T.C. Memo. 2005-26
UNITED STATES TAX COURT
BILLY HYLER AND BONITA M. HYLER, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10839-04. Filed February 16, 2005.
Billy and Bonita M. Hyler, pro sese.
James A. Kutten and Melinda Williams, for respondent.
MEMORANDUM OPINION
DAWSON, Judge: This case was assigned to Special Trial
Judge Robert N. Armen, Jr., pursuant to the provisions of section
7443A(b)(5) and Rules 180, 181, and 183.1 The Court agrees with
1
All section references are to the Internal Revenue Code,
as amended. All Rule references are to the Tax Court Rules of
Practice and Procedure.
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and adopts the opinion of the Special Trial Judge, which is set
forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
ARMEN, Special Trial Judge: This matter is before the Court
on respondent’s Motion For Summary Judgment, filed pursuant to
Rule 121. As explained in detail below, we shall grant
respondent’s motion.
Background
In February 2001, petitioners filed a joint Form 1040, U.S.
Individual Income Tax Return, for the taxable year 2000 on which
they reported wages of $51,804, total tax of $5,121, and tax
withholding of $5,346. Petitioners’ tax return included two
Forms 2439, Notice to Shareholder of Undistributed Long-Term
Capital Gains. The Forms 2439 stated that petitioners were
shareholders of a regulated investment company (RIC) or real
estate investment trust (REIT).2 The Forms 2439 identified the
investment entity as “Black Investment, Tax Dept. of Treasury”
and listed the amount of tax paid by the entity on petitioners’
2
Sec. 852(b)(1) and (3)(A) provides that tax will be
imposed on the taxable income and capital gains of a regulated
investment company (RIC). Sec. 852(b)(3)(D)(i) provides that a
RIC’s shareholder “shall include, in computing his long-term
capital gains in his return * * * such amount as the * * * [RIC]
shall designate”. Sec. 852(b)(3)(D)(ii) provides that such
shareholder “shall be deemed to have paid * * * the tax imposed”
under sec. 852(b)(3)(A), and the shareholder shall be allowed a
“credit or refund, as the case may be, for the tax so deemed to
have been paid by him.”
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behalf as $92,636. Petitioners entered $92,636 on Form 1040,
line 64 (“Other payments”) and claimed a refund on a total
overpayment of $92,861.
Petitioners each signed the tax return. The tax return was
not signed by a tax return preparer. Respondent processed the
tax return and issued to petitioners a refund check in the amount
of $93,071.
On March 24, 2004, respondent issued a notice of deficiency
to petitioners for the taxable year 2000. In the notice,
respondent determined a deficiency in petitioners’ income tax in
the amount of $92,636, asserting:
The claim you filed on Form 2439 includes a credit that
you assert is owed to you as a reparation or tax rebate
based on the impact of slavery. Since there is no law
allowing this type of payment, we cannot honor this
type of credit. Accordingly, your income tax liability
has been increased based on the credit recapture. Due
to the allowance of the credit, you will need to return
the portion of your refund based on the disallowed
amount.
Petitioners filed a timely petition challenging the notice
of deficiency.3 In the petition, petitioners contend that
respondent should attempt to collect the amount in dispute from
their tax return preparer “if he was behaving fraudulently” in
this matter. Petitioners also allege that the period of
3
At the time the petition was filed, petitioners resided
in Columbia, Missouri.
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limitations on assessments had expired before respondent issued
the notice of deficiency.
Respondent filed an answer to the petition. Respondent’s
answer included affirmative allegations in response to
petitioners’ argument that the period of limitations had expired
before respondent issued the notice of deficiency.
As indicated, respondent filed a Motion for Summary
Judgment. Relying on Wilkins v. Commissioner, 120 T.C. 109
(2003), and other cases, respondent contends that the Internal
Revenue Code does not allow a credit (or any other deduction or
allowance) for slavery reparations. In addition, citing section
6501(a) and (b)(1), respondent contends that petitioners’ tax
return for 2000 was deemed filed on April 15, 2001, and,
therefore, that the March 24, 2004 notice of deficiency was
issued to petitioners within the applicable 3-year period of
limitations. In the absence of any dispute as to a material
fact, respondent maintains that he is entitled to judgment as a
matter of law.
By Order dated November 24, 2004, the Court directed
petitioners to file a written response to respondent’s motion.
Petitioners did not respond to the Court’s Order.
This matter was called for hearing at the Court’s motions
session in Washington, D.C. Counsel for respondent appeared at
the hearing and offered argument in support of respondent’s
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motion. There was no appearance by or on behalf of petitioners
at the hearing, nor did petitioners file with the Court a written
statement pursuant to Rule 50(c).
Discussion
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. See Florida Peach Corp.
v. Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may
be granted with respect to all or any part of the legal issues in
controversy “if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that a decision may be
rendered as a matter of law.” Rule 121(b); Sundstrand Corp. v.
Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th
Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988);
Naftel v. Commissioner, 85 T.C. 527, 529 (1985). The moving
party bears the burden of proving that there is no genuine issue
of material fact, and factual inferences will be read in a manner
most favorable to the party opposing summary judgment. See
Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v.
Commissioner, 79 T.C. 340, 344 (1982).
The record reflects that there is no dispute as to any
material fact and that summary judgment may be rendered in
respondent’s favor as a matter of law.
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The facts in this case are indistinguishable from the facts
presented in Wilkins v. Commissioner, supra. Like petitioners,
the taxpayers in Wilkins v. Commissioner, supra, claimed tax
credits on Form 2439 for slavery reparations. We held that the
Internal Revenue Code “does not provide a tax deduction, credit,
or other allowance for slavery reparations”, and granted the
Commissioner’s motion for summary judgment. Id. at 112-113.
Petitioners’ assertion that respondent should pursue their
tax return preparer is misplaced. As previously observed,
petitioners' tax return was not signed by a tax return preparer.
In any event, although Congress has provided the Commissioner
with remedies that may be enforced against dishonest tax return
preparers, see secs. 6694, 6695, 7407, there is no provision in
law that would relieve petitioners of their personal liability
for the tax deficiency that respondent determined in this case.4
Finally, petitioners’ argument that the period of
limitations bars assessment is simply incorrect. Section 6501(a)
provides that Federal income taxes generally must be assessed
within 3 years after a tax return is filed. Section 6501(b)(1)
provides that a tax return that is filed early, i.e., before the
last day prescribed by law for filing such return, shall be
4
Of course, a taxpayer may assert that he or she
reasonably relied on a tax return preparer as a defense to
certain additions to tax and/or penalties. However, respondent
did not determine that petitioners are liable for any addition to
tax or penalty in this case.
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considered filed on the last day. Thus, although petitioners
filed their tax return for 2000 in February 2001, the return is
deemed to have been filed on Monday, April 16, 2001. See sec.
7503. It follows that the notice of deficiency dated March 24,
2004, upon which this case is based, was issued within the
applicable 3-year period of limitations.
Consistent with the preceding discussion, we shall grant
respondent’s Motion For Summary Judgment.
To reflect the foregoing,
An Order and Decision will
be entered granting respondent’s
Motion For Summary Judgment.