The opinion
T.C. Memo. 2012-332
UNITED STATES TAX COURT
JOSEPH R. POSLUNS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13443-10. Filed December 3, 2012.
Joseph R. Posluns, pro se.
William F. Castor, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
COHEN, Judge: Respondent determined a $5,994 deficiency and a
$1,198.80 section 6662(a) penalty relating to petitioner’s Federal income tax for
2007. A portion of the deficiency was based on self-employment tax, which
respondent conceded in the answer. The issues for decision are whether petitioner
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[*2] adequately substantiated vehicle, travel, and “other” unreimbursed employee
business expenses and whether he is liable for the penalty. Unless otherwise
indicated, all section references are to the Internal Revenue Code for the year in
issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.
FINDINGS OF FACT
Petitioner resided in Arkansas when he filed his petition. During 2007, he
was employed by the University of Maryland University College (UMUC),
Graduate School of Management & Technology, Adelphi, Maryland, as an
associate professor, teaching online courses in the fields of Business & Executive
Programs. He was also employed by National-Louis University in Chicago, Illinois.
UMUC’s travel policy operative during 2007 stated the following:
I. Definitions
A. In-State Travel is defined as:
Travel within the State of Maryland or within the
Washington, DC Metropolitan Area and not
including an overnight stay.
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[*3] B. Out-of-State Travel is defined as:
1. Travel to destinations that are outside the State of
Maryland and/or Metropolitan Washington, DC; or
2. Travel that requires an overnight stay, even if
the overnight location is within the State of Maryland or
Metropolitan Washington, DC.
II. Approval
Travelers must obtain written approval from their supervisor for out-of-
state travel prior to initiating travel arrangements or commencing the
travel. Approval is necessary for out-of-state travel even if there is no
cost to UMUC. The UMUC Travel Form is to be utilized to obtain
this approval. The purpose of the travel, regardless if in-state or out-
of-state, must be clearly identified on the UMUC Travel Form for out-
of-state travel and on the Expense Reimbursement Form for all travel.
III. Reservations and Ticketing
A. Travelers must use the UMUC designated travel
agency/coordinator for reservations and ticketing such as hotels, air,
train tickets and auto rentals. Travelers and the designated travel
agency/coordinator must ensure that all arrangements are at the least
expensive logical fare for the service using the most direct route (or
other reasonable routing that results in a lower fare). Travelers are
expected to make advance bookings and request
governmental/educational discounts. Travelers must take advantage of
“back-to-back” airfares to get the best possible rate whenever possible.
B. If travel plans change, UMUC will pay cancellation penalties
provided that the change was made for the convenience of UMUC or
necessitated by emergency circumstances. Some airlines will refund
purchase price of “non refundable” tickets if the change resulted from
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[*4] an emergency situation. The employee (or unit) should contact the
travel agency/coordinator to pursue possibility of refunds resulting
from an emergency situation.
IV. Lodging Reimbursement
The cost of lodging will be reimbursed on the basis of receipts at the
single room rate. When choice of lodging facilities is available, the
traveler is expected to select a moderately priced hotel. Moderately
priced lodgings include Ramada Inn, Fairfield Inn, and Hampton Inn.
V. Meal Reimbursement
A. Domestic Travel
1. The traveler will be reimbursed at the per diem rates
established by the Board of Regents. A partial day’s travel is
eligible for the appropriate meal(s) consumed when the travel time
encompasses four hours and the traveler is away from home or place of
work two hours before and two hours after the meal. The travel must
begin prior to 6 a.m. for breakfast or prior to 10 a.m. for lunch, and it
must end after 8 p.m. for dinner.
2. With receipts, the out-of-state traveler may claim
reimbursement above the standard per diem rates when
circumstances necessitate high cost meals. The traveler may be
reimbursed up to actual cost with detailed receipts, when approved
by the supervisor as reasonable and necessary. In no case will the
amount reimbursed exceed $50 per day.
3. The traveler cannot claim the per diem reimbursement for
meals that are included in other travel arrangements such as meals
in flight or meals included in the conference registration fee.
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[*5] 4. The traveler will be reimbursed for the actual cost of a
business related meal incurred on behalf of a non-state
employee. The traveler’s meal will be reimbursed in accordance
with this travel policy.
