White v. Commissioner

1981 T.C. Memo. 512, 42 T.C.M. 1085, 1981 Tax Ct. Memo LEXIS 232
Procedural entryThis page is a short order in White v. Commissioner. Read the opinion of the Court — 72 T.C. 1126
United States Tax Court·Decided September 15, 1981·No. Docket No. 1183-80.·Unpublished

Opinion

CHARLOTTE L. WHITE and WENDELL L. WHITE, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
White v. Commissioner
Docket No. 1183-80.
United States Tax Court
T.C. Memo 1981-512; 1981 Tax Ct. Memo LEXIS 232; 42 T.C.M. (CCH) 1085; T.C.M. (RIA) 81512;
September 15, 1981.
Charlotte L. White and Wendell L. White, pro se.
Jordon P. Weiss, for the respondent.

RAUM

MEMORANDUM FINDINGS OF FACT AND OPINION

RAUM, Judge: The Commissioner determined a $ 1,943 deficiency in petitioners' 1977 income tax. At issue is the correctness of the Commissioner's disallowance of a number of itemized deductions claimed on petitioners' joint return. Petitioners' principal attack on the deficiency, however, is a constitutional challenge, variously stated, to the entire Federal income tax and the conduct of litigation in this Court relating thereto.

FINDINGS OF FACT

Petitioners, husband and wife, were residents of California when they filed their petition in this Court. They filed a joint Federal income tax return for 1977. In petitioners' 1977 return, the husband's occupation was*233 stated to be "Industrial Engr." and the wife's "Reg. Nurse". The income reported consisted of three items: The wife's wages in the amount of $ 16,484.85 for nursing services; net income in the amount of $ 2,619.97 recorded on Schedule E representing $ 2,962.68 net rentals ($ 8,275.15 gross rentals minus $ 5,312.47 expenses) received from three rental properties minus a $ 342.71 net loss ($ 171.75 gross receipts 1 minus $ 514.16 expenses) on a "Chicken Business" not otherwise identified; and a minor item of $ 5 described only as "Found". 2 No income appears to have been reported from any activity of the husband which could be characterized as that of an "industrial engineer". The Government does not contend that petitioners received any unreported income.

In the notice of deficiency the Commissioner did not disallow any of the deductions claimed in Schedule E in respect of the rental properties, but he did disallow*234 $ 324 3 as a "checken business" loss claimed in Schedule E. At trial and on brief the Government has abandoned the disallowance of the claimed "chicken business" loss. Accordingly, there is no issue either as to the gross rents from the rental properties ($ 8,275.15) and gross receipts from the "chicken business" ($ 171.75) reported in Schedule E, or as to the deductions claimed therein in respect of those items. The only matter in dispute relates to itemized deductions claimed on petitioners' return.

The total amount of itemized deductions claimed in Schedule A of the return was $ 14,440.61. 4 By taking into account these deductions and the five claimed exemptions (two for petitioners plus three for dependent children), the return showed the amount of tax to be "None".

*235 The summary of itemized deductions claimed in Schedule A was as follows:

Medical and Dental Expenses$ 1,429.70
Taxes3,201.61
Contributions3,821.96
Miscellaneous5,987.34
Total$ 14,440.61

In the notice of deficiency petitioners were allowed a deduction of $ 1,440 for medical expenses, thereby eliminating that item as a matter in controversy. However, the Commissioner allowed a deduction in the amount of only $ 491 for taxes and only $ 821 for contributions. Petitioners have failed to prove that they made expenditures in excess of these two amounts for the respective purposes.

The handwritten entries in Schedule A of the return purporting to list the components of the $ 5,987.34 miscellaneous deductions are confusing. One component appears to be $ 2,000 for "Engineering" expenses. The record fails to show either that there were any "engineering" activities to which this component might relate or that even if there were any such activities they would qualify, in the circumstances of this case, as a business or profession or as a profit oriented venture of either petitioner, or that any expenditures were in fact made that might conceivably be classified*236 as engineering expenses in respect of this item or any other item. At the trial, Mr. White stated without further explanation that this item "goes to a thing called the headband business, and that is a loan of $ 2,000 to our son for the headband business that --".

Two other miscellaneous deductions claimed in Schedule A were "Nursing Business Expenses" in the amount of $ 2,179.16 and "Demanded Schooling" in the amount of $ 2,452.85. 5 Although there was reason to believe that the latter item pertained to the compulsory school attendance of petitioners' children, Mr. White stated at the trial that it, like the nursing business expenses, related to Mrs. White's occupation as a registered nurse.

*237 During 1977, and for a number of years prior thereto, Mrs. White worked as a registered nurse at St. John's Hospital in Oxnard, California. She did not have a college degree, but in addition to performing nursing services she from time to time did relief or substitute work at the hospital in a managerial or supervisory capacity. It was indicated to her that, although she was not required to do so, it would be advisable to take college courses in management.

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White v. Commissioner, 1981 T.C. Memo. 512, 42 T.C.M. 1085, 1981 Tax Ct. Memo LEXIS 232 (tax 1981).

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