Ellen P. O’Neill echoes the words first sung by Irma Thomas in 1963, but immortalized in an expanded version by the Rolling Stones in 1964. Judge Gerber provides an obbligato in Richard S. Leyh and Ellen P. O’Neill, 2015 T. C. Sum. Op. 27, filed 4/13/15.

Ellen claims real estate pro status, and, having once been audited by IRS, has her logbooks at the ready. IRS checks them out and concedes Ellen materially participates in managing and operating the dozen houses she own, but claims she’s light on hours, as her logbooks don’t show her travel times between her ranch in Dripping Springs, TX (wherever that is), whereat she resides, and the several properties whereat she participates, between 26 and 30 miles away in and around Austin City Limits. Depending upon what route she takes and the state of Texas traffic (to which I can testify from my own knowledge ranges from the brutal to the unspeakable), it might take her between 42 to 55 minutes.

Ellen is not only a real estate pro, she is a top-fuel leadfoot.

Her logbooks convince IRS she would be a pro, but her travel time is not included, so she’s 117.5 hours shy of the magic 750. And when Ellen tries to fill in the missing time, IRS says “no, post-event ballpark guesstimates don’t cut it.”

Ellen’s revisions were as follows: “Petitioner’s methodology in revising the log was to determine whether the activity for any day reflected in the log took place in Austin or near her residence in Dripping Springs. For each occasion where the activity occurred in Austin, she computed a 45-minute trip or 1-1/2 hours round trip for that day. For example, on a particular day that reflected only 1-1/2 hours involved in the activity in Austin, petitioner added 1-1/2 hours for the travel to Austin from her home in Dripping Springs, for a total of three hours engaged in the activity for that day.” 2015 T. C. Sum. Op. 25, at p. 5.

Ellen even made the treat-‘em-all-as-one election for the dozen rentals.

OK, let’s look at Reg. 1.469-5T(f)(4), the substantiation rock upon which many wannabe real estate pros founder. The magic words are “The extent of an individual’s participation in an activity may be established by any reasonable means. Contemporaneous daily time reports, logs, or similar documents are not required if the extent of such participation may be established by other reasonable means. Reasonable means for purposes of this paragraph may include but are not limited to the identification of services performed over a period of time and the approximate number of hours spent performing such services during such period, based on appointment books, calendars, or narrative summaries.” 2015 T. C. Sum. Op. 25, at p. 8.

And the greatest of these is “any reasonable means.”

Ellen gets on the stand, and her testimony is reminiscent of certain fluids one might find in the little town of Shiner, TX.

“Petitioner testified and had clear and crisp recall of the activity reflected on the log and was easily able to identify those occasions when the activity occurred in Austin. Respondent’s counsel crossexamined petitioner but was able to show only a few minor discrepancies that petitioner admitted were in error. Altogether, petitioner has shown that she spent more than 750 hours engaged in the rental real estate activity during 2010.” 2015 T. C. Sum. Op. 25, at p. 9.

IRS’s counsel trots out all the unsubstantiated hours T. C. Memos. they can find, and there are a bushelbasketful.

But none of the shot-down petitioners came close to “clear and crisp” Ellen.

“Those cases did not involve a detailed contemporaneous log such as the one petitioner maintained. Petitioner provided day-by-day explanations of the specific rental real estate activity in her log. Further, from the log it was easy to identify days when the activity took place in Austin. Finally, petitioner has shown that the travel time was not included in the original log. Petitioner’s log and her revised log showing the travel time are well within the guidelines of section 1.469- 5T(f)(4), Temporary Income Tax Regs., supra.” 2015 T. C. Sum. Op. 25, at p. 9.

Ellen wins. I’m sure she can celebrate with something clear and crisp.

And you, gentle reader, make sure your wannabe real estate pros diary mileage and travel time.