5. The traveler will not be reimbursed for alcoholic beverages.
B. International Travel
1. The traveler will be reimbursed at actual cost with receipts
or at the applicable U.S. Department of State meal and incidental
(M&IE) rate without receipts, in accordance with the USM policy.
VI. Vehicles
A. UMUC Fleet Vehicles
1. The traveler must use a UMUC fleet vehicle whenever
possible.
2. Whenever possible, the traveler must verify with the UMUC
fleet manager the availability of fleet vehicles prior to renting a car.
B. Personal Vehicles
1. All personal vehicles must be properly insured.
2. Mileage will be reimbursed at the Board of Regents’ approved
rate for miles driven which exceed the normal daily commute miles.
Mileage must be calculated using the most direct route. Commuting
mileage to the normal work site is not reimbursable. No mileage
will be reimbursed for travel less than five miles one way if
origination or destination is a local University of Maryland System
site.
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[*6] 3. Multiple travelers to one destination should carpool
whenever feasible.
4. Traveler should verify that personal vehicle usage is the
most economical mode of transportation.
C. Car Rentals
1. The traveler is expected to rent the least expensive car that
will accommodate the trip’s requirements.
2. Rentals should be arranged through the UMUC designated
travel agency/coordinator.
3. Multiple travelers to one location should carpool whenever
feasible.
4. The traveler should not purchase additional insurance for a
car rental within the U.S. Insurance is provided by the State.
5. The traveler will be reimbursed for gas purchased at a gas
station with receipts. If feasible, the traveler should fill the
gasoline tank at a gas station prior to returning the car to the rental
agency.
VII. Travel with Spouses
Expenses incurred by spouses traveling in an unofficial capacity are not
reimbursable.
VIII. Miscellaneous Expenses
A. Parking Fees - Receipts should be requested for reimbursement
of garage or lot parking. Travelers to airports should take advantage of
long term parking lots whenever available.
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[*7] B. Taxi/Shuttle Service Receipts should be requested for
reimbursement of taxi and airport shuttle service.
C. Telephone Calls - Business related telephone calls will be
reimbursed.
D. Laundry - The cost of laundry, cleaning and pressing is
reimbursable with receipts.
E. Gratuities - Moderate gratuities will be allowed for baggage
and/or when the traveler is transporting UMUC materials.
XI. Documentation required for Travel:
A. Airline/Rail Boarding Pass or detailed receipt;
B. Hotel itemized invoice/receipt
C. Car Rental Itemized Receipt; itemized gas station receipt if filled
prior to returning car to rental agency
D. Meal-Itemized Receipt if asking for reimbursement of actual
expenses
E. Registration Form with confirmation of registration
F. Parking Fees - Receipts should be requested for reimbursement
of garage or lot parking
G. Taxi/Shuttle Service Receipts
H. Telephone Calls - Business related telephone calls will be
reimbursed; itemized invoice from hotel or phone provider required
I. Laundry - The cost of laundry, cleaning and pressing is
reimbursable with receipts
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[*8] IX. Policy Exceptions
A. The respective Member of the Executive Committee must
approve exceptions to this Policy resulting in a claim larger than $500.
The Associate Vice President, Finance, may approve all other
exceptions.
During 2007, petitioner received reimbursements from UMUC totaling $1,248.17.
Although petitioner performed services for UMUC under the terms of several
appointment letters, none of the documents suggested that his employment related to
contracts with the U.S. Department of Defense or required travel to military bases.
Petitioner prepared and filed a Form 1040, U.S. Individual Income Tax
Return, for 2007 as “married filing separately” and showing Quebec, Canada, as his
address. He reported wages from UMUC and from National-Louis University. On
Schedule C, Profit or Loss From Business, he identified his business as
“development of online educational programs and instructions” and claimed a loss
deduction of $45,101.34. Among the expenses claimed were $4,785 for vehicles,
$3,650.50 for travel, and $12,912 of “other expenses” as follows:
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[*9] Expense Amount
Conferences $1,652
Professional development 1,221
Research materials (books, www, mags, reports) 1,395
Computer software, simulations, Webinar participation 2,105
Revenue-enhancing presentations 1,650
Telephone, cable, Internet 1,940
Research and development (focus groups) 1,175
Shipping, postage (UPS, Fed Ex) 464
Registration of competitive online programs 1,310
Total 12,912
After his 2007 return was filed, it was audited by the Internal Revenue Service
(IRS). During the course of the audit, petitioner submitted a Form 1040X, Amended
U.S. Individual Income Tax Return, on which he claimed as employee business
expense deductions the same items previously claimed on Schedule C. Thereafter,
the IRS sent a notice of deficiency disallowing the amounts claimed for vehicle
expenses, travel, and “other expenses”. Because the deficiency was determined in
relation to petitioner’s original return, the notice determined self-employment tax
liability and allowed a deduction for one-half of the amount of that tax.
