T.C. Memo. 2000-158
UNITED STATES TAX COURT
RANDOLPH JOHN BEALE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 18290-98. Filed May 17, 2000.
Randolph John Beale, pro se.
Felicia L. Branch, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
PARR, Judge: Respondent determined deficiencies in and
additions to petitioner's Federal income taxes as follows:
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Additions to Tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654
1992 $14,966 $1,816.25 -0-
1993 17,412 2,399.75 $365.81
1994 17,336 2,569.75 492.70
1
1995 15,202 1,466.25 261.76
1
The deficiency amounts listed above do not reflect Federal
income tax withheld from petitioner's wages. See, e.g., sec.
301.6215-1, Proced. & Admin. Regs., which provides that "the
entire amount redetermined as the deficiency by the decision of
the Tax Court which has become final shall be assessed," while
only "the unpaid portion of the amount so assessed shall be paid
by the taxpayer upon notice and demand therefor." (Emphasis
added.)
The issues for decision are: (1) Whether amounts paid as
"family support" were alimony and, therefore, deductible by
petitioner. We hold that certain of these amounts were
deductible by petitioner in the amounts stated. (2) Whether
petitioner may deduct various Schedule C, Profit or Loss From
Business, expenses for the taxable years at issue. We hold he
may not. (3) Whether petitioner is entitled to claim additional
exemptions for his spouse and her two daughters for taxable years
1993 through 1995.1 We hold he is not. (4) Whether petitioner
is entitled to head-of-household filing status in 1993 and
married filing joint return status in 1994 and 1995. We hold he
is not. (5) Whether petitioner is liable for additions to tax
1
The parties stipulated that petitioner was unmarried during
taxable years 1992 and 1993. For taxable year 1992, the proper
filing status of petitioner is "single". For taxable year 1993,
the proper filing status of petitioner is still at issue.
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under section 6651(a)2 for failure to timely file his Federal
income tax returns for the taxable years in issue. We hold he
is. (6) Whether petitioner is liable for additions to tax under
section 6654 for failure to pay estimated tax for the taxable
years in issue. We hold he is.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time the petition
herein was filed, petitioner resided in Chuluota, Florida.
Petitioner did not file Federal income tax returns for the
years in issue.
At various times during the years in issue, petitioner was
employed full time as an engineer for the following companies:
Linde Hydraulics Corp. (Linde), Hartmann Controls, Inc.
(Hartmann), Motiontek, Inc. (Motiontek), and Worksmart, Inc.
(Worksmart). Petitioner earned income from his full-time
employment as follows:
2
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years at issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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Employer 1992 1993 1994 1995
Linde $57,840 $58,167 $60,585 –-
Hartmann –- –- 4,469 $14,606
Motiontek –- –- –- 10,400
Worksmart -- –- –- 35,476
For taxable years 1992, 1993, and 1994, Linde withheld Federal
income taxes of $7,701, $7,813, and $5,925, respectively, from
petitioner's wages. Additionally, for taxable year 1994,
Hartmann withheld Federal income tax of $857, and for taxable
year 1995, Hartmann, Motiontek, and Worksmart withheld Federal
income tax of $2,845, $900, and $5,592, respectively.
In addition to his full-time employment, petitioner
performed services as an engineering consultant. Petitioner's
consulting business involved working principally for two
companies: Tri-State Hydraulics, Inc. (Tri-State), and American
Fluid Power, Inc. (American). To perform his business services,
petitioner would travel by automobile from his home to
approximately nine client sites in Wisconsin and Illinois.
Petitioner earned nonemployee compensation from his consulting
services as follows:
Employer 1992 1993 1994
Tri-State $6,600 $12,626 $7,000
American 263 1,767 1,212
Petitioner operated his consulting business out of a garage
attached to his residence. The garage contained a desk, a
drafting table, two phones, and filing cabinets. The garage made
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up 15 percent of the total square footage of petitioner's rental
house. During the years in issue petitioner's total annual
housing costs were as follows:
Year Rent Gas Electricity
1992 $7,200 $1,440 $540
1993 7,200 1,500 600
1994 8,700 1,560 660
1995 (not in record)
For 1992 through 1994, petitioner calculated a home office
deduction by multiplying the total costs of rent and utilities by
15 percent.
