T.C. Memo. 2003-105
UNITED STATES TAX COURT
ROBERT RODRIGUEZ, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13645-01. Filed April 17, 2003
Robert Rodriguez, pro se.
Jonae A. Harrison, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
LARO, Judge: Petitioner petitioned the Court to redetermine
respondent’s determinations of deficiencies in petitioner’s 1994,
1995, and 1996 Federal income taxes and additions thereto. These
determinations are as follows:
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Additions to Tax
Years Deficiencies Sec. 6651(a)(1) Sec. 6651(a)(2) Sec. 6654(a)
1994 $1,449 $333.50 -- --
1995 2,711 669.75 -- $146.01
1996 2,573 505.12 $527.57 117.51
Section references are to the applicable versions of the
Internal Revenue Code. Rule references are to the Tax Court
Rules of Practice and Procedure.
We decide:
1. Whether petitioner had unreported income of $15,287,
$24,471, and $23,701 determined by respondent for the respective
years. We hold he did.
2. Whether petitioner is liable for the additions to tax
determined by respondent under section 6651(a)(1). We hold he
is.
3. Whether petitioner is liable for the addition to tax
determined by respondent under section 6651(a)(2). We hold he
is.
4. Whether petitioner is liable for the additions to tax
determined by respondent under section 6654(a). We hold he is.
5. Whether we shall impose a penalty on petitioner under
section 6673 for advancing frivolous and/or groundless claims.
We shall impose a penalty of $10,000.
FINDINGS OF FACT
Some facts have been stipulated. The parties’ stipulation
of facts and the exhibits submitted therewith are incorporated
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herein by this reference. Petitioner resided in Phoenix,
Arizona, when his petition was filed.
Petitioner has not filed a 1994, 1995, or 1996 Federal
income tax return. On February 14, 2001, respondent prepared
substitutes for returns on the basis of information received from
third parties. The information reported that the third parties
had paid to petitioner the following wages during the subject
years:
Payor Year Amount
Rescue Industries, Inc. 1994 $15,287
1995 18,855.85
1996 23,514
La Quinta Inns, Inc. 1995 115
Courier Management Services, Inc. 1995 5,501
1996 187
Respondent determined petitioner’s tax liability as to those
payments by considering his filing status to be “Single”.
Petitioner failed to cooperate with respondent in the audit
of his tax liability for the subject years, and petitioner has
failed to cooperate with respondent during this proceeding. At
trial, petitioner did not answer any substantive questions as to
his tax liability. Relying upon the Fifth Amendment, petitioner
claimed that he was refusing to answer those questions because
his answers might incriminate him.
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OPINION
A. Respondent’s Deficiency Determinations
1. Burden of Proof
Respondent’s deficiency determinations set forth in the
notices of deficiency are presumed correct, and petitioner bears
the burden of proving them wrong. Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933). Section 7491 shifts to
respondent the burden of proof as to these deficiencies when the
taxpayer establishes that he or she met certain requirements. We
conclude from the record that petitioner has not met those
requirements.
2. Validity of Determinations
Petitioner alleged in his petition that he did not receive
the income reported to the Commissioner by the third parties and
that the Commissioner erred by not allowing petitioner to deduct
certain amounts provided for by law.1 We read the record to
support a contrary conclusion. Given the fact that petitioner
has never filed Federal income tax returns for the subject years,
and that he refused to cooperate with respondent in the audit of
his Federal income tax liability for those years, we consider it
proper for respondent to have determined petitioner’s unreported
1
Petitioner also alleged in his petition that his filing
status for the subject years was “Married”. Given that the
record contains no evidence to prove that petitioner was married
during those years, we sustain respondent’s determination that
petitioner’s filing status was “Single”. Rule 142(a).
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income for the subject years from the information received from
the third parties. E.g., Parker v. Commissioner, 117 F.3d 785
(5th Cir. 1997); see also Hardy v. Commissioner, 181 F.3d 1002,
1005 (9th Cir. 1999), affg. T.C. Memo. 1997-97. We sustain
respondent’s determination as to petitioner’s unreported income
given the additional fact that petitioner did not present at
trial even a scintilla of evidence to prove error in that
determination.2
B. Additions to Tax
1. Burden of Proof
Section 7491(c) requires that respondent bear the burden of
production as to the additions to tax. In order to meet this
burden, respondent must present evidence indicating that it is
appropriate to impose an addition to tax. See Higbee v.
Commissioner, 116 T.C. 438, 446 (2001).
