Van Dusen v. Commissioner

JAN ELIZABETH VAN DUSEN, PETITIONER v. COMMISSIONER OF

INTERNAL REVENUE, RESPONDENT

Docket No. 20767–08. Filed June 2, 2011.

P incurred unreimbursed volunteer expenses while caring

for foster cats in her private residence. P’s expenses consisted

primarily of payments for veterinary services, pet supplies,

cleaning supplies, and household utilities. P claimed a

$12,068 charitable-contribution deduction for the expenses on

her 2004 tax return. R issued a notice of deficiency denying

the deduction. R claims that P did not render services to a

qualifying charitable organization under sec. 170(c), I.R.C.,

and that P failed to substantiate her expenses under sec.

170(f)(8), I.R.C., and sec. 1.170A–13, Income Tax Regs. R also

asserts that P’s expenses have an indistinguishable personal

component. Held: P’s foster-cat expenses qualify as unreim-

bursed expenditures incident to the rendition of services to a

charitable organization. See sec. 1.170A–1(g), Income Tax

Regs. P’s services were directed by a charitable organization.

P thus rendered services to a sec. 170(c), I.R.C., organization

when she cared for foster cats in her home. Some of P’s

expenses are disallowed because they are insufficiently

related to foster-cat care or cannot be determined with preci-

sion. Held, further, the recordkeeping requirements of sec.

1.170A–13(a), Income Tax Regs. (for contributions of money),

govern unreimbursed volunteer expenses of less than $250.

Held, further, P’s records meet the requirements of sec.

1.170A–13(a), Income Tax Regs., because they are acceptable

substitutes for canceled checks under the substantial compli-

ance doctrine. See Bond v. Commissioner, 100 T.C. 32 (1993).

P can deduct foster-cat expenses of less than $250. Held, fur-

ther, P cannot deduct foster-cat expenses of $250 or more. P

did not obtain the contemporaneous written acknowledgment

from the charitable organization required under sec. 1.170A–

13(f)(10), Income Tax Regs. Held, further, P can deduct a $100

check donation made to a separate charitable organization.

Jan Elizabeth Van Dusen, pro se.

Christina E. Ciu and Rebecca Duewer-Grenville, for

respondent.

515

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516 136 UNITED STATES TAX COURT REPORTS (515)

MORRISON, Judge: The Commissioner of Internal Revenue

(the IRS) issued a notice of deficiency for the tax year 2004

to petitioner, Jan Elizabeth Van Dusen, determining an

income-tax deficiency of $4,838. The parties settled all issues

except those relating to a $12,068 charitable-contribution

deduction for Ms. Van Dusen’s expenses of taking care of

foster cats. 1

We find that taking care of foster cats was a service per-

formed for Fix Our Ferals, a section 501(c)(3) 2 organization

that specializes in the neutering of wild cats. See infra part

I. Some of Van Dusen’s expenses are categorically not related

to taking care of foster cats and are therefore not deductible.

These expenses are the cost of cremating a pet cat, bar

association dues, and DMV fees. See infra part II. Some of

Van Dusen’s other expenses are not solely attributable to

foster-cat care and are not deductible. These expenses are

the cost of repairing her wet/dry vacuum and her member-

ship dues at a store. See infra part III. Other expenses are

attributable to the services Van Dusen provided to Fix Our

Ferals. These expenses are 90 percent of her veterinary

expenses and pet supplies and 50 percent of her cleaning

supplies and utility bills. See infra part IV.B. Some pay-

ments to Orchard Supply Hardware and Lowe’s for pet sup-

plies, however, are disallowed because the amounts spent on

pet supplies cannot be determined with precision. See infra

part IV.A. In deciding whether Van Dusen kept adequate

records of the expenses attributable to her volunteer services,

we hold that the regulatory requirements for money con-

tributions govern Van Dusen’s expenses of less than $250.

See infra part IV.C.1.a. Van Dusen has met the requirements

for these less-than-$250 expenses. Her records are acceptable

substitutes for canceled checks under the substantial compli-

ance doctrine. See infra part IV.C.1.b. For expenses of $250

or more, however, Van Dusen does not have contempora-

neous written acknowledgment from Fix Our Ferals. See

1 The charitable-contribution deduction for foster-cat expenses was the only item the parties

presented for decision. The record, however, includes documentation of four expenses that are

unrelated to foster-cat care. These expenses are: the cost of cremating a pet cat, bar association

dues, DMV fees, and a $100 check to Island Cat Resources and Adoption. Van Dusen testified

about the pet cat cremation and the $100 check to Island Cat Resources and Adoption, but not

the bar association dues or DMV fees. We address all of these expenses for the sake of complete-

ness.

2 Unless otherwise indicated, all section references are to the Internal Revenue Code in effect

for the year at issue. All Rule references are to the Tax Court Rules of Practice and Procedure.

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(515) VAN DUSEN v. COMMISSIONER 517

infra part IV.C.2. Therefore, these expenses are not deduct-

ible.

We also hold that Van Dusen is entitled to a $100 deduc-

tion for a check donation to Island Cat Resources and Adop-

tion, a section 170(c) organization. See infra part VI.

FINDINGS OF FACT

We adopt the stipulation of facts and its attached exhibits.

Van Dusen, a resident of Oakland, California, is an attorney

who cared for cats in her private residence in 2004. Van

Dusen volunteered for an organization called Fix Our Ferals

and argues that her out-of-pocket expenses for caring for cats

qualify as charitable contributions to that organization. The

parties stipulate that Fix Our Ferals is a section 501(c)(3)

organization. We find that Fix Our Ferals is eligible to

receive tax-deductible contributions under section 170(c). 3

Fix Our Ferals and Trap-Neuter-Return

Fix Our Ferals’ mission is to engage in ‘‘trap-neuter-

return’’ activities, which consist of trapping feral cats, 4

neutering 5 them, obtaining necessary medical treatments

and vaccinations, and releasing them back into the wild. 6

Fix Our Ferals enlists volunteers to perform these tasks. The

volunteers usually return cats to their original neighbor-

hoods, but sometimes cats are moved to safer neighborhoods.

The purpose of trap-neuter-return is to humanely control

feral cat populations and ensure that the cats live in an

environment where people are not hostile to them. Fix Our

Ferals periodically organizes spay/neuter clinics and educates

the public about trap-neuter-return as a solution to neighbor-

hood cat issues.

3 We take judicial notice of IRS Publication 78, Cumulative List of Organizations described

in Section 170(c) of the Internal Revenue Code of 1986, as effective for 2004. See Viralam v.

Commissioner, 136 T.C. 151, 154, 176–177 (2011) (citing IRS Publication 78 as evidence of orga-

nization’s sec. 170(c) status); Jennings v. Commissioner, T.C. Memo. 2000–366 (same), affd. 19

Fed. Appx. 351 (6th Cir. 2001). Fix Our Ferals was listed in IRS Publication 78 in 2004.

4 A feral cat is a nondomesticated cat.

5 ‘‘Neutering’’ refers to the sterilization of animals of both sexes. We use the term interchange-

ably with ‘‘spay/neuter’’.

6 In the context of trap-neuter-return, returning feral cats to the ‘‘wild’’ means returning them

to an outdoor living environment that is generally urban or suburban. The intent is for the cats

to continue to live in human-populated neighborhoods, rather than move to animal-only habi-

tats.

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518 136 UNITED STATES TAX COURT REPORTS (515)

After being neutered, the cats must be temporarily housed

in volunteers’ private residences while they recover. After the

cats recover and have received all necessary medical treat-

ments, they are usually returned to the wild.