Procedural Matters
Events occurring after the petition is filed and at trial ordinarily are not
included in the findings of fact. See Rule 151(e). In this case, however, certain
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[*10] procedural matters are relevant to our determinations about the reliability of
the evidence.
The petition was filed June 14, 2010. By notice served August 13, 2010, the
case was set for trial in Little Rock, Arkansas, on January 10, 2011. Included with
the notice of trial was the Court’s standing pretrial order, which included the
following provisions:
Stipulation. It is ORDERED that all facts shall be stipulated
(agreed upon in writing) to the maximum extent possible. All
documents and written evidence shall be marked and stipulated in
accordance with Rule 91(b), unless the evidence is to be used only to
impeach (discredit) a witness. Either party may preserve objections by
noting them in the stipulation. If a complete stipulation of facts is not
ready for submission at the start of the trial or when otherwise ordered
by the Court, and if the Court determines that this is due to lack of
cooperation by either party, the Court may order sanctions against the
uncooperative party.
Trial Exhibits. It is ORDERED that any documents or materials
which a party expects to use (except solely for impeachment) if the case
is tried, but which are not stipulated, shall be identified in writing and
exchanged by the parties at least 14 days before the first day of the trial
session. The Court may refuse to receive in evidence any document or
material that is not so stipulated or exchanged, unless the parties have
agreed otherwise or the Court so allows for good cause shown.
Due to a weather-related delay in commencement of the session the case was
called and recalled twice on January 11, 2011, and recalled again on January 12,
2011. The parties had not executed a stipulation. Petitioner did not have a
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[*11] log or other original receipts or substantiating documents, and he
explained that they were in Canada. He moved for a continuance to return to Canada
“to retrieve the supporting documents requested by the IRS pursuant to
PETITIONER’S original tax for the year 2007.” Petitioner’s motion was granted.
By notice served September 12, 2011, accompanied by the Court’s standing
pretrial order, the case was set for trial in Little Rock, Arkansas, on February 13,
2012. On November 29, 2011, respondent served on petitioner a request for
production of documents asking for, among other things:
A list of any business trips taken or conventions attended during
2007.
A description of the records maintained for travel and
transportation expenses for 2007.
For travel expense, copies of any and all records, including, but
not limited to, logs, diaries, notebooks, receipts, cancelled checks, etc.,
reflecting: (1) the cost of each separate expense for travel, lodging, and
meals; (2) the dates you left and returned for each trip and the number
of days spent on business; (3) the destination or area of travel (name of
the city, town, or other designation); and (4) the business purpose for
the expense or the business benefit gained or expected to be gained.
* * * * * * *
For transportation expenses, copies of any and all records,
including, but not limited to, logs, diaries, notebooks, receipts,
cancelled checks, etc., reflecting: (1) the cost of each separate expense
(for car expenses, the cost of the car, the date you started using it for
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[*12] business, the mileage for each business use, and the total miles for
the year); (2) the date of the expense; (3) your business destination and
(4) the business purpose for the expense.
Petitioner responded on December 29, 2011, objecting to the requests on several
grounds including that he had previously provided documents to the IRS, but
indicating that he intended to produce a travel log within the next 21 days.
Petitioner failed to produce any documents in accordance with the standing
pretrial order. During the week of February 6, 2012, petitioner told respondent’s
counsel that he would not provide any documents prior to the trial date.
When the case was called on February 13, 2012, the parties still did not have a
stipulation. Petitioner stated that he had shown his original log to respondent’s
counsel that morning. The case was recalled on February 14, at which time
petitioner had the log and purported summaries of the log, but no original receipts.
Petitioner then complained that respondent would not settle with him, asserting:
There’s a document that the IRS Commissioner said that anybody who
goes after the IRS in Tax Court, we’re going to try to get a minimum of
$3,000 from. It conforms to the fact, this is a test case to try and water
board me to concede. I offered to pay them, even though I don’t owe
them nothing, zero. I have the documentation that I sent them and I will
show them, I owe them not a cent. But to say thank you for letting me
work in this country, I offered to pay them. This case could have gone
away a year ago.