2. Validity of Determinations
a. Section 6651(a)(1)
Section 6651(a)(1) imposes an addition to tax for failing to
file timely a required Federal income tax return, unless it is
shown that the failure was due to reasonable cause and not
2
As for his claim to certain deductions, petitioner has
neither identified nor proven that he is entitled to any such
deductions. See Rockwell v. Commissioner, 512 F.2d 882 (9th Cir.
1975), affg. T.C. Memo. 1972-133.
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willful neglect. Petitioner was required to file Federal income
tax returns for each of the subject years. Secs. 6012, 6072.3
Respondent met his burden of production in that respondent
introduced (and the Court admitted) into evidence a Form 4340,
Certificate of Assessments, Payments and Other Specified Matters,
and the testimony of the revenue agent who audited petitioner,
both to the effect that respondent’s records do not indicate that
respondent has ever received a Federal income tax return from
petitioner for any of the subject years. Petitioner, in turn,
has failed to meet his burden of proof. Petitioner has never
asserted or presented any evidence indicating that he filed one
or more of the subject returns, nor has he established that any
of the returns was not filed timely for cause that is reasonable.
We hold that petitioner is liable for the additions to tax under
section 6651(a)(1). United States v. Boyle, 469 U.S. 241, 245
(1985); Cluck v. Commissioner, 105 T.C. 324, 338-339 (1995).
b. Section 6651(a)(2)
Section 6651(a)(2) generally imposes an addition to tax for
a failure to pay timely the amount of tax shown on a Federal
income tax return. Although petitioner did not file his Federal
income tax returns for 1994, 1995, and 1996, the Commissioner
prepared substitutes for returns for those years. A return
3
The minimum amount exception under sec. 6012(a)(1)(A)(i)
does not apply to petitioner for any subject taxable year, as
petitioner’s income exceeded the minimum amount.
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prepared by the Commissioner under section 6020(b) is treated as
a return filed by the taxpayer for returns due after July 30,
1996, for purposes of section 6651(a)(2). Sec. 6651(g); Smith v.
Commissioner, T.C. Memo. 2000-290. We conclude that petitioner
is liable for the addition to tax under section 6651(a)(2). See
sec. 6654(a); Smith v. Commissioner, supra (citing United States
v. Boyle, supra at 245); cf. Heisey v. Commissioner, T.C. Memo.
2002-41 (no liability in absence of substitute of return), affd.
___ Fed. Appx. ___ (9th Cir., Mar. 20, 2003).
c. Section 6654(a)
Section 6654 imposes an addition to tax on an underpayment
of estimated tax. This addition to tax is mandatory unless the
taxpayer establishes that one of the exceptions listed in section
6654(e) applies. Recklitis v. Commissioner, 91 T.C. 874, 913
(1988).
The Form 4340 and the testimony of the revenue agent
establish that petitioner failed to pay the required amounts of
estimated tax for 1995 and 1996. We conclude that respondent has
met his burden of production as to this issue. Given that the
record does not establish that any of the referenced exceptions
apply, we conclude that petitioner has failed to meet his burden
of proof and sustain respondent’s determination as to this issue.
Motley v. Commissioner, T.C. Memo. 2001-257.
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C. Penalty Under Section 6673(a)
Respondent moved the Court at the end of trial to impose a
penalty under section 6673(a)(1). Respondent asserts that
petitioner’s position in this case is frivolous and groundless.
Respondent also asserts that petitioner instituted these
proceedings primarily for the purpose of delay.
Section 6673(a)(1) authorizes the Court to require a
taxpayer to pay to the United States a penalty of up to $25,000
whenever it appears that proceedings have been instituted or
maintained by the taxpayer primarily for delay or that the
taxpayer’s position in such proceeding is frivolous or
groundless. Here, petitioner did not offer any evidence at
trial, nor did he otherwise make any legitimate attempt to prove
respondent’s determinations wrong. Petitioner was warned by
respondent before trial and was warned by the Court during trial
that his position (or lack thereof) was without merit and could
subject him to a penalty of up to $25,000 under section 6673(a).
Petitioner disregarded these warnings and has consumed wastefully
the time, resources, and effort of the Court. We conclude from
the record that petitioner’s positions in this proceeding are
frivolous and without merit. We also conclude from the record
that petitioner has instituted and maintained this proceeding
primarily for delay. Pursuant to section 6673, we require
petitioner to pay to the United States a penalty of $10,000.
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We have considered all arguments and have found those
arguments not discussed herein to be irrelevant and/or without
merit. To reflect the foregoing,
An appropriate order and
decision will be entered for
respondent.