Some cats cannot be safely returned to the wild. Typically

those cats are young, sick, injured, elderly, or tame. 7 Those

cats must be cared for domestically. We refer to all care for

trapped cats, including temporary housing while cats are

recuperating from neutering, as ‘‘foster care’’. We refer to

cats under foster care as ‘‘foster cats’’.

Some of the cats are not returned to the wild because they

are already tame. Volunteers try to tame the other cats that

cannot be returned to the wild to make them suitable for

adoption. The volunteers then attempt to place the tame cats

in no-kill shelters or adoptive homes. The success of placing

the tame cats depends on shelter availability and people’s

willingness to adopt.

Although some of the cats that cannot be returned to the

wild are adopted or given to shelters, others remain in foster

care indefinitely. More often these cats are sick, elderly, or

have other problems requiring long-term care. Fix Our Ferals

encourages volunteers to provide long-term care for these

cats in their homes. Foster care, both short and long term,

forms an important part of the organization’s mission.

Fix Our Ferals’ Administrative Structure

Fix Our Ferals is a decentralized organization. It has no

formal administrative office. Instead, it uses a post office box,

a telephone hotline, a website, and other internet- and

phone-based methods of communication.

Fix Our Ferals’ official staff, as far as we can surmise, con-

sists of a board of directors and a team of veterinarians. The

organization relies on a base of volunteers who trap cats,

transport cats, foster cats, staff spay/neuter clinics, educate

the public, screen phone calls, raise funds, and recruit volun-

teers. Some Fix Our Ferals volunteers are members of an

informal internet message group through which they coordi-

nate logistics and assist each other with cat-related issues.

Volunteers also collaborate informally with other cat rescue

groups and individuals. Fix Our Ferals does not commonly

7 Sometimes volunteers capture tame stray cats when they attempt to trap feral cats.

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(515) VAN DUSEN v. COMMISSIONER 519

reimburse volunteers for expenses. It does, however, some-

times provide vouchers for free neutering services. It also

reimburses volunteers for emergency care if complications

arise after a cat has been neutered at a Fix Our Ferals clinic.

Van Dusen’s Role With Fix Our Ferals

Van Dusen was a Fix Our Ferals volunteer in 2004. She

trapped feral cats, had them neutered, obtained vaccinations

and necessary medical treatments, housed them while they

recuperated, and released them back into the wild. She also

provided long-term foster care to cats in her home. She

attempted to place long-term foster cats in one of two no-kill

shelters, Berkeley East Bay Humane Society or East Bay

Society for the Prevention of Cruelty to Animals, 8 or other-

wise find them adoptive homes. Some foster cats, however,

stayed with her indefinitely.

In 2004, Van Dusen had between 70 and 80 cats total, of

which approximately 7 were pets. The pet cats had names,

but the foster cats generally did not. Most cats roamed freely

around Van Dusen’s home (except for bathrooms) and resided

in common areas. Less domesticated cats stayed in a sepa-

rate room called the ‘‘feral room’’. Some cats lived in cages

for taming. Others lived in cages because of illness.

Van Dusen devoted essentially her entire life outside of

work to caring for the cats. Each day she fed, cleaned, and

looked after the cats. She laundered the cats’ bedding and

sanitized the floors, household surfaces, and cages. Van

Dusen even purchased a house ‘‘with the idea of fostering in

mind’’. Her house was so extensively used for cat care that

she never had guests over for dinner.

Van Dusen obtained foster cats primarily through the trap-

neuter-return work that she personally performed. She cap-

tured homeless cats, had them neutered, cared for them

during recovery, and if possible, returned them to the wild.

She housed the cats that could not be returned to the wild

until an adoption opportunity arose. She obtained the rest of

her cats through a loose network of contacts. Some came

from Fix Our Ferals affiliates or from the Fix Our Ferals hot-

8 Van Dusen and other witnesses sometimes referred to this organization as Oakland Society

for the Prevention of Cruelty to Animals.

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520 136 UNITED STATES TAX COURT REPORTS (515)

line or internet message group. Others came from individual

volunteers or other cat rescue organizations.

Van Dusen’s foster care arrangements arose informally,

usually by her personal decision or through a series of phone

calls, emails, internet postings, or in-person conversations.

Some cats that she cared for in 2004 had been under her

care in previous years, during which she belonged to

organizations other than Fix Our Ferals. Van Dusen’s

inability to recall precisely how she acquired each of her cats

makes it difficult to ascertain how many cats are attributable

to a particular organization or contact person. Although Fix

Our Ferals was her primary volunteer affiliation in 2004, she

admits that she did sometimes assist other groups that year.

Van Dusen therefore cannot trace all her foster cats in 2004

to Fix Our Ferals.

Van Dusen’s Cat-Care Expenses

Van Dusen paid out-of-pocket for most of her cat-care

expenses. Vouchers covered some of the neuterings, but Van

Dusen paid all other veterinary expenses including tests,

treatment, vaccines, and surgery.

Van Dusen expended significant amounts on in-home care

as well. She purchased large quantities of pet supplies 9 and

cleaning supplies. 10 She renewed her Costco membership so

she could buy cat food and cleaning supplies at lower prices.

She repaired her wet/dry vacuum so she could easily clean

the floors. Van Dusen incurred higher electricity and gas

bills because she laundered many loads of cat bedding and

ran a special ventilation system to ensure fresh air. The fre-

quent laundering also increased her water bills. Her garbage

bills increased because of the high volume of cat-related

waste. We refer to Van Dusen’s veterinary, pet supply,

cleaning supply, utility, Costco membership renewal, and

wet/dry vacuum repair expenses collectively as her ‘‘cat-care

expenses’’.

A portion of Van Dusen’s cat-care expenses was attrib-

utable to personal use, and the rest was attributable to foster

cats. We refer to the portion of cat-care expenses attributable

9 ‘‘Pet supplies’’ refers to pet food, pet medicine, woodstove pellets (for cat litter), litter boxes,

pet dishes, and other miscellaneous cat-specific supplies.

10 ‘‘Cleaning supplies’’ refers to garbage bags, paper towels, laundry detergent, dish detergent,

and other cat-related supplies that were not exclusively used for cats.

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(515) VAN DUSEN v. COMMISSIONER 521

to foster cats as ‘‘foster-cat expenses’’. The precise amount of

Van Dusen’s foster-cat expenses is unclear because her

records do not distinguish personal expenses from foster-cat

expenses. 11

Van Dusen’s Recordkeeping and Reporting

Van Dusen introduced the following evidence as proof of

her foster-cat expenses: check copies, 12 bank account state-

ments, credit card statements, a Thornhill Pet Hospital client

account history, a Costco purchase history, Pacific Gas &

Electric invoices, a Waste Management payment history (for

garbage removal), and an East Bay Municipal Utility District

billing history (for water). All the data in the documents was

recorded contemporaneously in 2004. Van Dusen states that

she initially had more substantial records of her foster-cat

expenses, namely itemized receipts, but that her tax pre-

parer, Cary Cheng, told her they were unnecessary for pre-

paring her original return. Those records have since dis-

appeared. Van Dusen compiled the documents she introduced

at trial by searching through other records and requesting

records from third parties.

On her 2004 tax return, Van Dusen deducted $12,068 on

Schedule A, Itemized Deductions, for noncash charitable con-

tributions attributable to a ‘‘cat rescue operation’’. The return

stated that the $12,068 comprised $1,381 of supplies, 13

$9,607 of veterinary bills, and $1,080 of utilities. It is unclear

precisely how Van Dusen arrived at these numbers. An

unnamed friend had totaled the ‘‘cat rescue operation’’

expenses using now-missing receipts, but we have no evi-

dence of what method, if any, her friend used to separate

deductible expenses from nondeductible expenses. The friend

prepared a worksheet summarizing the calculations, but this

document is not in evidence. The IRS disallowed the entire

deduction. Van Dusen’s petition asserts that she is entitled

to a deduction of at least $12,068 for foster-cat expenses. On

11 Weaddress the calculation of foster-cat expenses infra pts. III and IV.

12 Werefer to the documents as ‘‘check copies’’ because they are photocopies of carbon copies

of the original checks. After writing the checks, Van Dusen presumably kept the carbon copies

for her records.