In addition to his employee and nonemployee compensation,
petitioner received earned interest income from Security Bank,
S.S.B., of $72 in 1992, $76 in 1993, $77 in 1994, and $83 in
1995. Petitioner also received $47 in interest income from
Cornerstone Credit Union in 1995. Finally, petitioner received
$6,916 in unemployment compensation during 1995.
During the years in issue, petitioner made regular payments
to two former wives. Petitioner was divorced from his first
wife, Ms. Sandra Eads, in 1981. Pursuant to a valid, enforceable
divorce judgment filed on May 15, 1981, petitioner is required to
pay Ms. Eads $650 per month as "family support". The judgment
provides in relevant part:
Sixth. The petitioner shall pay to the respondent as
and for family support the sum of Six Hundred Fifty
Dollars ($650.00) per month. Said sum shall be paid
through the Clerk of the Circuit Court of Milwaukee
County on the 5th day of each month, commencing May 5,
1981. Said payments, being for family support shall be
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tax deductible to the petitioner, and taxable to the
respondent [Ms. Eads] on their respective federal and
state income tax returns. * * *
For the taxable years at issue, Ms. Eads included the following
payment amounts as alimony on her Federal income tax returns:
$7,250 in 1992, $7,250 in 1993, $7,200 in 1994, and $3,199 in
1995. Petitioner agrees that these are the amounts he actually
paid.
Petitioner was divorced from his second wife, Ms. Susan
Tang, in May 1989. He was required to pay $400 per month in
"family support". Petitioner had an "agreement in principle"
with Ms. Tang that she would include the payments to her as
income on her Federal income tax return, and petitioner would
claim a deduction for these payments on his Federal income tax
return.
Petitioner was not married at the end of taxable years 1992
and 1993; however, petitioner was married at the end of taxable
years 1994 and 1995. Petitioner's third wife has two daughters.
OPINION
Petitioner has the burden of proof with regard to all the
issues raised in this case. See Rule 142(a).
Issue 1. Whether Petitioner Is Entitled to Alimony Deductions
During the Years in Issue
In this case, petitioner made "family support" payments to
both Ms. Eads and Ms. Tang. Petitioner claims that the amounts
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he paid to Ms. Eads and Ms. Tang were deductible as alimony
during the years in issue under section 215.
Ms. Eads
Section 2153 provides a deduction for amounts paid by a
taxpayer to a former spouse if the payee spouse is required to
include these amounts in gross income under section 71.4
3
Sec. 215 was amended by the Deficit Reduction Act of 1984
(DEFRA), Pub. L. 98-369, sec. 422(b), 98 Stat. 494, 797. The
amendment applies to divorce or separation instruments (as
defined in sec. 71(b)(2), as amended) executed after Dec. 31,
1984, or executed before Jan. 1, 1985, but modified on or after
that date if the modification expressly provides that the
amendments to sec. 215 apply to the modification. This
amendment is not applicable to petitioner's divorce from Ms.
Eads, and references to sec. 215 are to this section before its
amendment.
4
Sec. 71 was amended by DEFRA sec. 422(a), 98 Stat. 795.
The amendment applies to divorce or separation instruments (as
defined in sec. 71(b)(2), as amended) executed after Dec. 31,
1984, or executed before Jan. 1, 1985, but modified on or after
that date if the modification expressly provides that the
amendments to sec. 71 apply to the modification. This amendment
is not applicable to petitioner's divorce from Ms. Eads, and
references to sec. 71 are to this section before its amendment.
