T.C. Memo. 2005-15
UNITED STATES TAX COURT
LARRY N. MILBY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 3815-04. Filed January 31, 2005.
Larry N. Milby, pro se.
Nancy C. Carver, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
CHIECHI, Judge: Respondent determined deficiencies in, and
additions to, petitioner’s Federal income tax (tax), as follows:
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Additions to Tax
Year Deficiency Sec. 6651(a)(1)1 Sec. 6651(a)(2) Sec. 6654(a)
1998 $2,674 $570.83 $634.25 $121.36
2001 3,514 790.65 298.69 139.05
The issues remaining for decision are:
(1) Should the Court sustain respondent’s deficiency
determination for each of the years at issue? We hold that the
Court should.
(2) Is petitioner liable for each of the years at issue for
an addition to tax under section 6651(a)(1)? We hold that he is.
(3) Is petitioner liable for each of the years at issue for
an addition to tax under section 6654(a)? We hold that he is.
FINDINGS OF FACT
Most of the facts have been deemed admitted pursuant to Rule
90(c). Certain other facts have been stipulated and are so
found.
At the time he filed the petition in this case, petitioner’s
mailing address was in Magnolia, Kentucky.
During 1998, petitioner received a total of $15,406 in wages
from the companies indicated below:
1
All section references are to the Internal Revenue Code in
effect for the years at issue. All Rule references are to the
Tax Court Rules of Practice and Procedure.
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Payor of Wages Amount of Wages
1
Geo P. Reintjes Co., Inc. $11,140
Raytheon Construction, Inc. 3,465
NPS Energy Services, Inc. 801
1
During 1998, Geo P. Reintjes Co., Inc., withheld $137 of
tax from petitioner’s wages. Petitioner did not make any other
tax payments with respect to his taxable year 1998.
During 1998, petitioner also received $9,375 in unemployment
compensation from the Commonwealth of Pennsylvania.
During 2001, petitioner received a total of $30,877 in wages
from the companies indicated below:
Payor of Wages Amount of Wages
Aycock, Inc. $4,993
Day & Zimmerman NPS, Inc. 14,317
Minnotte Contracting Corp. 6,520
Peninsular Engineering 5,047
Petitioner did not make any tax payments with respect to his
taxable year 2001.
Petitioner did not file a tax return for his taxable year
1998 or for his taxable year 2001.
Respondent issued to petitioner a notice of deficiency (1998
notice) for his taxable year 1998. In the 1998 notice, respon-
dent determined that petitioner has unreported wage income of
$15,406 and unemployment compensation of $9,375 for his taxable
year 1998. In the 1998 notice, respondent further determined
that petitioner is liable for that year for additions to tax
under sections 6651(a)(1) and (2) and 6654(a). Respondent also
issued to petitioner a notice of deficiency (2001 notice) for his
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taxable year 2001. In the 2001 notice, respondent determined
that petitioner has unreported wage income of $30,877 for his
taxable year 2001. In the 2001 notice, respondent further
determined that petitioner is liable for that year for additions
to tax under sections 6651(a)(1) and (2) and 6654(a).
OPINION
Respondent acknowledges that section 7491(a) is applicable
in the instant case. Respondent argues, however, that petitioner
has failed to carry his burden of showing that he has satisfied
the applicable requirements of section 7491(a)(2). Consequently,
according to respondent, the burden of proof in this case does
not shift to respondent under section 7491(a). On the record
before us, we agree with respondent. We find that petitioner has
the burden of proving that the respective determinations in the
1998 notice and in the 2001 notice are wrong. Rule 142(a); Welch
v. Helvering, 290 U.S. 111, 115 (1933). That this case was
submitted under Rule 122 does not change that burden or the
effect of a failure of proof. See Rule 122(b); Borchers v.
Commissioner, 95 T.C. 82, 91 (1990), affd. 943 F.2d 22 (8th Cir.
1991).
With respect to respondent’s respective deficiency determi-
nations for the years at issue, the record establishes that
petitioner received wage income and unemployment compensation in
1998 of $15,406 and $9,375, respectively, and wage income in 2001
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of $30,887. On the record before us, we find that petitioner has
failed to carry his burden of establishing that he is entitled to
deductions for the taxable years at issue in excess of those
allowed in the respective notices of deficiency that respondent
issued for those years. On that record, we sustain respondent’s
deficiency determination for each of those years.