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[*13] Respondent’s counsel replied that the case had not settled because
substantiating documentation had not been received and that there were questions
concerning the authenticity of the log.
The case was called for trial on February 15, 2012. At that time petitioner
asserted that respondent’s counsel had engaged in an inappropriate conversation with
the Court’s deputy trial clerk the previous day and that, when challenged, had called
in Court security officers to intimidate petitioner.
Before and during trial and in his brief, petitioner asserted that he could not
identify students with whom he met during 2007 because of the Family Educational
Rights and Privacy Act of 1974, Pub. L. No. 93-380, sec. 513, 88 Stat. at 571,
current version at 20 U.S.C. sec. 1232g (2006), or national security concerns.
OPINION
Preliminary Matters
In the petition and prior to trial, petitioner contended that the notice of
deficiency is invalid because it was issued after he had submitted an amended return
recharacterizing the disputed vehicle, travel, and other expenses as employee
expenses rather than business expenses. Respondent has cited authorities holding
contrary to petitioner’s position, and petitioner has cited none supporting his
position. See Fayeghi v. Commissioner, 211 F.3d 504, 507 (9th Cir. 2000), aff’g
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[*14] T.C. Memo. 1998-297; Koch v. Alexander, 561 F.2d 1115, 1117 (4th Cir.
1977); Pace v. Commissioner, T.C. Memo. 2010-272; Colvin v. Commissioner, T.
C. Memo. 2004-67, aff’d, 122 Fed. Appx. 788 (5th Cir. 2005). The notice of
deficiency is valid.
Before the first trial date, petitioner filed a motion to shift the burden of
proof, citing section 7491. That motion was denied. In his posttrial brief,
petitioner implicitly contends that respondent must prove that his claimed
deductions are not permissible. Section 7491(a) shifts to the Commissioner the
burden of proof with respect to a factual issue only if the taxpayer introduces
credible evidence and has complied with substantiation requirements, has
maintained required records, “and has cooperated with reasonable requests * * * for
witnesses, information, documents”. Sec. 7491(a)(2)(B). Petitioner has not met the
conditions for shifting the burden of proof, and it remains with him. See Rule
142(a); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934); Rockwell v.
Commissioner, 512 F.2d 882 (9th Cir. 1975), aff’g T.C. Memo. 1972-133.
Respondent disputes petitioner’s credibility based on his belated production
of the log and the appearance of that log, the absence of original records, his
vague and uncorroborated testimony, and his implausible accusations against
respondent’s counsel and Court security personnel. We need not accept
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[*15] petitioner’s testimony and may and do reject it because of the many indicia of
unreliability. See Gaudiano v. Commissioner, 216 F.3d 524, 536 (6th Cir. 2000),
aff’g T.C. Memo. 1998-408, vacated and remanded on another ground, 531 U.S.
1108 (2001); Fleischer v. Commissioner, 403 F.2d. 403, 406 (2d Cir. 1968), aff’g
T.C. Memo. 1967-85; Tokarski v. Commissioner, 87 T.C. 74, 77 (1986). For
example, one of petitioner’s accusations against respondent’s counsel was based on
his alleged overhearing of a conversation with Court staff, even though he admitted
that he is hard of hearing. The conversation he described certainly would be
improper and is unlikely to have occurred, if at all, in open Court in petitioner’s
presence. The alleged conversation was denied by the alleged participants. We do
not believe that it occurred.
Petitioner contends that he has been targeted under a program of the IRS that
precludes settlement and attempts to force payment of excessive taxes. The efforts
of respondent’s counsel to settle this case are apparent from the transcripts of
January 2011. As petitioner’s inherently improbable accusations expand to more and
more public servants, his perceptions become more and more questionable. His
claims about his employment are not supported by the records of his employer,
which he referred to as “fraudulent” but which were received pursuant to rules
803(6) and 902(11) of the Federal Rules of Evidence and 28 U.S.C. section 1746
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[*16] (2006) (declarations under penalty of perjury). His refusal to identify persons
with whom he allegedly met on various trips invites heightened scrutiny. The central
and decisive issue here, however, is whether petitioner’s travel log is adequate to
substantiate the expenses in dispute and to excuse the production of corroborating
witnesses and other documentary evidence.