13 It is unclear whether ‘‘supplies’’ referred to just pet supplies and cleaning supplies or wheth-

er it also included the cost of renewing Van Dusen’s Costco membership and the cost of repair-

ing her wet/dry vacuum. At trial Van Dusen made clear that she seeks a deduction for all of

these expenses—pet supplies, cleaning supplies, Costco membership renewal, and wet/dry vacu-

um repair.

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522 136 UNITED STATES TAX COURT REPORTS (515)

the basis of her testimony, we believe Van Dusen now seeks

a deduction for the expenses using the following percentage

estimates: 90 percent of veterinary expenses, pet supplies,

paper towels, and garbage bags; and 50 percent of laundry

detergent, dish detergent, utilities, and Costco membership

renewal. See infra part IV.B. Van Dusen also seeks to deduct

the cost of her wet/dry vacuum repair, but her percentage

estimate for this expense is unclear.

OPINION

A taxpayer has the burden of proving the IRS’s determina-

tion of deficiencies incorrect. See Rule 142(a)(1); Welch v.

Helvering, 290 U.S. 111, 115 (1933). The burden shifts to the

IRS if the taxpayer introduces credible evidence with respect

to a factual issue, the taxpayer has complied with the

substantiation requirements of the Internal Revenue Code,

the taxpayer has maintained all required records, and the

taxpayer has cooperated with reasonable IRS requests for

information. Sec. 7491(a). Our conclusions here, however, are

based on the preponderance of the evidence, and thus the

allocation of the burden of proof is immaterial. See Martin

Ice Cream Co. v. Commissioner, 110 T.C. 189, 210 n.16

(1998).

I. Caring for Foster Cats Was a Service to Fix Our Ferals.

Section 170(a) allows a deduction for any ‘‘charitable con-

tribution’’ made by the taxpayer. A ‘‘charitable contribution’’

is defined as ‘‘a contribution or gift to or for the use of ’’ a

charitable organization. Sec. 170(c). A typical charitable con-

tribution is donating money or property directly to a chari-

table organization. A second type of charitable contribution is

placing money or property in trust for a charitable organiza-

tion. Such a transfer is, in the words of section 170(c), a con-

tribution ‘‘for the use of ’’ a charitable organization. See Davis

v. United States, 495 U.S. 472, 485 (1990). A third type of

charitable contribution occurs when a taxpayer performing

services for a charitable organization incurs unreimbursed

expenses. As section 1.170A–1(g), Income Tax Regs., states:

‘‘No deduction is allowable under section 170 for a contribu-

tion of services. However, unreimbursed expenditures made

incident to the rendition of services to an organization con-

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(515) VAN DUSEN v. COMMISSIONER 523

tributions to which are deductible may constitute a deduct-

ible contribution.’’ 14

Van Dusen did not contribute money or property directly

to Fix Our Ferals. Van Dusen did not place property in trust

for Fix Our Ferals or enter into a formal arrangement giving

the organization legal rights to her property. Instead she

paid third parties for veterinary services, pet supplies,

cleaning supplies, utilities, Costco membership renewal, and

wet/dry vacuum repair. Thus Van Dusen is entitled to a

charitable-contribution deduction only if these expenses

were, in the words of section 1.170A–1(g), Income Tax Regs.,

‘‘expenditures made incident to the rendition of services’’ to

Fix Our Ferals.

The IRS contends that Van Dusen was an independent cat

rescue worker whose services were unrelated to Fix Our

Ferals and did not benefit the organization. We reject this

assertion, finding that Van Dusen’s care for foster cats con-

stituted services to Fix Our Ferals.

In determining whether a taxpayer has provided services

to a particular organization, courts consider the strength of

the taxpayer’s affiliation with the organization, the organiza-

tion’s ability to initiate or request services from the taxpayer,

the organization’s supervision over the taxpayer’s work, and

the taxpayer’s accountability to the organization. See, e.g.,

Smith v. Commissioner, 60 T.C. 988 (1973); Saltzman v.

Commissioner, 54 T.C. 722 (1970). For example, Smith v.

Commissioner, supra at 993–995, held that church members

could deduct evangelism travel expenses even though their

church never initiated, controlled, supervised, or assisted

with the trips. The church encouraged missionary work in

general; and before the taxpayers embarked on a trip, the

church gave them letters of commendation, which evidenced

the church’s approval and served as introductions to

intrafaith groups during the trip. Id. at 993. Additionally,

after each trip the church members reported back to the

14 The expenses of rendering services are deductible because they constitute contributions ‘‘to’’

the charitable organization. Rockefeller v. Commissioner, 676 F.2d 35, 42 (2d Cir. 1982) (in de-

termining whether unreimbursed volunteer expenses were governed by a statutory provision of

the 1954 Code that treated favorably contributions ‘‘to’’ a charitable organization, court held that

unreimbursed volunteer expenses were contributions ‘‘to’’—not ‘‘for the use of ’’—a charitable or-

ganization), affg. 76 T.C. 178 (1981); see also Davis v. United States, 495 U.S. 472, 486–488

(1990) (in holding that no deduction is available when a taxpayer pays a service provider’s ex-

penses, Court stated that unreimbursed expenses of rendering services are contributions ‘‘to’’ a

charitable organization within the meaning of section 170(c)).

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524 136 UNITED STATES TAX COURT REPORTS (515)

church, which then publicized their efforts and accomplish-

ments to other congregations. Id. By contrast, in Saltzman v.

Commissioner, supra, the taxpayer’s activities had much

looser ties to the charitable organization. The taxpayer was

the leader of the Harvard-Radcliffe Hillel Folk Dance Group.

Id. at 722. Without the organization’s asking him, he trav-

eled alone to Europe and Pittsburgh to attend folk dance fes-

tivals that were not sponsored by the organization. Id. at

723. We held that the taxpayer had not provided services to

the organization, partly because the organization had not

directed or encouraged him to attend the festivals. Id. at 724.

Van Dusen has demonstrated a strong connection with Fix

Our Ferals. She was a regular Fix Our Ferals volunteer who

performed substantial services for the organization in 2004.

She engaged in both trapping and foster care and worked

closely with other Fix Our Ferals volunteers. Fix Our Ferals

could initiate or request services from Van Dusen through

individual volunteers, who would contact her by phone or by

internet. 15 Like the church in Smith, Fix Our Ferals encour-

aged and indirectly oversaw Van Dusen’s work. See Smith v.

Commissioner, supra at 994 (‘‘Nothing in section 170 or in

section 1.170–2(a)(2) of the regulations * * * suggests that,

as a condition to the deductibility of unreimbursed, service-

related expenses, the services must be performed under the

control or supervision of the charitable organization.’’). 16

Van Dusen’s inability to trace her cat rescue work exclu-

sively to Fix Our Ferals does not pose an insurmountable bar

to deductibility. We find that she performed most of her work

in 2004 for Fix Our Ferals. Moreover, all of the other

organizations with which she was affiliated, and therefore to

which she may have provided services, qualify as section

170(c) organizations. 17

15 Fix Our Ferals volunteers regularly received requests for assistance and would solicit help

from other volunteers on behalf of third parties. If volunteers encountered problems during their

work, they would also contact other volunteers for assistance.