With respect to respondent’s respective determinations for
the years at issue of additions to tax under section 6651(a)(1),
petitioner made the following allegations in the petition with
respect to his failure to file a tax return for either of those
years:
There was no return due for both years in ques-
tion, thus no return for the periods here involved was
filed with the Office of the Internal Revenue Service
nor has any person been authorized by the Petitioner to
file such non required returns. Any claims to the
contrary would be fraudulent.
The record establishes, and petitioner concedes in the
petition, that he did not file a tax return for either of the
years at issue. The record establishes that petitioner received
wage income of $15,406 and unemployment compensation of $9,375
for his taxable year 1998 and wage income of $30,887 for his
taxable year 2001. On the record before us, we find that respon-
dent has satisfied respondent’s burden of production with respect
to the addition to tax under section 6651(a)(1) that respondent
determined for each of the years at issue. See sec. 7491(c);
Higbee v. Commissioner, 116 T.C. 438, 446 (2001). On that
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record, we further find that petitioner has failed to carry his
burden of showing that his failure to file a tax return for each
of those years was due to reasonable cause and not due to willful
neglect. On the record before us, we find that petitioner has
failed to establish that he is not liable for each of the years
at issue for an addition to tax under section 6651(a)(1).2
With respect to respondent’s respective determinations for
the years at issue of additions to tax under section 6654(a),
respondent points out that in the petition petitioner did not
assign any error to those determinations. According to respon-
dent, pursuant to Rule 34(b)(4), each issue not addressed in the
petition by a clear and concise assignment of error, including
additions to tax and penalties, is deemed to have been conceded.
We agree with respondent. See Funk v. Commissioner, 123 T.C.
213, 215 (2004); Swain v. Commissioner, 118 T.C. 358, 363 (2002).
In the petition, petitioner failed to assign error to the addi-
tions to tax under section 6654(a) that respondent determined in
the respective notices for the years at issue. On the record
before us, we find that petitioner is deemed to have conceded
such additions to tax. Petitioner failed to place at issue in
2
The calculation of the amount of the addition to tax under
sec. 6651(a)(1) for each of the years at issue for which we have
held petitioner is liable is not subject to sec. 6651(c)(1).
That is because respondent conceded the addition to tax under
sec. 6651(a)(2) that respondent determined for each of those
years.
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the petition the additions to tax under section 6654(a) that
respondent determined. Consequently, respondent is not required
under section 7491(c) to produce evidence that such additions to
tax are appropriate. See Funk v. Commissioner, supra at 216-218;
Swain v. Commissioner, supra at 363-365. On the record before
us, we find that petitioner has failed to carry his burden of
establishing that he is not liable for each of the years at issue
for an addition to tax under section 6654(a).
We now consider sua sponte whether the Court should impose a
penalty on petitioner under section 6673(a)(1). Section
6673(a)(1) authorizes the Court to require a taxpayer to pay a
penalty to the United States in an amount not to exceed $25,000
whenever it appears that a taxpayer instituted or maintained a
proceeding in the Court primarily for delay or that a taxpayer’s
position in such a proceeding is frivolous or groundless.
On several occasions before the parties submitted this case
under Rule 122, the Court (1) informed petitioner that the
petition contained statements, assertions, contentions, and
arguments that the Court found to be frivolous and groundless,
(2) reminded him about section 6673(a)(1), and (3) admonished him
that, in the event he were to continue to advance frivolous
and/or groundless statements, assertions, contentions, and
arguments, the Court would impose a penalty on him under section
6673(a)(1). Nonetheless, in the brief that petitioner filed in
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this case, he persisted in making frivolous and groundless
statements, assertions, contentions, and arguments. On the
instant record, we find that petitioner’s position in this case
is frivolous and groundless and that he instituted and maintained
the instant proceeding primarily for delay. We shall impose on
petitioner pursuant to section 6673(a)(1) a penalty of $1,200.
We have considered all statements, assertions, contentions,
and arguments of petitioner, and, to the extent that they are not
frivolous and/or groundless, we find them to be irrelevant and/or
without merit.
To reflect the foregoing and respondent’s concession,
Decision will be entered under
Rule 155.