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Section 71(a)(1)5 provides for inclusion in the payee
spouse's gross income of periodic payments received by that
spouse pursuant to a decree of divorce or separate maintenance in
discharge of a legal obligation imposed on or incurred by the
payor spouse under the decree or under a written instrument
incident to the divorce or separation. Child support payments
are generally not includable in the payee spouse's income and are
not deductible by the payor spouse. When the decree, instrument,
or agreement incident to the divorce covers both alimony payments
to the payee spouse and child support payments, those periodic
payments are deductible by the payor spouse, and taxable to the
payee spouse, unless the terms of the decree, instrument, or
agreement fix an amount for the support of the minor children of
the former spouses. See sec. 71(b);6 Commissioner v. Lester, 366
5
SEC. 71. ALIMONY AND SEPARATE MAINTENANCE PAYMENTS.
(a) General Rule.--
(1) Decree of Divorce or Separate Maintenance.–If a
wife is divorced or legally separated from her husband under
a decree of divorce or of separate maintenance, the wife's
gross income includes periodic payments (whether or not made
at regular intervals) received after such decree in
discharge of (or attributable to property transferred, in
trust or otherwise, in discharge of) a legal obligation
which, because of the marital or family relationship, is
imposed on or incurred by the husband under the decree or
under a written instrument incident to such divorce or
separation.
6
SEC. 71. ALIMONY AND SEPARATE MAINTENANCE PAYMENTS.
(continued...)
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U.S. 299 (1961). The amount of child support must be fixed "in
terms of an amount of money or a part of the payment" in order
for it to be excludable from the payee spouse's income and
nondeductible by the payor spouse. Sec. 71(b). The statutory
requirement is strict and carefully worded.
In Commissioner v. Lester, supra, the Supreme Court held
that periodic payments made by a husband to his divorced wife
pursuant to a written agreement entered into by them and approved
by the divorce court were deductible by the husband, as alimony,
and includable in the wife's gross income where an amount or
portion of the periodic payments was not specifically earmarked
as payable for the support of the children.7
6
(...continued)
(b) Payments to Support Minor Children.-–Subsection (a)
shall not apply to that part of any payment which the terms
of the decree, instrument, or agreement fix, in terms of an
amount of money or a part of the payment, as a sum which is
payable for the support of minor children of the husband.
For purposes of the preceding sentence, if any payment is
less than the amount specified in the decree, instrument, or
agreement, then so much of such payment as does not exceed
the sum payable for support shall be considered a payment
for such support.
7
For divorce or separation agreements executed after Dec.
31, 1984, Congress overruled Commissioner v. Lester, 366 U.S. 299
(1961), in that the amount by which support is reduced upon
contingencies involving a child is treated as "fixed" as child
support. See sec. 71(c), as amended by DEFRA sec. 422(a). The
aforesaid is also true with respect to divorce or separation
instruments (as defined in sec. 71(b)(2), as amended) executed
before Jan. 1, 1985, but modified on or after that date if the
modification expressly provides that the amendments to sec. 71
(continued...)
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In this case, the divorce judgment related to petitioner's
divorce from Ms. Eads provides for unallocated payments of
"family support" from petitioner to Ms. Eads. In Wisconsin an
award of "family support" includes both child support and
maintenance (i.e., alimony). See Wis. Stat. sec. 767.261 (1999).
The divorce judgment did not designate how much of the "family
support" award was for maintenance and how much was for child
support. The divorce judgment contains no provision reducing the
"family support" payments if a contingency related to the
children occurs. Finally, the divorce judgment specifically
states that the "family support" payments are "taxable" to Ms.
Eads and "tax deductible" by petitioner on "their respective
federal and state income tax returns." Accordingly, under Lester
v. Commissioner, supra, Ms. Eads was required to include
petitioner's payments in her gross income during the years at
issue, and petitioner is entitled to a deduction for those
payments under section 215.
Ms. Tang
Section 2158 provides for a deduction for an amount paid by
a taxpayer to a former spouse if the former spouse is required to
7
(...continued)
apply to that modification.
8
Since petitioner and Ms. Tang divorced in May 1989, we must
apply secs. 71 and 215 as amended by DEFRA sec. 422(a) and (b),
respectively.