Petitioner insists that he presented copies of receipts substantiating his
deductions to various IRS offices at the time he filed his original return and during
the audit and to respondent’s counsel. He did not, however, produce for stipulation
or at trial any such documents, despite having obtained a continuance to travel to
Canada to retrieve them. A trial before the Tax Court is a proceeding de novo; what
petitioner may or may not have submitted with the return or during the audit is
irrelevant. See Greenberg’s Express, Inc. v. Commissioner, 62 T.C. 324, 327
(1974). Petitioner was cautioned by the Court several times before and
during trial that what he had previously produced to the IRS was not to be
considered and that he had to prove his case to the Court during the trial. Yet the
only actual receipts he produced were for mailings to the IRS after 2007, the year in
issue.
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[*17] Disallowed Deductions
Section 6001 requires that a taxpayer keep such records as are necessary to
establish his or her deductions. See sec. 1.6001-1(a), Income Tax Regs.
Petitioner’s vehicle and travel expenses, and certain of the types of expenses he
reported as “other expenses”, are deductible only if he satisfies the enhanced
substantiation requirements of section 274(d). Section 274(d) requires a taxpayer
to substantiate “by adequate records or by sufficient evidence corroborating the
taxpayer’s own statement” any expenses for travel and “with respect to any listed
property (as defined by section 280F(d)(4))”. Listed property includes “any
computer or peripheral equipment”, “any passenger automobile”, and “any other
property used as a means of transportation”. Sec. 280F(d)(4)(A)(i), (ii), (iv); see
also sec. 1.274-5(k)(7), Income Tax Regs. To satisfy the adequate records
requirement, the taxpayer must maintain “an account book, diary, log, statement of
expense, trip sheets, or similar record”, as well as documentary evidence, such as
receipts or paid bills. Sec. 1.274-5T(c)(2)(i), Temporary Income Tax Regs., 50
Fed. Reg. 46017 (Nov. 6, 1985); sec. 1.274-5(c)(2)(iii)(A), Income Tax Regs.
Each element of the expense or business use must be recorded at or near the time it
occurs. Sec. 1.274-5T(c)(2)(ii), Temporary Income Tax Regs., supra. A taxpayer
unable to produce adequate records may alternatively establish an element of an
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[*18] expenditure by his own statement and “other corroborative evidence sufficient
to establish such element.” Sec. 1.274-5T(c)(3)(i)(B), Temporary Income Tax
Regs., 50 Fed. Reg. 46020 (Nov. 6, 1985). In the case of listed property, those
elements to be established are the amount of the expenditure, the amount of each
business use, the date of the expenditure, and the business purpose. Sec. 1.274-
5T(b)(6)(i)-(iii), Temporary Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985).
Credit card statements petitioner presented at trial were in petitioner’s wife’s
name, and specific items listed on them disclosed only the name of the charging
entity and not whether an expense was business or personal. Petitioner claimed
that some of his travel was to military bases, but he testified specifically about only
two items of travel expense. He contends that he spent the period from January
6 to February 28, 2007, in Majorca, Spain, where he went “to talk about the cyber-
warfare program and recruit.” His wife was also there at that time, but he denied
deducting her expenses. He did not identify any specific persons that he spoke
to for business purposes, and he did not explain how this travel related to his
employment with UMUC. Much of his testimony suggested that UMUC was
unaware of his alleged activities in traveling to military bases and teaching
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[*19] cyberwarfare. There is no evidence that petitioner complied with the UMUC
travel policy quoted in our findings and much to suggest that he did not.
Petitioner also testified that he met with UMUC Dean Brady in Chicago on
April 11, 2007, and incurred airfare and hotel expenses in connection with that trip.
In that regard, his testimony was as follows: “I started to teach for National
University who wanted to get in the military, and I documented I met with both of
them, but UMUC authorized it. Now the way it’s done is although UMUC had a
policy, this was outside -- the cyber-warfare was not known to UMUC people at
all”. In view of this seemingly self-contradictory testimony, we cannot discern how
the meeting related to petitioner’s employment with UMUC rather than to some
activity outside of his assigned duties.
Petitioner offered summaries of the log that he had prepared for trial, but the
summaries did not constitute substantiation of items listed in the log. Many of the
entries in the log are illegible, and many entries for different days appear to have
been added at the same time. Contrary to petitioner’s contention, the log does not
appear to include the names of any students with whom he met.
