You Have to be Able to Keep Your Face Straight

This was originally published on PAOO on August 9th, 2010.

Willie J. Moore, et ux. v. Commissioner, TC Summary Opinion 2010-102 is a good illustration of the principle that Summary opinions make up in entertainment value what they lack in precedent. The issue was car and truck expense totalling just over $36,000 supported by logs recording approximately 94,000 business miles driven in three cars. Mr. Moore was an employee of the City of Houston, but also worked as a mortgage broker and a real estate agent. From the case:

At trial, petitioners introduced two Excel spreadsheets that petitioner described as mileage logs for the Mercedes-Benz and the Cadillac. The mileage log for each vehicle consists of a 12- page spreadsheet with one page for each month of the year and an entry for each day of the month. Each daily entry includes the beginning and ending odometer readings, the total “deductible business miles driven” and the total “nondeductible commuting miles driven”, and the destination and “business reason” for the “business miles driven”. For all entries, the beginning odometer reading matches the ending odometer reading for the previous entry.

On petitioner's mileage log the entry for “business miles driven” typically exceeds 100 miles per day and occasionally is over 200 miles per day. For every Monday through Friday throughout the year petitioner listed 60 commuting miles; these miles were included on the log even for those days that petitioner admitted were holidays for his City of Houston position. ...... The daily entry for Thanksgiving Day 2004 indicates that petitioner commuted to his City of Houston job and also drove 119 miles to “preview bank foreclosure” at some undisclosed location; the daily entry for Christmas Day 2004 indicates that petitioner drove 150 miles to Hempstead, Texas, to “preview property for investment”. Daily entries were not made on January 31, February 29, July 31, and October 30 and 31.
On Mrs. Moore's mileage log the entry for “business miles driven” also typically exceeds 100 miles per day and is as much as 345 miles for a single day. Every day, Sunday through

Other than the commuting miles, petitioner's log includes no personal miles whatsoever. Saturday, includes an entry of 15 commuting miles. ... The daily entry for Thanksgiving Day 2004 indicates that Mrs. Moore commuted 15 miles and drove 95 business miles from La Marque to Galveston to “place ad in newspaper/visit client”.
Petitioners contend that these vehicles were used solely for business and not for any personal purpose (other than commuting) such as going to church or to the grocery store. According to petitioner, “anytime you're moving, you're actually in business”. So, for example, “when you drive to the grocery store, you will transact business.” In this regard, when asked by the Court what part of the grocery store was most conducive to conducting his business, petitioner replied as follows:

MR. MOORE: I would say the meat section, where they have the chips and all that good stuff. That's where people stop, and the fruit section; that's where I, you know—and if you're an agent and people know you're an agent, they will stop you and you will—you know, just have a conversation with them. If they're in the store and you pass a [business] card out.

THE COURT: I mean, do you wear a sign that says, I'm an agent, and stop them-- MR. MOORE: No. This is only the people that know you, not strangers. You know, this would be individuals who live in the same community you live in and may have wanted to talk to you but haven't seen you. When they get to chance to see you—it might be a church member, you know, a deacon at the church *** . We find petitioner's theorem regarding the transmutation of nondeductible personal expenses into deductible business expenses through kinesis to be so fundamentally flawed that we reject it without further discussion, and we move on to a consideration of the proffered mileage logs.

The mileage logs are, of course, the bedrock of petitioners' case. Unfortunately for petitioners, we are unable to accept those logs at face value because we are not convinced that they reliably record petitioners' use of their automobiles. By way of example, we point to the following.


Petitioner's mileage log claimed commuting miles for several days that were holidays for his full-time position with the City of Houston. In addition, petitioner stated that “my commuting miles include occasional *** personal use”; however, petitioner's log shows the same 60 commuting miles for each entry Monday through Friday.

Petitioner also stated that some personal miles were included in business miles because, as previously quoted, “any time you are moving, you're actually in business”. Although petitioner stated that he worked every day of the year, the log for his vehicle is missing entries for several days; nevertheless, the ending odometer reading from the last entry before the skipped day or days is the same as the beginning odometer reading of the next entry. Petitioner argued that the log is not “incorrect”, but he did admit that there are some days on which “there might have been an error on the log.”


Mrs. Moore's mileage log lists 15 commuting miles for each day except for the 5 days for which there is no entry. However, the mileage from League City, where petitioners' home is located, to La Marque is approximately 13 miles. Thus, round trip travel or commuting miles from petitioners' home to the La Marque office is approximately 26 miles. Therefore, every entry for commuting miles on Mrs. Moore's mileage log is understated by approximately 11 miles.


Finally, petitioners were unable to produce third-party records of their vehicles' odometer readings, such as service records, for 2004 or any other year, or any other evidence which might support the claimed mileage.

There didn't seem to be any doubt that Mr. Moore actually had the two businesses and used his cars so you would think that the court would have allowed him something. Maybe you think Mr. Moore was being a smart negotiator by starting high. I could really delude myself and say you might be thinking about my post of December 30 which explains the Cohan rule. Unfortunately, automobile expenses are covered under Code Section 274, which takes them out of the Cohan rule. Which means if you don't have good records, you get nothing, which is what Mr. Moore got.