16 Sec. 1.170–2(a)(2), Income Tax Regs., was the predecessor to sec. 1.170A–1(g), Income Tax

Regs., the provision that currently allows taxpayers to deduct unreimbursed volunteer expenses.

17 These organizations are: Island Cat Resources and Adoption, Berkeley East Bay Humane

Society, East Bay Society for the Prevention of Cruelty to Animals, and Second Chance Cat Res-

cue. All of these organizations were listed in IRS Publication 78 in 2004. See Jennings v. Com-

missioner, T.C. Memo. 2000–366 (concluding that donees were not sec. 170(c) organizations be-

cause they were not listed in IRS Publication 78); supra note 3 (taking judicial notice of IRS

Publication 78, a cumulative list of sec. 170(c) organizations).

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(515) VAN DUSEN v. COMMISSIONER 525

The IRS also contends that even if Van Dusen was affili-

ated with Fix Our Ferals, Fix Our Ferals’ mission consists

solely of ‘‘education and sterilization’’, and therefore fostering

cats could not constitute services to Fix Our Ferals. As our

fact findings explained, however, the organization’s mission

encompasses foster care. Fix Our Ferals actively recruits vol-

unteers to foster cats during spay/neuter recovery, and it

encourages volunteers to provide sanctuary for cats requiring

long-term care. Thus Van Dusen served Fix Our Ferals’ mis-

sion by fostering cats. The remainder of this Opinion con-

siders which of Van Dusen’s expenses are deductible as inci-

dental to foster-cat volunteer work.

II. Pet-Cat Cremation Expense, Bar Association Dues, and

DMV Fees

As we have found, Van Dusen rendered services to Fix Our

Ferals. To be deductible, unreimbursed expenses must be

directly connected with and solely attributable to the ren-

dition of services to a charitable organization. E.g., Saltzman

v. Commissioner, 54 T.C. at 724; Babilonia v. Commissioner,

T.C. Memo. 1980–207, affd. per curiam 681 F.2d 678 (9th

Cir. 1982). In applying this standard, courts have considered

whether the charitable work caused or necessitated the tax-

payer’s expenses. For example, in Orr v. United States, 343

F.2d 553, 557–558 (5th Cir. 1965), the court disallowed

deductions for the expenses of insuring and repairing two

vehicles because the expenses were not solely attributable to

charitable use. The taxpayer had used the vehicles partly for

personal use and would have incurred the expenses regard-

less of any charitable work. Id. Similarly, in McCollum v.

Commissioner, T.C. Memo. 1978–435, we denied National Ski

Patrol volunteers’ deductions for ski equipment because the

volunteers owned the equipment and could use it for per-

sonal recreation. We also denied deductions for motor home

use and food given to non-volunteering family members. Id.

And in Smith v. Commissioner, 60 T.C. at 995, we disallowed

meal, laundry, and camping expenses incurred for non-pros-

elytizing children who had accompanied the taxpayers on an

evangelical mission.

Van Dusen’s documentation includes the following non-

foster-cat expenses: an $85 credit card charge to Bubbling

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526 136 UNITED STATES TAX COURT REPORTS (515)

Well Pet Memorial, a $170 check to the California State Bar

Association, and a $146 check to the ‘‘DMV’’. The $85 charge

to Bubbling Well Pet Memorial is not deductible because this

expense was for the cremation of a pet cat. The checks to the

California State Bar Association and the DMV are not deduct-

ible because they are not charitable expenses.

III. Costco Membership Dues and Wet/Dry Vacuum Repair

Van Dusen has not shown that any portion of her Costco

membership dues or wet/dry vacuum repair costs constitutes

an exclusively charitable expense. Like the vehicles in Orr v.

United States, supra, the Costco membership and the wet/dry

vacuum served both personal and charitable purposes. We

conclude that Van Dusen would have paid for her Costco

membership and repaired her vacuum even if she had not

fostered cats. Thus these expenses were not directly con-

nected with and solely attributable to charitable activities.

IV. Veterinary Expenses, Pet Supplies, Cleaning Supplies, 18

and Utilities

One broad category of Van Dusen’s expenses—veterinary

expenses, pet supplies, cleaning supplies, and utilities—was

partly incidental to her services to Fix Our Ferals. If Van

Dusen had not fostered cats, she would have paid for fewer

veterinary services, fewer pet supplies, and fewer cleaning

supplies. Her utility bills would have been significantly lower

because she would not have had to run a special ventilation

system, do as much laundry, or dispose of as much cat waste.

We find that the portions of these expenses attributable to

caring for foster cats were directly connected with and solely

attributable to Van Dusen’s services to Fix Our Ferals.

A. Some Payments to Orchard Supply Hardware and

Lowe’s Must Be Categorically Disallowed.

Van Dusen purchased bags of woodstove pellets from

Orchard Supply Hardware and Lowe’s. She used woodstove

pellets as cat litter. Unfortunately, Van Dusen’s documents

show only the total payment she made for each visit to these

stores. Her documents do not reveal what items she pur-

18 See definitions of ‘‘pet supplies’’ and ‘‘cleaning supplies’’, supra notes 9 and 10.

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(515) VAN DUSEN v. COMMISSIONER 527

chased. 19 Thus the documents alone do not show how much

she spent on pellets. She does not claim that she purchased

any other items whose costs would be deductible. We there-

fore must determine, on the basis of her testimony, what por-

tions of her payments to the two stores were for pellets.

In determining the amounts that Van Dusen spent on pel-

lets from Orchard Supply Hardware and Lowe’s, we divide

her shopping trips to these stores into two types. With the

first type of shopping trip, the amount of each payment was

an exact multiple of $4.55625, the price of one bag of pel-

lets. 20 The payments for this type of trip are:

• check nos. 1405, 1421, 1433, 1451, and 1461; and

• Orchard Supply Hardware purchases on October 12,

October 19, November 22, and November 30, 2004, as

reflected in Van Dusen’s bank statements.

We believe that, on the first type of shopping trip, Van

Dusen indeed purchased bags of pellets and nothing else.

With the second type of shopping trip, the amount of each

payment was not an exact multiple of the $4.55625 price of

a bag of pellets. For each trip, Van Dusen testified as to how

much she spent on pellets. She claimed that she either (1)

purchased eight bags of pellets for $36.45 ($4.55625/bag × 8

bags), or (2) purchased the maximum number of bags of pel-

lets that could have been purchased with the dollar amount

spent. 21 While we generally find Van Dusen a credible wit-

ness, Van Dusen provides no basis for us to presume that

every trip involved the purchase of either (1) eight bags of

pellets, or (2) as many bags of pellets as could be purchased

19 Van Dusen had other payees besides Orchard Supply Hardware and Lowe’s. For one of the

other payees—Costco—Van Dusen introduced a document that described each item she pur-

chased. For the other payees, Van Dusen does not have documents showing what items she pur-

chased, but this fact is insignificant because it is evident that the payments were entirely re-

lated to cat care. For example, her payments to a veterinarian were entirely for cat medical

care.

20 We determined the per-bag cost of pellets by dividing $36.45 by 8. Van Dusen testified

credibly that the cost of eight bags of pellets in 2004 was $36.45. This amount appeared fre-

quently in her documentation as the amount she paid to Orchard Supply Hardware. We believe

that the amount $36.45 includes the sales tax on the purchase, which is why dividing $36.45

by 8 yields a number that includes a fraction of a penny (as opposed to a round number).