Respondent argues that the log was created or reconstructed in preparation
for trial rather than contemporaneously. Petitioner testified that the expense
notations were prepared as of the time the tax return was filed, but even if true that
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[*20] testimony does not demonstrate that the entries were prepared at or near the
time the expense was incurred, as required by the applicable regulations. See Park v.
Commissioner, T.C. Memo. 2012-279, at *4; Evan v. Commissioner, T.C. Memo.
2004-180. The log does not corroborate petitioner’s generalized testimony, and only
his testimony would validate the log. The absence of original records undermines the
reliability of both the testimony and the log.
Petitioner acknowledged that some of the disallowed items might have been
reimbursed by his employer, but he did not seek reimbursement. He testified:
Why would I seek reimbursement for them? It is helping my promotion.
It’s helping my familiarity with the students who are there. It’s helped
me train generals and that to go to Kandahar in Iraq, and it’s also
helping me get -- stay as an associate professor. The contracts are
renewed every year. So for promotion, associate professor, the
comradery, the fact that they praised me for handling the conferences,
I’m very proud of what I did.
Reimbursable expenses of employees are not deductible. See Orvis v.
Commissioner, 788 F.2d 1406, 1408 (9th Cir. 1986), aff’g T.C. Memo. 1984-533;
Brown v. Commissioner, 446 F.2d 926, 928 n.5 (8th Cir. 1971), aff’g T.C. Memo.
1970-253; Coplon v. Commissioner, 277 F.2d 534, 535 (6th Cir. 1960), aff’g T.C.
Memo. 1959-34.
We cannot tell from the record which of the “other expenses” reported by
petitioner would be subject to the heightened substantiation requirements of section
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[*21] 274(d) or would be reimbursable by UMUC, because petitioner has not
explained specific items. Even if we were authorized to approximate the amount of
deductions to which petitioner might be entitled, the evidence is inadequate to make
a reasonable allowance. We can estimate the amount of the deductible expense only
when the taxpayer provides evidence sufficient to establish a reasonable basis upon
which the estimate can be made. See Vanicek v. Commissioner, 85 T.C. 731, 742-
743 (1985). Again, only petitioner’s generalized assertions that he incurred and
substantiated the expenditures are in evidence, and his statements are no more
persuasive than assertions that his amended return was correct as filed. Tax returns
do not establish the truth of the matters stated in them. See McLaine v.
Commissioner 138 T.C. 228, 245 (2012); Lawinger v. Commissioner, 103 T.C. 428,
438 (1994); Wilkinson v. Commissioner, 71 T.C. 633, 639 (1979); Roberts v.
Commissioner, 62 T.C. 834, 837 (1974).
We conclude that the disputed deductions cannot be allowed because they
have not been substantiated.
Section 6662(a) Penalty
Section 6662(a) and (b)(1) imposes a 20% accuracy-related penalty on
any underpayment of Federal income tax attributable to a taxpayer’s negligence
or disregard of rules or regulations. Section 6662(c) defines negligence as
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[*22] including any failure to make a reasonable attempt to comply with the
provisions of the Code and defines disregard as any careless, reckless, or intentional
disregard. Disregard of rules or regulations is careless if the taxpayer does not
exercise reasonable diligence to determine the correctness of a return position that is
contrary to the rule or regulation. Sec. 1.6662-3(b)(2), Income Tax Regs.
Section 7491(c) imposes on respondent the burden of production with respect
to the section 6662 penalty. On his original 2007 return, petitioner claimed as
Schedule C expenses deductions allowable, if at all, only on Schedule A as
unreimbursed employee expenses. For the reasons explained above, he is not
entitled to those deductions respondent disallowed. Thus respondent’s burden of
showing that the penalty for negligence is appropriate has been met. See Higbee v.
Commissioner , 116 T. C. 438, 446 (2001).
There is no suggestion in the record that petitioner sought competent tax
advice or otherwise made a reasonable attempt to comply with the recordkeeping
requirements related to his expenses. He simply insists that he substantiated his
deductions and that respondent unreasonably disallowed them. He has not
persuaded us that he has reasonable cause under section 6664(c) to avoid the
penalty.
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[*23] To give effect to respondent’s concession,
Decision will be entered
under Rule 155.