T.C. Summary Opinion 2001-79
UNITED STATES TAX COURT
JAMES D. FOX, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13515-99S. Filed June 5, 2001.
James D. Fox, pro se.
Joseph J. Boylan, for respondent.
DEAN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect at the time the petition was filed. Unless otherwise
indicated, subsequent section references are to the Internal
Revenue Code in effect for the year at issue. Rule references
are to the Tax Court Rules of Practice and Procedure. The
decision to be entered is not reviewable by any other court, and
this opinion should not be cited as authority.
Respondent determined a deficiency in petitioner's Federal
income tax for 1996 of $10,351; and additions to tax under
section 6651(a)(1) of $1,571.85, under section 6651(a)(2) of
$698.60, and under section 6654 of $356.05.
The parties agree that petitioner's income tax deficiency,
without taking into account respondent's assessment of tax
subsequent to the mailing of the notice of deficiency on May 18,
1999, is $6,110, that respondent made an assessment of income tax
on May 29, 2000, of $2,599, and that petitioner's income tax
deficiency to be assessed is $3,511. The parties also agree that
there is no addition to tax due from the petitioner under the
provisions of section 6654.
The issues for decision are whether petitioner filed his
Federal income tax return timely and timely paid his income tax
due for 1996.
Background
Some of the facts have been stipulated and are so found, and
the accompanying exhibits are incorporated herein by reference.
At the time the petition was filed, petitioner resided in
Princeton, New Jersey.
In his petition, with respect to his 1996 Federal income tax
return, petitioner alleges that "extension was file [sic]
including $200 check, return was sent before 8/96". In his trial
memorandum, petitioner alleges that he "filed a timely [1996]
return on or about July 15, 1996", requesting that the
"calculated credit, less than $100, be applied to subsequent
years." At trial, after the premature date was questioned by
respondent's counsel, petitioner argued that his trial memorandum
should have alleged that his 1996 return was filed on July 15,
1997. He did not explain the premature date alleged in his
petition.
In the stipulation of facts, petitioner agrees that
"Petitioner filed his U.S. Individual Income Tax Return for the
taxable year 1996 on April 28, 2000, the date it was received by
respondent's Appeals Division." The exhibit attached to the
stipulation as a copy of petitioner's 1996 return indicates that
petitioner is due a refund of $666. There is no indication on
the stipulated return copy that any amount is to be credited to
future tax years.
Respondent introduced a certified copy of a transcript in
petitioner's name for tax year 1996. The certified copy of the
transcript indicates that as claimed in the petition, petitioner
filed for an extension of time to file on April 15, 1997,
accompanied by a payment of $100. The transcript also indicates
"no return filed substitute for return" entered on October 19,
1998, and that petitioner failed to file a return until April 28,
2000.
Petitioner argues that he mailed his return before the
extended filing date, albeit without requesting a return receipt.
Despite petitioner's argument, the evidence in the record weighs
against him. Petitioner did not explain why the stipulated copy
of his 1996 return shows that he is due a refund of $666 when he
alleged that his timely 1996 return "calculated credit, less than
$100, [to] be applied to subsequent years." Although he argues
that he filed his request for extension of time to file with a
$200 payment, respondent's records indicate that the request for
an extension was filed, but with a $100 payment.
Aside from the above factual discrepancies, petitioner
failed to explain at trial why he stipulated that he "filed his
U.S. Individual Income Tax Return for the taxable year 1996 on
April 28, 2000, the date it was received by respondent's Appeals
Division." Respondent's transcript of account indicates all of
the contacts petitioner alleges he had with the Internal Revenue
Service for his 1996 tax year, except for the filing of a Federal
income tax return before April 28, 2000.
It is the duty of the Court to listen to testimony, observe
the demeanor of witnesses, weigh the evidence, and determine what
to believe. The Court is not required to accept testimony at
face value, and the Court may discount a party's self-interested
testimony and place reliance on other evidence which is believed
to be more reliable. See Christensen v. Commissioner, 786 F.2d
1382, 1383-1384 (9th Cir. 1986), affg. in part and remanding in
part T.C. Memo. 1984-197; Niedringhaus v. Commissioner, 99 T.C.
202, 212 (1992); Duralia v. Commissioner, T.C. Memo. 1994-269.
The Court finds that petitioner failed to file timely a
Federal income tax return for the year 1996.
In addition to the argument that he in fact timely filed his
return, petitioner makes several spurious arguments. He takes
the position that he should not be subject to the additions to
tax for not filing timely because: (1) He cannot get a fair
trial in the Tax Court because the Judges are paid from tax
revenues and are therefore biased; (2) there is waste and
mismanagement in the Internal Revenue Service and the Government
at large; (3) Mark Rich received a Presidential pardon; and (4)
American corporations pay presently a smaller share of the total
tax burden than in years past.
Section 6651(a)(1) imposes an addition to tax for failure to
file timely a Federal income tax return unless the taxpayer shows
that such failure was due to reasonable cause and not willful
neglect. See, United States v. Boyle, 469 U.S. 241, 245 (1985).
To prove "reasonable cause", a taxpayer must show that he
exercised ordinary business care and prudence and was
nevertheless unable to file the return within the prescribed
time. Crocker v. Commissioner, 92 T.C. 899, 913 (1989); sec.
301.6651-1(c)(1), Proced. & Admin. Regs.
Congress has specifically charged the Tax Court with the
duty to decide certain income tax matters. See sec. 7442.
Petitioner, knowing that the Judges of the Court are compensated
by the Federal Government, chose to avail himself of the
opportunity to file a petition with the Court. See sec. 6213.
Petitioner has offered only his bald assertion that, but no
explanation of why, compensation of judges by the Federal
Government financed, in part, by tax revenues1 creates a bias
requiring Federal judges to recuse themselves from tax cases.
There is no such bias requiring Federal judges to recuse
themselves in all cases relating to the collection of tax
revenues. See United States v. Bell, 80 AFTR 2d 97-6455 (E.D.
Cal. 1997).
Petitioner's other arguments fall into the category of
"because I think someone else is getting away with something, I
should, too." None of the specious arguments cited by
petitioner, even if true, show that he exercised ordinary
business care and prudence and was nevertheless unable to file
his return within the prescribed time.
The Court finds that petitioner, without reasonable cause,
failed to timely file a Federal income tax return for 1996 and
1
The Federal Government receives, in addition to taxes,
funds from items such as customs duties, civil and criminal fines
and penalties, fees, interest, proceeds from the lease and sale
of Government property, amounts recovered due to legal actions,
and borrowed funds.
holds that he is liable for the addition to tax determined by
respondent under section 6651(a)(1).
Respondent determined in the notice of deficiency that under
section 6651(a)(2) petitioner failed to pay timely the amount
shown as tax on a Federal income tax return for 1996. We have
found that petitioner did not file a Federal income tax return
for 1996 until after the notice of deficiency was issued, and
there is no evidence that respondent prepared for petitioner a
return under the authority of section 6020(b). See sec. 6651(g);
sec. 301.6651-1(g), Proced. & Admin. Regs. Because no return for
petitioner was filed, the addition to tax under section
6651(a)(2) does not apply. See Johnson v. Commissioner, T.C.
Memo. 1983-398; see also, e.g., Estate of Hinz v. Commissioner,
T.C. Memo. 2000-6. Petitioner is not liable for the addition to
tax under section 6651(a)(2).
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be
entered under Rule 155.