T.C. Memo. 2007-172
UNITED STATES TAX COURT
RICHARD L. CLARK, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 11384-06. Filed July 2, 2007.
Richard L. Clark, pro se.
Brenda M. Fitzgerald, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
COHEN, Judge: Respondent determined deficiencies and
additions to tax as follows:
Additions to Tax, I.R.C.
Sec. Sec. Sec.
Year Deficiency 6651(a)(1) 6651(a)(2) 6654(a)
2001 $8,584 $1,931.40 $1,673.88 $339.67
2002 5,613 1,262.92 757.75 187.54
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In the answer, respondent conceded that the addition to tax under
section 6651(a)(2) is not applicable to petitioner’s 2001 and
2002 tax years. As a result, respondent alleged that “Petitioner
is liable for the additions to tax attributable to I.R.C. section
6651(a)(1) for the years 2001 and 2002 in the amounts of
$1,403.25 and $2,146.00, respectively” (thus misstating the
amounts for each year). Unless otherwise indicated, all section
references are to the Internal Revenue Code in effect for the
years in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
The issues for decision are whether respondent’s
determinations should be sustained on the existing record and
whether petitioner is entitled to any deductions or exemptions
not allowed in the statutory notices.
FINDINGS OF FACT
Petitioner resided in Georgia at the time that he filed his
petition. During 2000 and 2001, he performed services as a truck
driver for Jimmy Harris Trucking, Inc. In 2002, he also
performed services for Vandy Trucking, Inc., and Peters Hauling,
Inc. He received compensation for his services. Petitioner
maintained a savings account at Farmers and Merchants Bank during
2002 and received interest on that account. During 2002,
petitioner received income from Prime America Shareholder
Services. During 2002, petitioner and his wife were divorced.
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Petitioner failed to file Federal income tax returns for
2001 and 2002. Petitioner did not submit to respondent’s agents
or counsel, to the Court during trial, or during an opportunity
provided after trial, the amounts of or evidence of deductions
and exemptions to which he claimed entitlement. Records may have
been lost during a fire at petitioner’s father’s residence in
2005, but petitioner made no attempt to reconstruct records or
obtain corroboration of his claims.
OPINION
The above findings of fact are very sketchy because the
parties in this case failed to stipulate or otherwise to provide
a satisfactory record. Petitioner was poorly advised, apparently
by a person not admitted to practice before the Tax Court.
Petitioner did not cooperate with respondent in preparing the
case for trial, which led to excessive reactions by respondent,
including excessive interrogatories and motions. Respondent’s
interrogatories contained eight pages of “definitions” and
“instructions” and were, in effect, directions to require
petitioner to lay out his case in writing rather than simple
questions such as those anticipated by Rule 71. See Pleier v.
Commissioner, 92 T.C. 499 (1989). Such interrogatories are
particularly inappropriate against a pro se petitioner and were
unnecessary in this case because petitioner’s compliance with
other Rules and the standing pretrial order would have supplied
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the information that respondent needed. Moreover, the
interrogatories apparently motivated petitioner to give evasive
answers to respondent’s poorly phrased requests for admissions
and to refuse to admit to the items of income identified in the
statutory notice and in the requests for admissions. Thus,
respondent’s motions to compel answers to interrogatories and to
review the sufficiency of the responses to the requests for
admissions were denied.
In an order served on the parties approximately 5 weeks
before trial, they were warned:
Nonetheless, the parties are required to stipulate
pursuant to Rule 91 and to do so with respect to the
items of income and deductions involved in this case.
Petitioner is advised that respondent’s determination
of income, once supported by third-party information,
will be sustained unless he raises a reasonable dispute
with respect to those items of income. He has not done
so on the record in this case to date. Petitioner
bears the burden of proof with respect to his
exemptions and deductions, and he should produce
documents relating to those claims in accordance with
the Court’s Order dated March 1, 2007. With respect to
petitioner’s claims that he need not answer questions
about failing to file returns, relying on his privilege
against self-incrimination, petitioner is advised that
the privilege is a shield, not a sword, and his refusal
to answer questions and provide information will be
detrimental to him in this case. Respondent, through
official transcripts and through means of securing
third-party evidence, presumably will establish the
facts necessary to respondent’s case, and petitioner
must establish the facts necessary to his positions.