21 For instance, check no. 1341 shows Van Dusen paid $33.52 to Orchard Supply Hardware.

Van Dusen testified that on the check no. 1341 shopping trip, she bought seven bags of pellets

for $31.90 (and presumably spent the remaining $1.62 on other things). She apparently com-

puted the $31.90 amount by multiplying $4.55625 by 7. The product of 7 and $4.55625 turns

out to be $31.89375, which, rounded to the nearest cent, is $31.89.

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528 136 UNITED STATES TAX COURT REPORTS (515)

by the payment amount reflected on her documentation. 22

Therefore, we exclude the following payments from calcula-

tion:

• check nos. 1215, 1225, 1234, 1253, 1289, 1335, 1341,

1351, 1368, 1382, 1389, and 1478;

• Orchard Supply Hardware purchases on May 15 and

June 6, 2004, as reflected in Van Dusen’s credit card state-

ments; 23 and

• an Orchard Supply Hardware purchase on October 6,

2004, as reflected in Van Dusen’s bank statements.

B. Percentages of Veterinary Expenses, Pet Supplies,

Cleaning Supplies, and Utility Bills Attributable

to Foster-Cat Care

Of the expenses for veterinary care, pet supplies, cleaning

supplies, and household utilities, we have explained that

some of the expenses (i.e., some of the Orchard Supply Hard-

ware and Lowe’s purchases) must be disallowed entirely. Of

the remaining amounts, we must consider what portions

were attributable to foster-cat care. Van Dusen estimates

that foster cats were responsible for the following percent-

ages of expenses:

• 90 percent of veterinary expenses,

• 90 percent of pet supplies,

• 90 percent of paper towels and garbage bags,

• 50 percent of laundry detergent and dish detergent, and

• 50 percent of household utility bills. 24

Van Dusen’s percentage estimates for veterinary expenses

and pet supplies are reasonable. Van Dusen had about 7 pet

cats and 70 to 80 total cats in 2004. In general, the cat-care

costs were distributed equally among pet cats and foster

cats. 25 Thus we conclude that approximately 90 percent of

22 We believe Van Dusen chose eight bags of pellets as an estimate because the cost of eight

bags—$36.45—is the most common amount in her documentation for Orchard Supply Hardware

purchases. However, we are not convinced that Van Dusen purchased eight bags of pellets so

regularly that $36.45 can be used as a default estimate for shopping trips.

23 Unless otherwise stated, dates regarding Van Dusen’s credit card statements refer to the

transaction date, not the posting date.

24 Van Dusen also estimates that 50 percent of the cost of her Costco membership renewal

was attributable to foster cats. We do not discuss the Costco membership renewal here because

we find that no portion of it was attributable to foster cats. See supra pt. III. For the same

reason, we do not discuss the wet/dry vacuum repair (for which Van Dusen’s percentage esti-

mate is unclear).

25 Van Dusen testified that the foster cats caused a disproportionate amount of the veterinary

expenses. However, she has not indicated a basis for determining the precise percentage of vet-

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(515) VAN DUSEN v. COMMISSIONER 529

the veterinary and pet supply expenses was attributable to

foster cats.

We determine that 50 percent of Van Dusen’s cleaning

supply and utility expenses was attributable to foster cats.

Van Dusen believes the foster cats actually accounted for

around 75 percent, 80 percent, or even 90 percent of her

cleaning and utility expenses. However, she cannot prove

precisely how much the foster cats contributed to these

expenses. We determine that all the cleaning supplies—paper

towels, garbage bags, laundry detergent, and dish deter-

gent—should be counted using the same percentage estimate.

Van Dusen has not shown why paper towels and garbage

bags had a smaller personal use component than laundry

detergent and dish detergent. We consider 50 percent a suffi-

ciently conservative estimate to ensure that no personal

expenses are counted. Van Dusen ran a large-scale foster cat

operation. The number of cats in her home caused consider-

able expenses. She laundered bedding several times a week,

and she frequently sanitized floors and surfaces. She also ran

a special ventilation system and disposed of all cat-related

waste. Under these circumstances, it seems highly unlikely

that foster cats accounted for less than 50 percent of her

cleaning and utility expenses.

We find that 90 percent of the veterinary expenses, 90 per-

cent of the pet supplies, 50 percent of the cleaning supplies,

and 50 percent of the utility bills are foster-cat expenses and

therefore charitable. These percentage estimates apply to

Orchard Supply Hardware and Lowe’s expenses only to the

extent that Van Dusen’s documentation provides a precise

amount for each cat-care expense. See supra part IV.A. The

table below lists Van Dusen’s payees and the expense cat-

egory into which we classify Van Dusen’s payments to them

(i.e., veterinary expenses, pet supplies, cleaning supplies, or

utilities):

Payee Foster-cat expense category

Thornhill Pet Hospital Veterinary expenses

St. Louis Vet Clinic Veterinary expenses or

pet supplies1

Bay Area Veterinary Specialist Veterinary expenses

Berkeley Dog and Cat Hospital Veterinary expenses

erinary expenses attributable to foster cats. We therefore treat veterinary expenses as if they

were incurred proportionally between pet cats and foster cats.

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530 136 UNITED STATES TAX COURT REPORTS (515)

Payee Foster-cat expense category

Deanne Jarvis Veterinary expenses

Revival Animal Health Veterinary expenses or

pet supplies1

Orchard Supply Hardware Pet supplies

Lowe’s Pet supplies

Pet Vet Pet Food Veterinary expenses or

pet supplies1

Pet Club Pet supplies

Costco Pet supplies or cleaning

supplies (item by item)

Pacific Gas & Electric Utilities

Waste Management Utilities

East Bay Municipal Utility District Utilities

1 It is unnecessary to determine the precise category under which

each payment falls because both veterinary expenses and pet supplies

are 90 percent charitable.

Van Dusen’s foster-cat expenses, however, are deductible

only to the extent that she has substantiated them, a point

we consider next.

C. Whether Van Dusen’s Expenses Are Adequately Substan-

tiated

Charitable deductions are subject to the recordkeeping

requirements of section 1.170A–13(a), Income Tax Regs., for

contributions of money, or section 1.170A–13(b), Income Tax

Regs., for contributions of non-money property. Contributions

of $250 or more must satisfy not only these recordkeeping

requirements, but also the requirements of section 1.170A–

13(f)(1), Income Tax Regs. 26 Therefore, we divide Van

Dusen’s expenses into expenses of less than $250 and

expenses of $250 or more. We evaluate whether each expense

satisfies the requirements for its category.

1. Van Dusen Has Met the Recordkeeping Requirements for

Her Foster-Cat Expenses of Less Than $250.

a. Unreimbursed Volunteer Expenses of Less Than $250 Are

Governed by Section 1.170A–13(a), Income Tax Regs.,

Not Section 1.170A–13(b), Income Tax Regs.

Section 1.170A–13, Income Tax Regs., divides contributions

of less than $250 into only two categories: ‘‘contributions of

26 The requirements of sec. 1.170A–13(f)(1), Income Tax Regs., do not apply to separate con-

tributions of less than $250 made to the same donee, even if the aggregate donations to the

donee exceed $250 within the same taxable year.

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(515) VAN DUSEN v. COMMISSIONER 531

money’’ and ‘‘contributions of property other than money’’.

See sec. 1.170A–13(a) and (b), Income Tax Regs. The regula-

tions do not expressly state whether a contribution through

the payment of unreimbursed volunteer expenses is subject

to the requirements for contributing money set forth in sec-

tion 1.170A–13(a), Income Tax Regs., the requirements for

contributing non-money property set forth in section 1.170A–

13(b), Income Tax Regs., or neither set of requirements. The

idea that unreimbursed volunteer expenses are free from

recordkeeping requirements is implausible. Therefore, one of

the two sets of rules must govern those expenses.