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include these amounts in gross income under section 71.
Therefore, to demonstrate that a cash payment is deductible under
section 215, a taxpayer must prove, inter alia, that the payment
was made pursuant to a written divorce or separation instrument
that did not designate the payment as not includable in the payee
spouse's gross income under section 71. See sec. 71(b)(1)(A) and
(B).
Petitioner was required to pay Ms. Tang $400 per month as
"family support". Although we would ordinarily review the
divorce instruments and other documents to determine whether the
payments made by petitioner to Ms. Tang were alimony, petitioner
did not provide us with divorce instruments or other documents,
such as Ms. Tang's Federal income tax returns during the years in
issue, to prove that Ms. Tang was required to include the "family
support" payments as income pursuant to section 71. In addition,
petitioner did not call Ms. Tang to testify. Accordingly,
petitioner is not allowed a deduction for the "family support"
payments to Ms. Tang.
Issue 2. Whether Petitioner May Deduct Various Schedule C
Expenses
Petitioner claims the following expenses related to his
consulting business as Schedule C, Profit and Loss From Business,
deductions:
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1992 1993 1994 1995
Home office expense:
Rent $1,080 $1,080 $1,305 –-
Utilities 297 315 333 –-
Telephone –- –- 100 $720
Office supplies 200 400 1,120 100
Car and truck expense 3,500 4,002 2,850 2,108
Travel 120 180 –- –-
Meals and entertainment 640 960 425 300
Home Office Expenses
Section 162(a) allows a deduction for ordinary and necessary
business expenses paid or incurred during the taxable year in
carrying on a trade or business. Section 280A generally
prohibits the deduction of otherwise allowable expenses with
respect to the use of an individual taxpayer’s home. Section
280A(c)(1) provides a narrow exception to the disallowance of
home office deductions where a taxpayer can establish that a
portion of the home is used exclusively on a regular basis as:
(1) The taxpayer’s principal place of business,9 or (2) a place
of business which is used by clients or customers in meeting or
dealing with the taxpayer in the normal course of business.
9
For home office expenses incurred in taxable years after
Dec. 31, 1998, Congress overruled Commissioner v. Soliman, 506
U.S. 168 (1993), in that the term "principal place of business"
now includes a place of business used by the taxpayer to perform
administrative or management activities related to the taxpayer's
trade or business if there is no other fixed location of the
taxpayer's trade or business where substantial administrative or
management activities are undertaken. See sec. 280A(c), as
amended by the Taxpayer Relief Act of 1997, Pub. L. 105-34, sec.
932(a), 111 Stat. 788, 881.
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We conclude that petitioner did not meet his burden of proof
with respect to his home office deductions. Petitioner operated
his consulting business out of a garage attached to his
residence. Where a taxpayer's business is conducted in part in
the taxpayer's residence and in part at another location, the
following two primary factors are considered in determining
whether the home office qualifies under section 280A(c)(1)(A) as
the taxpayer's principal place of business: (1) The relative
importance of the functions or activities performed at each
business location, and (2) the amount of time spent at each
location. See Commissioner v. Soliman, 506 U.S. 168, 175-177
(1993).
Whether the functions or activities performed at the home
office are necessary to the business is relevant but not
controlling, and the location at which goods and services are
delivered to customers generally will be regarded as an important
indicator of the principal place of a taxpayer's business, which
must be given great weight and is a principal consideration in
most cases. See id. at 175, 176. The relative importance of
business activities engaged in at the home office may be
substantially outweighed by business activities engaged in at
another location. The Supreme Court has explained:
If the nature of the business requires that its
services are rendered or its goods are delivered at a
facility with unique or special characteristics, this
is a further and weighty consideration in finding that
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it is the delivery point or facility, not the
taxpayer's residence, where the most important
functions of the business are undertaken. [Id. at
176.]
