M.W. Daman and V.A. Daman v. Com.
179 A.3d 100
Pa. Commw. Ct.2017Background
- Mark and Valerie Daman filed a joint 2010 PA personal income tax return reporting $85,333 gross compensation and $38,150 in unreimbursed employee business expenses (mostly for Mrs. Daman, a per diem/standby nurse working in MD and DE).
- The Department disallowed $36,249 of those expenses, increasing taxable income and issuing an assessment; the BOA sustained the assessment in full.
- The Board of Finance and Revenue granted only $832 more in expenses (for uniforms/education supported by receipts) and disallowed the bulk (travel, temporary housing, meals, phone, cable) as personal or unsupported, resulting in $1,089 tax due plus penalties and interest.
- Taxpayers appealed pro se to this Court but their brief lacked an argument section, failed to develop issues or cite/support authorities or include the documentary evidence the Board had considered.
- The stipulated record to this Court did not contain the documentary proof of claimed expenses; burden rests on taxpayer to prove assessment improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Taxpayers may deduct claimed unreimbursed employee business expenses from PA taxable income | Daman: expenses were necessary, reasonable, incurred in performance of Mrs. Daman’s out‑of‑state nursing work and thus deductible | Commonwealth: expenses are personal or unsupported; taxpayer bears burden to prove entitlement and must supply receipts/evidence | Denied — Court quashed petition for review because the appellate record lacked the supporting evidence and the briefs failed to develop issues; taxpayer did not meet burden |
| Whether Court should consider evidence submitted to the Board but not included in the stipulated record | Daman: (implied) Board packet proves expenses | Commonwealth: only the stipulated record is reviewable under Pa.R.A.P. 1571; evidence not in the record cannot be considered | Court refused to consider evidence not in the stipulated record and decided on the record before it |
| Whether pro se noncompliance with appellate briefing rules warrants dismissal of arguments on the merits | Daman: (implied) merits should be considered despite format | Commonwealth: strict compliance required; undeveloped issues not reviewed | Court declined to address undeveloped arguments and enforced briefing requirements under Pa.R.A.P. 2111/2119 |
| Whether claimed expenses, even if proven, qualify as business (not personal) expenses under PA law | Daman: travel, lodging, meals, phone, etc. were job‑related and necessary | Commonwealth: such costs are typically personal; must be shown to be actual, ordinary, necessary business expenses | Court noted, even on the merits, many claimed items likely personal and non‑deductible; taxpayer failed to prove otherwise |
Key Cases Cited
- Lal v. Department of Transportation, 755 A.2d 48 (Pa. Cmwlth. 2000) (appellate briefing rules are mandatory)
- Busch v. Department of Transportation, Bureau of Driver Licensing, 900 A.2d 992 (Pa. Cmwlth. 2006) (appellate rules apply to non‑lawyers)
- Southern Pines Trucking v. Commonwealth, 42 A.3d 1222 (Pa. Cmwlth. 2012) (review constrained to stipulated record)
- Fiore v. Commonwealth, 668 A.2d 1210 (Pa. Cmwlth. 1995) (taxpayer bears burden to prove assessment improper)
- Commissioner of Internal Revenue v. Flowers, 326 U.S. 465 (1946) (distinguishing employer‑business exigencies from taxpayer personal conveniences for business expense deductions)