T.C. Memo. 2005-27
UNITED STATES TAX COURT
JAMES CARLYLE MALONEY, JR., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10533-03. Filed February 16, 2005.
James Carlyle Maloney, Jr., pro se.
Donza M. Poole, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
KROUPA, Judge: Respondent determined a deficiency of
$16,061 for 2000, an addition to tax under section 6651(a)(1)1 of
$1,371 for failure to timely file a return, an addition to tax
1
All section references are to the Internal Revenue Code in
effect for the year in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
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under section 6651(a)(2) of $579 for failure to pay timely, and
an addition to tax of $268 under section 6654(a) for failure to
pay estimated taxes.
After concessions,2 the issues to be decided are whether
petitioner had income of $72,606; whether he is liable for the
addition to tax under section 6651(a)(1) for failure to file a
timely tax return; and whether he is liable for the addition to
tax under section 6654(a) for failure to make estimated tax
payments. We decide all the issues in the affirmative.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the accompanying exhibits are
incorporated by this reference. Petitioner resided in North
Canton, Ohio, when he filed the petition.
Respondent has no record that petitioner filed a Federal
income tax return for 2000. Relying on a Form W-2, Wage and Tax
Statement, and Form 1099-DIV, Dividends and Distributions,
respondent determined that petitioner was paid $71,520 in wages
by Goodyear Tire & Rubber Co. and $1,086 in ordinary dividends by
TRW, Inc., in 2000. Respondent then determined against
petitioner a deficiency and additions to tax for failure to file
2
Respondent conceded the sec. 6651(a)(2) addition to tax and
sought a correlative one-half-percent increase in the sec.
6651(a)(1) addition to tax. Respondent submitted no computation
to the Court reflecting the proposed increase.
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timely, pay timely,3 and make estimated tax payments. Respondent
then issued a notice of deficiency to petitioner for 2000, and
petitioner timely filed a petition contesting all of respondent’s
determinations in the deficiency notice.
OPINION
The Commissioner’s determination in the notice of deficiency
is presumed correct, and the taxpayer bears the burden of proving
otherwise. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
(1933). The burden of proof may, under certain circumstances,
shift to the Commissioner with respect to a factual issue
affecting the taxpayer’s liability for tax. Sec. 7491(a). The
burden of proof does not shift in this case, however, because
petitioner failed to introduce credible evidence, maintain
adequate records, satisfy substantiation requirements, or
cooperate with respondent. Id.
After carefully considering the facts, we conclude that
petitioner has failed to prove that respondent’s deficiency
determination in the notice was incorrect. The definition of
gross income under section 61(a) broadly encompasses any
accession to a taxpayer’s wealth. United States v. Burke, 504
U.S. 229 (1992); Commissioner v. Glenshaw Glass Co., 348 U.S.
426, 431 (1955). Compensation for services and dividends are
specifically included in that definition. Sec. 61(a)(1), (7).
3
See supra note 2.
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We therefore conclude that the unreported amounts are includable
in petitioner’s gross income and are taxable. Accordingly, we
sustain respondent’s deficiency determination.
Additions to Tax
We next address additions to tax. Respondent determined
petitioner was liable for an addition to tax of $1,371 under
section 6651(a)(1) for failure to file timely. Section
6651(a)(1) provides for an addition to tax for failure to file a
tax return on or before the specified filing date.
Respondent bears the burden of production with respect to
any additions to tax. See sec. 7491(c). In order to meet this
burden, respondent must produce sufficient evidence establishing
that it is appropriate to impose the additions to tax. See
Higbee v. Commissioner, 116 T.C. 438, 446-447 (2001). Once
respondent has done so, the burden of proof is upon petitioner to
persuade the Court that respondent’s determination is incorrect.
See id.
Having produced a certified transcript with no record of
petitioner’s 2000 tax return, respondent has met his burden of
producing evidence that petitioner failed to file a return for
2000. See Mehner v. Commissioner, T.C. Memo. 2003-203
(Commissioner’s initial burden of production is satisfied where
it is established that Commissioner has no record of a return).
The burden therefore shifts to petitioner to prove that he either
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filed the return timely or had reasonable cause and lacked
willful neglect in not filing his return timely. See United
States v. Boyle, 469 U.S. 241, 245 (1985); Jackson v.
Commissioner, 864 F.2d 1521, 1527 (10th Cir. 1989), affg. 86 T.C.
492 (1986); Charlotte’s Office Boutique, Inc. v. Commissioner,
121 T.C. 89, 110 (2003); Higbee v. Commissioner, supra; Crocker
v. Commissioner, 92 T.C. 899, 912 (1989); Estate of Newton v.
Commissioner, T.C. Memo. 1990-208; sec. 301.6651-1(a)(2), Proced.
& Admin. Regs.
Petitioner claims to have requested an automatic extension
to file his return for 2000 and to have filed the return on April
30, 2001. Unable to find a copy of his return, however,
petitioner produced a computer-generated copy of what he claims
is his return for 2000 that he had saved on his home computer.
Petitioner printed the return approximately 1 week before trial
and backdated it April 30, 2001. Petitioner cannot otherwise
corroborate that he in fact filed his return for 2000.
In the Sixth Circuit, in which this case is appealable, no
presumption is raised that a properly mailed return has been
received by the Internal Revenue Service unless the return was
sent by registered or certified mail. Carroll v. Commissioner,
71 F.3d 1228, 1229-1230 (6th Cir. 1995) (“a taxpayer that sends a
document to the IRS by regular mail, as opposed to registered or
certified mail, does so at his peril”), affg. T.C. Memo. 1994-
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229; Surowka v. United States, 909 F.2d 148 (6th Cir. 1990);
Miller v. United States, 784 F.2d 728, 730 (6th Cir. 1986); Brown
v. Commissioner, T.C. Memo. 1997-567, affd. without published
opinion 181 F.3d 99 (6th Cir. 1999); Bruder v. Commissioner, T.C.
Memo. 1989-328. We are not required to accept, nor shall we
accept, petitioner’s testimony that he timely mailed his return.
See Geiger v. Commissioner, 440 F.2d 688, 689 (9th Cir. 1971),
affg. per curiam T.C. Memo. 1969-159; Tokarski v. Commissioner,
87 T.C. 74, 77 (1986). Nor do we attach any weight to the
dubious copy of petitioner’s return for 2000 that he produced at
trial.
Moreover, petitioner makes no argument that he had
reasonable cause and lacked willful neglect in not filing the
return. In fact, he claims he did file the return. We therefore
find that petitioner has failed to demonstrate reasonable cause
and lack of willful neglect. Accordingly, we sustain
respondent’s determination that petitioner is liable for the
addition to tax under section 6651(a)(1) for failure to file
timely. Because respondent did not submit a computation to the
Court reflecting the proposed increase, we sustain respondent
only as to the addition to tax under section 6651(a)(1)
determined in the notice of deficiency.
Respondent also determined petitioner was liable for an
addition to tax of $268 under section 6654(a) for failure to make
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estimated tax payments. Section 6654(a) provides for an addition
to tax where a taxpayer underpays estimated tax. Respondent’s
certified transcript of account establishes that petitioner made
no estimated tax payments during 2000, and none of the statutory
exceptions under section 6654(e) applies. We therefore find that
petitioner is liable for the addition to tax under section
6654(a) for underpaying estimated tax in 2000.
To reflect the foregoing regarding the deficiency, additions
to tax, and respondent’s concession,
Decision will be entered
for respondent.