In this case, petitioner provided no evidence as to how many
hours he worked at home compared to hours he visited clients'
business sites. Although he presumably kept records, made
telephone calls, and perhaps did some drafting at his home
office, this evidence is insufficient to allow us to determine
whether petitioner performed most or the most important of his
consulting services in his attached garage or at his clients'
business sites. Accordingly, in the absence of proving that his
residence was his "principal place of business", petitioner is
not entitled to deductions for the home office expenses.
Automobile Expenses
For each year in issue, petitioner claims expenses for
mileage associated with driving his automobile from his residence
to various client locations while pursuing his consulting
business. Respondent disallowed all of petitioner's claimed
expenses.
It is well settled that, as a general rule, the expenses of
traveling between one's home and his place of business or
employment constitute commuting expenses which are nondeductible,
personal expenses. See sec. 262; Fausner v. Commissioner, 413
U.S. 838 (1973); Commissioner v. Flowers, 326 U.S. 465 (1946);
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Feistman v. Commissioner, 63 T.C. 129 (1974); Sullivan v.
Commissioner, 1 B.T.A. 93 (1924).
This Court has previously held that a taxpayer's cost of
transportation between his residence and local job sites may be
deductible if his residence serves as his "principal place of
business" and the travel is in the nature of normal and
deductible business travel. See Wisconsin Psychiatric Servs.,
Ltd. v. Commissioner, 76 T.C. 839, 849 (1981); Curphey v.
Commissioner, 73 T.C. 766, 777-778 (1980); Heuer v. Commissioner,
32 T.C. 947, 953 (1959), affd. per curiam 283 F.2d 865 (5th Cir.
1960).
In Walker v. Commissioner, 101 T.C. 537 (1993), where the
taxpayer's residence was considered his "regular" place of
business rather than his "principal" place of business, the
taxpayer was allowed to deduct transportation expenses incurred
between his residence and local, temporary job sites. However,
as we stated in Strohmaier v. Commissioner, 113 T.C. 106, 114
(1999):
the conclusion in Walker was based on a concession of
the issue by the Commissioner based on Rev. Rul 90-23,
1990-1 C.B. 28. This revenue ruling has subsequently
been amended to reflect existing case law as
articulated above. See Rev. Rul. 94-47, 1994-2 C.B.
18.
Accordingly, to be entitled to deduct automobile expenses,
petitioner must prove that his residence was used as his
"principal place of business". Since petitioner was unable to do
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so, it follows that the mileage expenses for each year are
nondeductible commuting expenses.
Travel, Meals, and Entertainment
For 1992 and 1993, petitioner claims $120 and $180,
respectively, for travel expenses, and $640 and $960,
respectively, for meals and entertainment expenses. For 1994 and
1995, petitioner claims $425 and $300, respectively, for meals
and entertainment expenses. Respondent disallowed all of
petitioner's claimed expenses.
A taxpayer is required under section 274(d) to substantiate
travel, meals, and entertainment expenses by either adequate
records or sufficient evidence corroborating the taxpayer's own
statement as to: (1) The amount of the expense, (2) the time and
place the expense was incurred, (3) the business purpose of the
expense, and (4) the business relationship to the taxpayer of
each expense incurred. In the absence of evidence meeting these
strict substantiation requirements, deductions for travel, meals,
and entertainment expenses are not allowed. See Whalley v.
Commissioner, T.C. Memo. 1996-533; sec. 1.274-5T(b)(4), Temporary
Income Tax Regs., 50 Fed. Reg. 46015 (Nov. 6, 1985).
Other than his oral testimony, petitioner did not provide
substantiation of his expenses for travel, meals, and
entertainment. Accordingly, petitioner has failed to meet the
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requirements of section 274(d), and we, therefore, sustain
respondent’s determination for the taxable years in issue.
Issue 3. Whether Petitioner Is Entitled To Claim Additional
Exemptions for His Spouse and Her Two Daughters for Taxable Years
1993 Through 1995
1993
In 1993, petitioner was engaged to be married to the woman
who would become his wife in May 1994. Because of the support he
purportedly provided to his fiancee and her two daughters,
petitioner claims that he is entitled to additional dependency
exemptions in 1993. Respondent did not allow additional
dependency exemptions for petitioner's fiancee and her daughters.