Of the two sets of recordkeeping rules, we hold that section

1.170A–13(a), Income Tax Regs.—which sets forth the record-

keeping rules for money contributions—contains the relevant

rules for determining whether unreimbursed volunteer

expenses are deductible. These rules, and not the rules for

non-money contributions, apply to unreimbursed volunteer

expenses for several reasons. 27 First, the substantiation

requirements for expenses of $250 or more, which are found

in section 1.170A–13(f)(10), Income Tax Regs., implicitly cat-

egorize unreimbursed expenses as cash contributions by sub-

jecting them to the requirements of section 1.170A–13(a),

Income Tax Regs. 28 Second, unreimbursed expenses are

similar to money contributions because taxpayers who serve

as volunteers usually use money to purchase goods or serv-

ices. 29 Third, if the rules for non-money contributions in sec-

tion 1.170A–13(b), Income Tax Regs., were interpreted to

govern unreimbursed volunteer expenses, they would require

27 In Cavalaris v. Commissioner, T.C. Memo. 1996–308, we cited sec. 1.170A–13(a), Income

Tax Regs., without further analysis, in considering the deductibility of unreimbursed volunteer

expenses.

28 For contributions of $250 or more, sec. 1.170A–13(f)(1), Income Tax Regs., requires the tax-

payer to acquire and maintain the charity’s written acknowledgment of the contribution. Such

an acknowledgment must include ‘‘The amount of any cash the taxpayer paid and a description

(but not necessarily the value) of any property other than cash the taxpayer transferred to the

donee organization’’. Sec. 1.170A–13(f)(2), Income Tax Regs. However, for taxpayers who incur

unreimbursed expenditures incident to the rendition of charitable services, sec. 1.170A–13(f)(10),

Income Tax Regs., provides that the required acknowledgment need only include a ‘‘description

of the services provided by the taxpayer’’, so long as the taxpayer has adequate records under

sec. 1.170A–13(a), Income Tax Regs., ‘‘to substantiate the amount of the expenditures’’.

29 The IRS treats unreimbursed volunteer expenses as cash contributions in instructing tax-

payers how to complete their returns. The IRS instructions for Form 8283, Noncash Charitable

Contributions, instruct taxpayers not to use the form for out-of-pocket volunteer expenses. In-

stead the instructions tell taxpayers to treat out-of-pocket expenses as cash contributions. IRS

instructions, however, generally carry no authoritative weight. See Merlo v. Commissioner, 126

T.C. 205, 211 n.10 (2006), affd. 492 F.3d 618 (5th Cir. 2007); Zimmerman v. Commissioner, 71

T.C. 367, 371 (1978), affd. without published opinion 614 F.2d 1294 (2d Cir. 1979).

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532 136 UNITED STATES TAX COURT REPORTS (515)

information that would not be helpful in a subsequent audit

or litigation about the propriety of a charitable-contribution

deduction. See Bond v. Commissioner, 100 T.C. 32, 41 (1993)

(‘‘the reporting requirements of section 1.170A–13, Income

Tax Regs., are helpful to * * * [the IRS] in the processing

and auditing of returns on which charitable deductions are

claimed’’). The rules for non-money contributions require a

taxpayer who lacks a donee receipt to keep written records

of:

• the value of the property,

• the cost of the property,

• any previous contributions by the taxpayer of a partial

interest in the contributed property, and

• any restrictions the taxpayer has placed on the use of

the property.

Sec. 1.170A–13(b)(2)(ii), Income Tax Regs. 30 These facts are

generally irrelevant to the deductibility of unreimbursed vol-

unteer expenses. Such expenses involve a monetary payment

by the taxpayer for which the taxpayer seeks a deduction

equal to the monetary outlay. We conclude that the record-

keeping requirements for money contributions in section

1.170A–13(a), Income Tax Regs., govern Van Dusen’s foster-

cat expenses. 31

30 If a taxpayer contributing non-money property has a receipt from the donee organization,

the receipt need only contain: (i) the name of the donee, (ii) the date and location of the con-

tribution, and (iii) ‘‘A description of the property in detail reasonably sufficient under the cir-

cumstances.’’ Sec. 1.170A–13(b)(1), Income Tax Regs. The receipt need not contain certain infor-

mation (listed above) that is required by sec. 1.170A–13(b)(2)(ii), Income Tax Regs. Because Van

Dusen lacks a donee receipt, we use the rules for non-money contributions without a receipt

as the point of comparison.

31 We recognize that the recordkeeping rules for money contributions are also not well suited

to unreimbursed volunteer expenses. The rules for money contributions provide that records

showing the name of the donee are acceptable substitutes for canceled checks. Sec. 1.170A–

13(a)(1)(iii), Income Tax Regs. This reflects the assumption that records showing the name of

the donee provide the same information as canceled checks. This assumption is correct for

money contributions because a canceled check reflects the name of the donee. But for unreim-

bursed volunteer expenses, a canceled check reflects the name of the payee, not the donee. Thus

a record of the name of the donee would not reflect the same information as a canceled check.

Van Dusen’s documents do not indicate the name of the donee.

We hold that the recordkeeping requirements of sec. 1.170A–13(a), Income Tax Regs., govern

unreimbursed volunteer expenses of less than $250 in order to avoid the implausible result that

such expenses would be free from recordkeeping requirements. Of the two provisions that could

govern unreimbursed volunteer expenses of less than $250, we believe sec. 1.170A–13(a), Income

Tax Regs., is more suitable for the reasons stated in the text.

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(515) VAN DUSEN v. COMMISSIONER 533

b. Van Dusen’s Documentation Meets the Recordkeeping

Requirements of Section 1.170A–13(a), Income Tax

Regs.

Section 1.170A–13(a)(1), Income Tax Regs., requires the

taxpayer to maintain one of the following:

(i) A cancelled [sic] check.

(ii) A receipt from the donee charitable organization showing the name

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

tion. A letter or other communication from the donee charitable organiza-

tion acknowledging receipt of a contribution and showing the date and

amount of the contribution constitutes a receipt * * * .

(iii) In the absence of a canceled check or receipt from the donee chari-

table organization, other reliable written records showing the name of the

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

In determining whether Van Dusen has substantiated her

payments for veterinary services, pet supplies, cleaning sup-

plies, and utilities, we look to the following records that Van

Dusen introduced into evidence: check copies, 32 bank account

statements, credit card statements, a Thornhill Pet Hospital

client account history, a Costco purchase history, Pacific Gas

& Electric invoices, a Waste Management payment history,

and an East Bay Municipal Utility District billing history. 33

We find that Van Dusen’s records are sufficient to substan-

tiate all her foster-cat expenses of less than $250.

Van Dusen’s documents are not canceled checks 34 or

receipts from the donee charitable organization, Fix Our

Ferals. Nor are her documents ‘‘other reliable written

records’’, which are defined by section 1.170A–13(a)(1)(iii),

Income Tax Regs., as records that show ‘‘the name of the

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

contribution.’’ Van Dusen’s documents do not show the name

of the donee, which is Fix Our Ferals. Instead they show the

names of the entities she paid. Van Dusen’s documents do

32 See

supra note 12 for an explanation of why we refer to the documents as ‘‘check copies’’.

33 Weassume all of these documents have been properly ‘‘[maintained]’’ within the meaning

of sec. 1.170A–13(a)(1), Income Tax Regs. The IRS does not argue that the ‘‘maintain’’ require-

ment means Van Dusen had to keep records continuously from the time she incurred the ex-

penses. Rather, the IRS contends that Van Dusen’s documents do not satisfy the substantiation

requirements regardless of how long they were kept.