* * *
Petitioner failed to comply with the Court’s order to produce
documents. That failure became moot, however, because petitioner
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failed to present any evidence of his deductions at the time of
trial or during the month after trial that he was permitted to
provide further information, after having received suggestions as
to how his required records could be reconstructed. Although he
relies on Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir.
1930), he provided no basis for making an estimate of deductions
to which he might be entitled, which precludes our estimating
such deductions. See, e.g., Mendes v. Commissioner, 121 T.C.
308, 316 (2003); Vanicek v. Commissioner, 85 T.C. 731, 742-743
(1985). We have no reason to believe that petitioner’s allowable
deductions exceeded the standard deductions allowed in the
statutory notices of deficiency.
Petitioner testified that he was divorced in 2002. There is
no information in the record as to whether his former spouse
filed tax returns for the years in issue. There is no evidence
concerning any eligible dependents that he or his former spouse
might have had. There is nothing in the record to contradict the
“single” filing status used in the statutory notice for 2002. If
petitioner was married in 2001, which is unclear from the record,
he was not disadvantaged by the use of “single” status rather
than “married filing separately”.
On the other hand, respondent neglected to secure third-
party records that corroborate the income set forth in the
statutory notices. So far as the record reflects, despite
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petitioner’s repeated claims of uncertainty as to the amounts
received from the payors listed in the statutory notices,
respondent neither secured nor offered copies of the third-party
records to petitioner during the stipulation process. Although
certain witnesses were identified in respondent’s pretrial
memorandum, none were called. Respondent did not even bother to
secure business records under rules 902(11) and 803(6), Federal
Rules of Evidence. See, e.g., Richardson v. Commissioner, T.C.
Memo. 2005-143.
Because petitioner failed to cooperate, to maintain required
records, or to present credible evidence, he is not entitled to
have the burden of proof shifted under section 7491(a). Section
6201(d), however, also imposes on respondent the burden of
producing reasonable and probative information concerning a
deficiency based on third-party information returns where:
the taxpayer asserts a reasonable dispute with respect
to any item of income reported on an information return
* * * and the taxpayer has fully cooperated with the
Secretary (including providing, within a reasonable
period of time, access to and inspection of all
witnesses, information, and documents within the
control of the taxpayer as reasonably requested by the
Secretary).
See Del Monico v. Commissioner, T.C. Memo. 2004-92. In this
case, petitioner failed to provide information in response to
unreasonable requests and belatedly claimed that documents were
not within his control because they were destroyed in a fire.
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During his testimony, petitioner admitted that he received
income from three trucking companies, from Farmers and Merchants
Bank, and from Prime America Shareholder Services. He was not
asked about other income listed in the statutory notices as paid
to petitioner and to Felicia Clark in each year from Rural
Housing Service for mortgage interest or paid to Richard L.
Clark/Lizzie M. Clark during 2001 by the Social Security
Administration. We conclude that petitioner’s testimony is
sufficiently probative to sustain the portions of the
deficiencies based on the income from the sources that he
admitted, but not sufficient with respect to items for which
there is no explanation in the record.
Respondent also has the burden of production under section
7491(c) with respect to the additions to tax. Respondent
introduced a certified transcript establishing petitioner’s
failure to file returns for 2001 or 2002. Thus, respondent’s
burden has been met with respect to the additions to tax under
section 6651(a)(1), subject to correct mathematical
determination, but respondent failed to meet that burden with
respect to section 6654. See Wheeler v. Commissioner, 127 T.C.
200, 207-212 (2006).
To reflect the foregoing,
Decision will be entered
under Rule 155.