T.C. Memo. 1997-102
UNITED STATES TAX COURT
MELTON R. BOONE AND GERALDINE R. BOONE, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 24295-92. Filed February 27, 1997.
Melton R. Boone and Geraldine R. Boone, pro sese.
Horace Crump, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
SCOTT, Judge: Respondent determined deficiencies in
petitioners' Federal income taxes and additions to tax for the
taxable years 1985 through 1988 as follows:
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Additions to Tax
Year Deficiency Sec. 6651(a)(1)
1985 $6,890 $813
1986 7,080 685
1987 5,095 164
1988 3,338 51
All issues but one have been settled or conceded by the parties.1
The only issue remaining for decision is whether petitioners are
liable for additions to tax under section 6651(a)(1)2 for failure
to file timely Federal income tax returns for the years 1985
through 1987.
FINDINGS OF FACT
Some of the facts have been stipulated and are found
accordingly. The stipulation of facts and the exhibits attached
thereto are incorporated herein by reference.
Petitioners, husband and wife, were residents of Crestview,
Florida, at the time they filed their petition in this case.
Sometime between 1985 and the time of trial, Melton R. Boone
(petitioner) experienced brain hemorrhaging. As a result, he
could not safely drive, and his son, Melton R. Boone, Jr., drove
1
With respect to whether petitioner's civil service
retirement income is taxable, the parties agreed to be bound by
the Veterans' Administration's disability determination.
Petitioners conceded that respondent's determination of their
Schedule C income for 1985 through 1987 is correct. Finally,
petitioners conceded at trial that they are liable for the
addition to tax for failure to file a timely return under sec.
6651(a)(1) for 1988.
2
All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
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him to and from his regular work as D.P. Manager for the city of
Pembroke Pines, Florida, during each of the years in issue.
Petitioners requested, and respondent granted, an extension
of time for them to file their Federal income tax return for each
of the years 1985 through 1987. Not having received returns from
petitioners for 1985 through 1987, on April 26, 1990, respondent
prepared and filed substitute returns for them for each of these
years. On June 1, 1990, the Internal Revenue Service Center in
Atlanta received purported copies of Federal income tax returns
from petitioners that had been prepared by petitioner for the
years 1985 through 1987. The 1985 return was dated May 26, 1986,
the 1986 return was dated May 30, 1987, and the 1987 return was
dated May 24, 1988. Although each return claimed that
petitioners were due a refund, petitioner, who was a part-time
income tax return preparer, did not contact the Internal Revenue
Service (IRS) to determine why the refunds were never received
for the taxable years 1985 through 1987.
In the notice of deficiency respondent determined that
petitioners are liable for additions to tax under section
6651(a)(1) for failing to file a timely Federal income tax return
for each of the years 1985 through 1987.
OPINION
Section 6651(a)(1) imposes a 5-percent-per-month addition to
tax, not to exceed 25 percent, for failure to file a timely
return, unless the taxpayer establishes: (1) The failure did not
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result from willful neglect; and (2) the failure was due to
reasonable cause. Willful neglect has been interpreted to mean a
conscious, intentional failure, or reckless indifference. United
States v. Boyle, 469 U.S. 241, 245-246 (1985). Reasonable cause
requires the taxpayer to demonstrate that he exercised ordinary
business care and prudence and was nonetheless unable to file a
return within the prescribed time. Id. at 246.
Petitioners were granted automatic 4-month extensions of
time within which to file their 1985, 1986, and 1987 Federal
income tax returns. The returns were due on August 15, 1986,
August 15, 1987, and August 15, 1988, respectively. Sec.
1.6081-4, Income Tax Regs. Purported copies of the returns were
not received by the Atlanta Internal Revenue Service Center until
June 1, 1990.
Petitioner testified that he mailed their 1985, 1986, and
1987 tax returns on May 26, 1986, May 30, 1987, and May 24, 1988,
respectively. He contends that the returns were timely filed
because they were deposited with proper postage in a mailbox
outside the main post office in Perrine, Florida, each year
within the extended filing periods allowed. He then argues that
once the returns were placed in the U.S. Postal Service mailbox,
petitioners' responsibility for their delivery ended. As to what
may have happened to the returns, petitioner speculates that:
(1) The mailbox was tampered with by vandals or thieves; (2)
vandals unbolted the mailbox from its base and took the mail; (3)
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postal employees stole the mail; or (4) the IRS lost or misfiled
the returns because of its ineptitude. To say the least, we
regard such speculations as farfetched and unreliable.