34 A canceled check is ‘‘A check bearing a notation that it has been paid by the bank on which

it was drawn.’’ Black’s Law Dictionary 269 (9th ed. 2009). Van Dusen’s check copies bear no

such notation and thus are not canceled checks. Rather, they are photocopies of carbon copies

of the original checks. See supra note 12.

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534 136 UNITED STATES TAX COURT REPORTS (515)

not show the amounts of her contributions to Fix Our Ferals.

Instead they show the amounts of her cat-care expenses,

which invariably have a nondeductible component because

some of her cats were pet cats. Thus Van Dusen’s documents

do not strictly comply with section 1.170A–13(a)(1), Income

Tax Regs.

Nonetheless, we find that Van Dusen has substantially

complied with section 1.170A–13(a)(1), Income Tax Regs. We

analogize Van Dusen’s situation to that of the taxpayer in

Bond v. Commissioner, 100 T.C. 32 (1993). In Bond, a tax-

payer donated two blimps to a charitable organization. Id. at

33. Section 1.170A–13(c)(2)(i), Income Tax Regs., required

him to obtain a document appraising the two blimps. Id. at

38–39. The regulation required that the appraisal document

contain specific items of information. Id. The taxpayer failed

to obtain a separate written appraisal. Id. at 34. However,

the taxpayer attached a Form 8283, Noncash Charitable

Contributions, on which an appraiser had recorded informa-

tion about the value of the two blimps. Id.

Bond distinguished between a regulatory requirement

relating to ‘‘the substance or essence of the statute’’, strict

adherence to which is mandatory, and a requirement that is

merely ‘‘procedural or directory’’, which may be satisfied by

substantial compliance. Id. at 41. Bond held that the

reporting requirements of section 1.170A–13, Income Tax

Regs., are directory and require only substantial compliance.

Id. The Court further held that because substantially all of

the information required in an appraisal document was

recorded on the Form 8283, the taxpayer had complied with

the regulatory requirement to obtain an appraisal document.

Id. at 42.

Returning to Van Dusen, the relevant regulatory require-

ment is section 1.170A–13(a)(1), Income Tax Regs., which

allows a taxpayer to rely on canceled checks to record con-

tributions of money. Under Bond, Van Dusen’s documents

are legitimate substitutes for canceled checks. Van Dusen

produced records of her expenses which contained all of the

information that would have been on a canceled check. Her

records show the name of the payee, the date of the payment,

and the amount of the payment. (A canceled check by a vol-

unteer generally reflects the name of the payee, but it does

not reflect the name of the charitable organization to which

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(515) VAN DUSEN v. COMMISSIONER 535

the volunteer’s services are rendered. It might be useful for

the volunteer to keep records of the name of the charitable

organization, but it is not our role to impose such a require-

ment in the absence of a specific regulatory requirement.)

Therefore, Van Dusen has substantially complied with sec-

tion 1.170A–13(a)(1), Income Tax Regs.

An objection might be raised that the substantial compli-

ance doctrine should not apply to Van Dusen because section

1.170A–13(a)(1), Income Tax Regs., specifies what records are

valid substitutes for canceled checks. The regulation states

that the taxpayer can maintain a canceled check, a receipt

from the donee, or ‘‘In the absence of a canceled check or

receipt from the donee charitable organization, other reliable

written records showing the name of the donee, the date of

the contribution, and the amount of the contribution.’’ Id. In

specifying what documents are valid substitutes for canceled

checks, though, the regulation was plainly not written with

unreimbursed volunteer expenses in mind. It requires sub-

stitute records to reflect the name of the donee, even though

canceled checks for unreimbursed volunteer expenses would

reflect the name of the payee. It requires substitute records

to reflect the amount of the contribution, even though can-

celed checks for unreimbursed volunteer expenses often

reflect a nondeductible component. 35 Van Dusen’s documents

fail to qualify as ‘‘other reliable written records’’ only because

the regulation was not written with unreimbursed volunteer

expenses in mind. 36 This failure should not preclude the

application of the substantial compliance doctrine in Bond.

35 As noted above, sec. 1.170A–13(f)(10), Income Tax Regs., partially incorporates the require-

ments of sec. 1.170A–13(a), Income Tax Regs., for unreimbursed volunteer expenses of $250 or

more. See supra note 28. In what appears to be an attempt to correct the inadequacies of sec.

1.170A–13(a), Income Tax Regs., as a recordkeeping requirement for unreimbursed volunteer ex-

penses, sec. 1.170A–13(f)(10), Income Tax Regs., specifies that sec. 1.170A–13(a), Income Tax

Regs., need be satisfied only to the extent necessary ‘‘to substantiate the amount of the expendi-

tures’’. (Emphasis added.)

36 ‘‘[O]ther reliable written records’’ must, by definition, also be ‘‘reliable’’. Their reliability is

determined by the circumstances, including whether the records were contemporaneous and

whether the records were regularly kept. Sec. 1.170A–13(a)(2)(i), Income Tax Regs. Further-

more, the information required by sec. 1.170A–13(a)(1)(iii), Income Tax Regs. (the ‘‘other reliable

written records’’ provision), must be stated on the taxpayer’s return if required by the return

form or its instructions. Sec. 1.170A–13(a)(2)(ii), Income Tax Regs.

Van Dusen’s records satisfy the reliability requirement of sec. 1.170A–13(a)(2)(i), Income Tax

Regs. The documents were made contemporaneously and in the course of regular recordkeeping.

The check copies faithfully duplicate the original checks, which Van Dusen wrote in 2004. Van

Dusen’s credit card company, Van Dusen’s bank, and Pacific Gas & Electric issued her state-

ments in 2004 based on electronic compilations of transactions at the time. Similarly, Thornhill

Continued

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536 136 UNITED STATES TAX COURT REPORTS (515)

We conclude that Van Dusen has substantiated all the vet-

erinary, pet supply, cleaning supply, and utility expenses of

less than $250. As discussed earlier, these expenses must be

adjusted to exclude amounts not attributable to foster-cat

care. After such adjustments are made, Van Dusen can

deduct 90 percent of her less-than-$250 veterinary and pet

supply expenses and 50 percent of her less-than-$250

cleaning supply and utility expenses.

2. Van Dusen Has Not Met the Substantiation Require-

ments for Her Foster-Cat Expenses of $250 or More.

To claim a charitable-contribution deduction of $250 or

more, the taxpayer must substantiate the contribution with

a contemporaneous written acknowledgment from the donee

organization. Sec. 170(f)(8)(a); sec. 1.170A–13(f)(1), Income

Tax Regs. A taxpayer who incurs unreimbursed expenses

‘‘incident to the rendition of services’’ is treated as having

obtained a contemporaneous written acknowledgment if the

taxpayer: (1) ‘‘Has adequate records under * * * [section

1.170A–13(a), Income Tax Regs.] to substantiate the amount

of the expenditures’’, and (2) acquires a contemporaneous

statement from the donee organization containing:

(A) A description of the services provided by the taxpayer;

(B) A statement of whether or not the donee organization provides any

goods or services in consideration, in whole or in part, for the unreim-

bursed expenditures; and

(C) [A description and good faith estimate of the value of any goods or

services provided by the donee organization].

[Sec. 1.170A–13(f)(10), Income Tax Regs.]

For the statement to be contemporaneous, the taxpayer must

obtain the donee’s statement on or before the earlier of: (1)

Pet Hospital, Costco, Waste Management, and East Bay Municipal Utility District recorded Van

Dusen’s payments in their computer systems in 2004, and later retrieved the data in response

to her customer service inquiries.

