T.C. Memo. 1998-237
UNITED STATES TAX COURT
JOHN MINOR, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 12653-96. Filed July 2, 1998.
John Minor, pro se.
John J. Boyle, for respondent.
MEMORANDUM OPINION
DINAN, Special Trial Judge: This case was heard pursuant
to the provisions of section 7443A(b)(3) and Rules 180, 181, and
182.1
1
Unless otherwise indicated, all section references are
to the Internal Revenue Code in effect for the taxable years in
issue. All Rule references are to the Tax Court Rules of
Practice and Procedure.
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Respondent determined deficiencies in petitioner's Federal
income taxes and additions to tax for the years indicated:
Addition to Tax
Year Deficiency Sec. 6651(a)(1)
1990 $739 $101
1991 949 100
1992 1,174 118
1993 1,391 114
The issues for decision are: (1) Whether petitioner
received and failed to report income for the taxable years in
issue; and (2) whether petitioner is liable for the section
6651(a)(1) additions to tax for the taxable years in issue.
Some of the facts have been stipulated and are so found.
The stipulations of fact and attached exhibits are incorporated
herein by this reference. Petitioner resided in Indianola,
Mississippi, on the date the petition was filed in this case.
Petitioner worked for Gresham Service Stations, Inc. (GSS)
in Indianola during 1990, 1991, and 1992. He also worked for
Double Quick, Inc. (DQ) in Indianola during 1992 and 1993. The
corporations reported on Forms W-2 and later verified in letters
to respondent that petitioner earned wages in the following
amounts during the taxable years in issue:
Year GSS DQ
1990 $ 9,684 -
1991 11,344 -
1992 5,062 $ 8,075
1993 - 14,748
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The first issue for decision is whether petitioner received
and failed to report income during the taxable years in issue.
Respondent's determinations in the statutory notice of deficiency
are presumed to be correct, and petitioner bears the burden of
proving otherwise. Rule 142(a); Welch v. Helvering, 290 U.S.
111, 115 (1933).
Section 61(a) includes in gross income all income from
whatever source derived including, but not limited to,
compensation for services. Sec. 61(a)(1). At trial, petitioner
admitted that he earned the amounts reported on the Forms W-2 and
determined by respondent in the statutory notice of deficiency to
be includable in his gross income. Petitioner claims, however,
that he is entitled to a deduction for the amounts of his wages
which were allegedly garnished by order of a Mississippi State
court.
Based on the record, we find that petitioner has failed to
prove any error in respondent's determinations. According to his
testimony, his wages were garnished to repay loan proceeds which
he obtained by forging the signature of another person. We find
his claim to a deduction for amounts which he is required to pay
to such person to be without merit. An employer's payment of an
obligation of the taxpayer is equivalent to the taxpayer's
receipt of income in the amount so paid. Old Colony Trust Co. v.
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Commissioner, 279 U.S. 716 (1929). Respondent's determinations
on this issue are sustained.
The second issue for decision is whether petitioner is
liable for the section 6651(a)(1) additions to tax for the
taxable years in issue.
Section 6651(a)(1) imposes an addition to tax for failure to
timely file a return, unless the taxpayer establishes that such
failure is due to reasonable cause and not due to willful
neglect. "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.
United States v. Boyle, 469 U.S. 241, 245-246 (1985). "[W]illful
neglect" means a conscious, intentional failure or reckless
indifference. Id. at 246. The addition to tax equals 5 percent
of the tax required to be shown on the return if the failure to
file is for not more than 1 month, with an additional 5 percent
for each additional month or fraction of a month during which the
failure to file continues, not to exceed a maximum of 25 percent.
Sec. 6651(a)(1).
Petitioner did not address at trial respondent's
determinations that he is liable for the section 6651(a)(1)
additions to tax. We therefore find that he has failed to prove
that his failure to file his returns was not due to willful
neglect or that such failure was due to reasonable cause.
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Accordingly, we hold that petitioner is liable for the section
6651(a)(1) additions to tax for the taxable years in issue.
To reflect the foregoing,
Decision will be entered
for respondent.