Moreover, we think it is highly improbable that the returns
allegedly deposited with the U.S. Postal Service in late May for
3 successive years would not have been delivered to the IRS or
that each return was lost or misplaced by the IRS.
Petitioner also offered his son's testimony in an effort to
corroborate his own to show that petitioners timely filed their
returns for each year. Petitioner and his son testified that
petitioners' Federal income tax return for each of the years in
issue was mailed during their drive home from work. But the son
later testified that the returns were mailed late at night. When
asked by the Court to reconcile the two seemingly conflicting
statements, the son admitted that he did not remember the
specific circumstances surrounding the mailing of petitioners'
returns. However, the son testified that his returns for 1985
through 1987, which he thought were mailed at the same time
petitioners' returns for these years were mailed, were timely
received by the IRS.
Respondent's position is that petitioners have failed to
prove that their returns for the years in issue were timely
filed. We agree.
Section 7502(a) provides that the date of the U.S. postmark
stamped on the cover in which a return is filed is deemed the
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date the return was filed if the postmark date is within the
period for filing the return and the return is delivered after
the date it was required to be filed. If no evidence establishes
the postmark date of a return, the date the return was delivered
is the date the return was filed. Here petitioners provided no
evidence of a U.S. postmark. Consequently, section 7502 is not
applicable.
It has been held, however, that section 7502 does not
displace the common law presumption of delivery (the mailbox
rule). Anderson v. United States, 966 F.2d 487, 491 (9th Cir.
1992); cf. Konst v. Florida E. Coast Ry., 71 F.3d 850, 854 (11th
Cir. 1996). Under the common law mailbox rule, the proper
mailing of a return gives rise to a rebuttable presumption of
delivery. Anderson v. United States, supra at 491. When a
taxpayer is unable to produce documentary evidence that a return
was mailed, we have allowed indirect, credible evidence to prove
the date of postmark. See Estate of Wood v. Commissioner, 92
T.C. 793, 798 (1989) (accepting testimony of a postmistress who
affixed the postmark to the envelope containing the return),
affd. 909 F.2d 1155 (8th Cir. 1990). By contrast, petitioners in
this case have not produced credible evidence that their returns
were timely mailed and postmarked. We are not persuaded by
petitioner's self-serving testimony. We think it is significant
that petitioner failed to inquire about the refunds claimed on
the returns. It seems improbable to us that if petitioners had
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filed returns showing refunds due for 1985 through 1987,
petitioner, an income tax return preparer, would not have made
certain that the refunds were received.
In addition, we do not find the testimony of petitioners'
son credible as to whether, or when, they mailed their returns
for the years in issue. His testimony was contradictory and
uncertain. It is unlikely that petitioners' returns were mailed
at the same time as, and along with, their son's returns for 1985
through 1987 because their son's returns were apparently received
by the IRS.
Accordingly, we conclude that petitioners did not file any
Federal income tax returns for the years 1985 through 1987 other
than the copies of the returns received by respondent on June 1,
1990. They, of course, were untimely filed.
Next, we consider whether petitioners have shown that they
had reasonable cause for filing their 1985, 1986, and 1987 tax
returns late. Continuous illness or incapacity may constitute
reasonable cause if the taxpayer establishes that he was so ill
that he was unable to file a tax return. Williams v.
Commissioner, 16 T.C. 893 (1951). Respondent contends that
petitioner was not so ill during the years in issue that he could
not have filed the returns on time.
At some point after 1985, petitioner experienced a brain
hemorrhage and was unable to perform some of the tasks associated
with daily living, such as safely driving an automobile.
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However, he presented no evidence suggesting that he was so ill
during those years that he was unable to file a return. To the
contrary, petitioner was regularly employed by the city of
Pembroke Pines and worked as an income tax return preparer during
the years 1985 through 1987. He even stated at trial that he was
physically able to file a return during those years in issue.
While we are sympathetic to petitioner's physical condition
during the years 1985 through 1987, we are unable to find that he
was so ill that he could not file a return. Consequently, we
hold that petitioners have not shown they had reasonable cause
for failing to file their Federal income tax returns in a timely
manner.
Having found that petitioners did not file timely Federal
income tax returns for 1985 through 1987, and that there was no
reasonable cause for their failure to do so, it follows that they
are liable for the additions to tax under section 6651(a)(1).
Therefore, it is not necessary to decide whether their failure
was due to willful neglect. United States v. Boyle, 469 U.S. at
245.
To reflect the foregoing,
Decision will be
entered under Rule 155.