings. Despite petitioner's assertion, the record reflects that petitioner's divorce proceedings did not end until 1995, long after petitioner filed her return in December 1993. Furthermore, petitioner could have retained copies of the documentation related to her 1992 return before submitting originals to the court which handled her divorce matter. We conclude that petitioner is liable for the addition to tax under
We now turn to the calculation of the addition to tax. The record contains petitioner's Form 4868, "Application for Automatic Extension of Time To File U.S. Individual Income Tax Return", dated April 12, 1993, in which petitioner requested an extension to file until November 1, 1993. Pursuant to
To reflect the foregoing,
Decision will be entered under Rule 155.
1. All section references are to the Internal Revenue Code in effect during the year in issue, unless otherwise indicated. All Rule references are to the Tax Court Rules of Practice and Procedure.
2. Respondent concedes that: (1) Petitioner paid medical expenses in the amount of $2,002, and (2) petitioner is entitled to a miscellaneous itemized deduction for the cost of a safe deposit box in the amount of $65. Respondent made concessions as to other deductions. These concessions are set forth in the discussions relating to the specific issues.↩
1. Although petitioner claimed a deduction for charitable contributions in the amount of $ 2,260 on her return, the record contains a list of petitioner's purported contributions totaling $ 2,936.↩
3. We also note that even if petitioner was able to establish that her jewelry was stolen, she would be entitled to a deduction, if at all, for the taxable year 1993, the year in which she discovered the theft, rather than for the year in issue.
4. By order of the State of New York Supreme Court for the County of Erie, dated Oct. 25, 1989, petitioner was entitled to receive $500 per week for temporary maintenance during pendency of the divorce action.↩
5. Although petitioner's list indicates a total of $2,926, the sum of the items listed is $2,936.↩
1. Although the record contains a canceled check with respect to this item, petitioner's list of charitable contributions claimed on her return does not appear to reflect it. After this item is added to petitioner's list, her total deductions claimed for charitable contri-butions is $ 2,961.↩
2. Petitioner offered no written substantiation or detailed testimony with respect to these items.↩
6. We note that petitioner's request for an automatic extension does not indicate any amount estimated as tax owed for the taxable year. We have previously ruled that requests for extension are invalid where the taxpayer failed to properly estimate the amount of tax owed for the taxable year.