Section 151(c) allows a taxpayer, subject to certain
requirements, a deduction for a personal exemption for each of
the taxpayer’s dependents as defined in section 152. A dependent
is defined as an individual over half of whose total support is
received from the taxpayer, and who must either be related to the
taxpayer in one of the ways enumerated in section 152(a)(1)
through (8) or be a member of the taxpayer’s household within the
meaning of section 152(a)(9). See sec. 152(a).
In 1993, petitioner was not related to his fiancee or her
two daughters by blood or marriage, nor was he their adoptive or
foster father. Accordingly, to claim his fiancee and her
daughters as dependents in 1993, petitioner must establish, inter
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alia, that these individuals were members of petitioner’s
household within the meaning of section 152(a)(9).
Section 1.152-1(b), Income Tax Regs., provides that section
152(a)(9) applies to any individual who lived with the taxpayer
and was a member of the taxpayer’s household during the entire
taxable year of the taxpayer. Petitioner offered no evidence
that his fiancee and her daughters were members of his household
or that their principal place of abode was his home throughout
1993. Accordingly, petitioner is not entitled to claim his
fiancee and her daughters as dependents in 1993.
1994 and 1995
Petitioner married his fiancee in May 1994 and was married
to her at the end of taxable years 1994 and 1995. For 1994 and
1995, petitioner claims an exemption for his spouse, as well as
additional exemptions for both of his stepdaughters. Respondent
denied the exemptions.
Section 151(b) provides that a taxpayer may take an
exemption for a spouse if the taxpayer and his spouse did not
file a joint return, the spouse had no gross income for the tax
year in question, and the spouse was not a dependent of any other
person. Petitioner and his wife did not file joint returns for
taxable years 1994 and 1995. However, the record does not show
whether petitioner's spouse had any gross income for either 1994
or 1995 or whether any other person could claim her as a
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dependent for either year. We therefore sustain respondent’s
determination that petitioner is not entitled to an additional
exemption for his spouse for taxable years 1994 and 1995.
To claim additional exemptions for his stepdaughters,
petitioner must prove that he provided more than one-half of
their total support in 1994 and 1995. See sec. 152(a)(2). In
applying the support test, we evaluate the amount of support
furnished by the taxpayer as compared to the total amount of
support received by the claimed dependent from all sources. See
Turecamo v. Commissioner, 554 F.2d 564, 569 (2d Cir. 1977), affg.
64 T.C. 720 (1975); sec. 1.152-1(a)(2)(i), Income Tax Regs. In
other words, in order to establish that the taxpayer provided
more than one-half of the claimed dependent’s support, the
taxpayer must first show, by competent evidence, the total amount
of support received by the claimed dependent from all sources
during the year in issue. Otherwise, the taxpayer cannot be said
to have established that he or she provided more than one-half of
the support for the claimed dependent. See, e.g., Blanco v.
Commissioner, 56 T.C. 512, 514-515 (1971); Seraydar v.
Commissioner, 50 T.C. 756, 760 (1968); Stafford v. Commissioner,
46 T.C. 515, 518 (1966).
Petitioner presented no evidence that he provided more than
one-half of the support for his stepdaughters during taxable
years 1994 and 1995. Accordingly, petitioner's claim to
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additional dependency exemptions for his stepdaughters for
taxable years 1994 and 1995 is denied.
Issue 4. Whether Petitioner Is Entitled to Head of Household
Filing Status in 1993 and Married Filing Joint Return Filing
Status in 1994 and 1995
1993
Petitioner claimed at trial that he was entitled to head-of-
household filing status in 1993. Respondent contends that
petitioner's filing status in 1993 was "single".
In order to qualify for head-of-household filing status,
petitioner must satisfy the requirements of section 2(b).
Pursuant to that section, and as relevant herein, an individual
qualifies as a head of household if the individual is not married
at the close of the taxable year and maintains as his home a
household that constitutes for more than one-half of the taxable
year the principal place of abode of an individual who qualifies
as the taxpayer’s dependent within the meaning of section 151.
