T.C. Memo. 2003-222
UNITED STATES TAX COURT
JAMES C. DUBOIS, SR., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10718-02. Filed July 29, 2003.
James C. DuBois, Sr., pro se.
John W. Stevens and Robert Heitmeyer, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
LARO, Judge: Petitioner petitioned the Court to redetermine
a $2,228 deficiency determined by respondent in his 1999 Federal
income tax. We decide as to that year whether petitioner’s gross
income includes Social Security payments and gambling winnings as
determined by respondent. We hold it includes the gambling
winnings but not the Social Security payments. Section
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references are to the applicable versions of the Internal Revenue
Code. Rule references are to the Tax Court Rules of Practice and
Procedure. Dollar amounts are rounded to the dollar.
FINDINGS OF FACT
Some facts were stipulated. The stipulated facts and the
exhibits submitted therewith are incorporated herein by this
reference. We find the stipulated facts accordingly. Petitioner
resided in Detroit, Michigan, when his petition was filed. On
March 24, 2003, the date of trial, he was 71 years old.
Petitioner filed timely a 1999 Form 1040A, U.S. Individual
Income Tax Return, using the filing status “Married filing
separate return” and affixing thereto a sticker received from the
Internal Revenue Service showing his street address as “WARD ST”.
Petitioner stated on his return that his gross income included
only $11,968 of pension payments which he received during 1999.
Petitioner attached to his return a Form 1099-R, Distributions
From Pensions, Annuities, Retirement or Profit-Sharing Plans,
IRAs, Insurance Contracts, etc., showing the $11,968 as well as
an amount of Federal income tax that had been withheld from his
pension. The Form 1099-R showed petitioner’s street address as
the Ward Street address. Petitioner computed his taxable income
at $4,786 by subtracting from the $11,968 a standard deduction of
$4,450 and an exemption of $2,750.
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During 1999, petitioner admittedly received gambling
winnings of $920, $768, $825, and $621 from Hazel Park Harness
Raceway (Hazel Park). Hazel Park reported to respondent by way
of Forms W-2G, Certain Gambling Winnings, that it had paid
petitioner these amounts as well as other gambling winnings of
$1,405 and $930. The Social Security Administration also
reported to respondent by way of a Form 1099-SSA, Taxable
Benefits, that it had paid $11,022 to petitioner during 1999.
Respondent determined that the reported gambling winnings of
$920, $768, $825, $621, $1,405, and $930 were includable in
petitioner’s 1999 taxable income, as was $9,369 of the $11,022 in
Social Security payments.
A Hazel Park teller prepared a Form 5754, Statement by
Person(s) Receiving Gambling Winnings, for each of petitioner’s
six reported gambling winnings. These forms, which were all
signed by petitioner during 1999, showed “Freeland St” as
petitioner’s street address.1 The Freeland Street address was
the residential address during 1999 of petitioner’s wife and was
the residential address of petitioner from 1965 through sometime
before 1999. The tellers who prepared the Forms 5754 did so by
showing as petitioner’s address the address that appeared on
petitioner’s driver’s license; i.e., the Freeland Street address.
1
The Forms 5754 reported that the $920, $768, $825, $621,
$1,405, and $930 were paid in 1999 on Feb. 17, June 5, June 16,
Aug. 11, July 20, and Sept. 3, respectively.
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Although petitioner sometime before 1999 had moved from the
Freeland Street address to the Ward Street address, petitioner
had never notified the Motor Vehicle Department of his change of
address. The Ward Street address was the home of petitioner’s
son and his family. Petitioner also lived there during 1999,
apart from his wife.
Respondent mailed the subject notice of deficiency to
petitioner at the Ward Street address.
OPINION
1. Social Security
Section 86 taxes Social Security benefits pursuant to a
formula. If a taxpayer’s “modified adjusted gross income” plus
one-half of the Social Security benefits received during the year
exceeds the “base amount”, then a portion of the Social Security
benefits is includable in gross income. Sec. 86(a)--(d).
Section 86(c)(1)(A) provides generally that the base amount is
$25,000 in the case of a married taxpayer such as petitioner who
does not file a joint Federal income tax return for the year.
Section 86(c)(1)(C) provides that such a taxpayer’s base amount
is zero for any year for which the taxpayer does not live apart
from his or her spouse at all times during that year. Living
apart at all times means that the taxpayer and his or her spouse
live in separate residences on each day of the year. McAdams v.
Commissioner, 118 T.C. 373 (2002).
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Respondent determined that petitioner’s base amount was zero
for 1999 because he did not live apart from his spouse on each
day of the year. Petitioner testified that he lived apart from
his wife during all of 1999. We find petitioner’s testimony
credible in light of the record as a whole, including the
undisputed facts that petitioner filed his 1999 tax return using
the status “Married filing separate return”, that petitioner used
the Ward Street address on that return, that respondent
recognized the Ward Street address as petitioner’s address when
he mailed to petitioner the sticker attached to his 1999 return,
that respondent mailed the subject notice of deficiency to
petitioner at the Ward Street address, and that the payor of
petitioner’s pension mailed the Form 1099-R to petitioner at the
Ward Street address. Whereas the Forms 5754 did show
petitioner’s address as the Freeland Street address, i.e., the
address of petitioner’s wife, those forms were prepared by the
Hazel Park tellers and not by petitioner. The tellers simply
inscribed on those forms the address for petitioner shown on his
driver’s license. We find credible petitioner’s testimony as to
why his driver’s license continued to list the Freeland Street
address as his address. We hold for petitioner on this issue.
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2. Gambling Winnings
Respondent determined that petitioner received the disputed
gambling winnings of $1,405 and $930. Petitioner makes no claim
that he did not receive these amounts or that the Forms 5754 do
not bear his name and a corresponding signature. We understand
petitioner to claim that he does not remember signing these forms
and, thus, that the signatures on the Forms 5754 may not actually
be his.
Upon our review of the record, including our comparison of
the signatures on each of the Forms 5754 and our comparison of
the dates of those respective forms, we sustain respondent’s
determination as to this issue. Petitioner’s 1999 tax return as
filed did not include any of his gambling winnings, and he has
not contested that he received the six amounts shown on the Forms
5754. In addition, petitioner admitted at trial that he did not
report other gambling winnings which he had received in 1999,
each of which was less than $600.2 Whereas petitioner in his
petition alleged that he had approximately $2,000 of gambling
losses to offset his gambling winnings, he has failed to prove
this allegation. Petitioner, as the person claiming a deduction,
must prove his entitlement to that deduction; e.g., by
maintaining sufficient records to substantiate the deduction.
2
Petitioner testified that he believed that gambling
winnings less than $600 are not includable in a taxpayer’s gross
income.
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See New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934);
see also sec. 6001; sec. 1.6001-1(a), Income Tax Regs. We hold
that petitioner is not entitled to deduct any of his claimed
gambling losses.
Decision will be entered
under Rule 155.