Van Dusen’s tax return did not need to disclose any information required by sec. 1.170A–

13(a)(1)(iii), Income Tax Regs. Although Van Dusen submitted Form 8283, which requires the

name of the donee, the date of the contribution, and the amount of the contribution—informa-

tion required under sec. 1.170A–13(a)(1)(iii), Income Tax Regs.—Van Dusen did not need to file

this form. The instructions for Form 8283 explicitly state that it does not apply to out-of-pocket

expenses incurred for volunteer work. (Although IRS form instructions are generally not bind-

ing, see supra note 29, we cite the form instructions here because sec. 1.170A–13(a)(2)(ii), In-

come Tax Regs., directs the taxpayer to furnish the information required by sec. 1.170A–

13(a)(1)(iii), Income Tax Regs., on the taxpayer’s return if required by the return form or its

instructions.) On her tax return, Van Dusen simply had to enter the total amount of her mone-

tary contributions (including out-of-pocket expenses)—which she did.

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(515) VAN DUSEN v. COMMISSIONER 537

the date the return was filed, or (2) the due date (including

extensions) for filing the return. Sec. 1.170A–13(f)(3), Income

Tax Regs. 37

Van Dusen has not satisfied the contemporaneous written

acknowledgment requirement. The due date for filing her

2004 return was April 15, 2005, and she filed her return on

January 25, 2007. The earlier of the two dates is April 15,

2005. The date by which Van Dusen was required to obtain

the donee’s statement is therefore April 15, 2005. Van Dusen

had not obtained any written acknowledgment of her services

from Fix Our Ferals by April 15, 2005. Even by trial, she had

failed to obtain from Fix Our Ferals a statement with the

information required by section 1.170A–13(f)(10), Income Tax

Regs. 38

Since Van Dusen lacks the appropriate written acknowl-

edgment from Fix Our Ferals, she has not substantiated and

cannot deduct any foster-cat expenses of $250 or more. 39

Neither party, however, has identified which portions of the

claimed deduction are attributable to foster-cat expenses of

$250 or more. It seems to us that the proper identification

procedure is to multiply each cat-care expense by the rel-

evant percentage (90 percent or 50 percent) and see whether

the resulting amount equals or exceeds $250. Any amount

less than $250 is deductible, and any amount that is $250 or

37 The regulations do not specifically require the taxpayer to attach the contemporaneous writ-

ten acknowledgment to the tax return.

38 Sec. 1.170A–13(f)(10)(ii), Income Tax Regs., specifies the particular information required to

be on the donee statement. Van Dusen attempted to submit a letter written by the Fix Our

Ferals treasurer in 2008 as proof of contemporaneous written acknowledgment. See Ex. 3–P. At

trial we sustained the IRS’s hearsay objection to the letter. Van Dusen filed a motion for recon-

sideration of the evidentiary ruling. We denied the motion. The letter does not qualify for any

hearsay exception. And regardless, it fails to meet the requirements of sec. 1.170A–13(f)(10)(ii),

Income Tax Regs.

39 In Cohan v. Commissioner, 39 F.2d 540, 543–544 (2d Cir. 1930), the Court of Appeals for

the Second Circuit held that if the taxpayer has proven deductible expenses but the precise

amount remains uncertain, courts can estimate the amount of such expenses. The Cohan rule

does not allow Van Dusen to deduct any foster-cat expenses of $250 or more. Sec. 170(f)(8) and

sec. 1.170A–13(f), Income Tax Regs., impose specific substantiation requirements on charitable

contributions of $250 or more. The Cohan rule does not relieve taxpayers of substantiation re-

quirements that Congress has specifically laid out. See Addis v. Commissioner, 118 T.C. 528,

537 (2002) (denying charitable contribution deduction because taxpayer’s contemporaneous writ-

ten acknowledgment did not comply with sec. 170(f)(8)), affd. 374 F.3d 881 (9th Cir. 2004);

Stussy v. Commissioner, T.C. Memo. 2003–232 (disallowing deductions for residential expenses

for the portions of a house used by charity because taxpayer failed to provide contemporaneous

written acknowledgment); see also Sanford v. Commissioner, 50 T.C. 823, 827–828 (1968)

(Cohan rule inapplicable when taxpayer has not satisfied sec. 274(d) substantiation require-

ments), affd. per curiam 412 F.2d 201 (2d Cir. 1969).

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538 136 UNITED STATES TAX COURT REPORTS (515)

more is not deductible. By our calculations, the following

foster-cat expenses are $250 or more:

Amount

consti-

Amount tuting a

listed on foster-cat

Payee Date1 Document document expense

Thornhill Pet Hospital 1/17/04 Thornhill Pet Hospital cli- $1,532.68 $1,379.41

ent account history

Thornhill Pet Hospital 2/17/04 Bank statement2 306.78 276.10

Pet Vet Pet Food 5/30/04 Credit card statement 417.54 375.79

St. Louis Vet Clinic 7/28/04 Credit card statement 477.00 429.30

Pet Vet Pet Food 9/21/04 Check No. 1428 687.81 619.03

St. Louis Vet Clinic 10/16/04 Check No. 1442 309.00 278.10

Thornhill Pet Hospital 11/06/04 Credit card statement2 723.25 650.93

Pet Vet Pet Food 11/11/04 Check No. 1462 332.81 299.53

Berkeley Dog and Cat 11/15/04 Bank statement 500.00 450.00

Hospital

Thornhill Pet Hospital 11/30/04 Credit card statement2 320.54 288.49

1For credit card statements, dates refer to the transaction date, not the posting date.

2Also reflected on the Thornhill Pet Hospital client account history.

Each of the remaining foster-cat expenses is less than

$250. 40

V. Effect of Section 280A

Section 280A(a) provides that for individual taxpayers ‘‘no

deduction otherwise allowable under this chapter shall be

allowed with respect to the use of a dwelling unit which is

used by the taxpayer during the taxable year as a residence.’’

Section 280A(b) contains an exception to section 280A(a). It

provides: ‘‘Subsection (a) shall not apply to any deduction

allowable to the taxpayer without regard to its connection

with his trade or business (or with his income-producing

activity).’’ The IRS argues that section 280A forbids Van

Dusen from claiming a charitable-contribution deduction for

a portion of her household utility bills. We hold that section

280A does not affect the deductibility of Van Dusen’s

expenses. Van Dusen’s expenses would be deductible without

regard to any connection with a trade or business. See sec.

280A(b). Van Dusen’s trade or business was legal services.

She worked as an attorney and derived all her income from

legal jobs. She derived no income or expectation of income

40 On the basis of Van Dusen’s credit card statement, we find that the $292.15 payment to

Bay Area Veterinary Specialist on Nov. 29, 2004, was offset by a credit of $35.97 that was post-

ed on Nov. 30, 2004. Since Van Dusen’s total payment to Bay Area Veterinary Specialist was

$256.18 ($292.1 – $35.97), the amount of her foster-cat expense was $230.56 (90 percent of

$256.18). Therefore, we categorize this expense as less than $250.

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(515) VAN DUSEN v. COMMISSIONER 539

from fostering cats. Therefore, the utility bills are covered by

the exception in section 280A(b).

VI. $100 Check to Island Cat Resources and Adoption

Van Dusen’s documentation includes a $100 check to

‘‘ICRA’’ (Island Cat Resources and Adoption) with ‘‘fundraiser’’

in the memo line. Island Cat Resources and Adoption is a

section 170(c) organization. See supra note 17 and accom-

panying text. We hold that $100 is deductible as a charitable

contribution to Island Cat Resources and Adoption. Van

Dusen testified that the check was a donation to the chari-

table organization, and her documentation meets the record-

keeping requirements of section 1.170A–13(a), Income Tax

Regs.

To reflect the foregoing,

Decision will be entered under Rule 155.

f

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