See sec. 2(b)(1)(A)(ii). However, a taxpayer is not considered
to be a head of household by reason of an individual who would
not be a dependent for the taxable year but for section 152(a)(9)
(i.e., an individual not related by blood or marriage who is a
member of the taxpayer's household). See sec. 2(b)(3)(B)(i).
Since petitioner is not entitled to dependency exemptions
for his fiancee and her two daughters during 1993, he does not
qualify as a head of household. Even if petitioner were entitled
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to the dependency exemptions under section 152(a)(9), he would
still not qualify, as a matter of law, as a head of household
because of the limitation set forth in section 2(b)(3)(B)(i).
Accordingly, petitioner is not entitled to head-of-household
filing status but rather must use "single" filing status for
taxable year 1993.
1994 and 1995
For taxable years 1994 and 1995, petitioner claims that he
is entitled to married filing joint return status. In the notice
of deficiency, respondent determined that petitioner's filing
status was "married filing separately".
Section 1(a) provides that the filing status married filing
joint return applies only to "every married individual * * * who
makes a single return jointly with his spouse under section
6013". From this language, it is clear that married taxpayers
who fail to file returns are not entitled to married filing joint
return tax rates. See Martinez v. Commissioner, T.C. Memo. 1998-
199, affd. 198 F.3d 242 (5th Cir. 1999); Collins v. Commissioner,
T.C. Memo. 1994-409; Ebert v. Commissioner, T.C. Memo. 1991-629,
affd. without published opinion 986 F.2d 1427 (10th Cir. 1993);
Hess v. Commissioner, T.C. Memo. 1989-167; see also Phillips v.
Commissioner, 86 T.C. 433, 441 n.7 (1986), affd. in part and
revd. in part on another ground 851 F.2d 1492 (D.C. Cir. 1988).
The parties stipulated that petitioner failed to file returns
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during the years in issue. Moreover, petitioner testified that
his wife has not indicated any desire to file a joint return with
him. We therefore sustain respondent’s determination that
petitioner’s filing status is "married filing separately" for
taxable years 1994 and 1995.
Issue 5. Failure To Timely File Tax Return
Petitioner admits he did not file tax returns for any of the
years in issue and that he has income tax liability. Section
6651(a) imposes an addition to tax for failure to timely file a
return, unless the taxpayer establishes: (1) The failure did not
result from willful neglect; and (2) the failure was due to
reasonable cause. See United States v. Boyle, 469 U.S. 241, 245-
246 (1985). Petitioner bears the burden of proof on this issue.
See Rule 142(a); Baldwin v. Commissioner, 84 T.C. 859, 870
(1985). Petitioner failed to prove reasonable cause for his
failure to file.
Respondent's computation of the addition to tax in the
notice of deficiency does take into consideration petitioner’s
withholding tax credits, as is required by section 6651(b)(1).
See sec. 301.6651-1(d)(1), Proced. & Admin. Regs. Accordingly,
the addition to tax for failure to file returns under section
6651(a), as it will be modified in a Rule 155 computation, is
sustained.
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Issue 6. Failure To Pay Estimated Income Tax
Respondent determined that petitioner was liable for the
addition to tax under section 6654(a) for failure to pay
estimated tax for the years in issue. Where payments of tax,
either through withholding or by making estimated quarterly tax
payments during the course of the year, do not equal the
percentage of total liability required under the statute,
imposition of the addition to tax under section 6654(a) is
automatic, unless petitioner shows that one of the statutory
exceptions applies. See Niedringhaus v. Commissioner, 99 T.C.
202, 222 (1992); Habersham-Bey v. Commissioner, 78 T.C. 304, 319-
320 (1982); Grosshandler v. Commissioner, 75 T.C. 1, 20-21
(1980). None of the exceptions applies. We therefore sustain
respondent on this issue.
Decision will be entered
under Rule 155.