T.C. Memo. 2008-233
UNITED STATES TAX COURT
CLIFTON K. WILLIS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
SHERI A. WILLIS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 7140-06, 7222-06. Filed October 21, 2008.
Clifton K. Willis and Sheri A. Willis, pro sese.
Christopher S. Kippes, for respondent.
MEMORANDUM OPINION
GERBER, Judge: These consolidated cases were submitted
fully stipulated pursuant to Rule 122. Unless otherwise
indicated, all section references are to the Internal Revenue
Code, and all Rule references are to the Tax Court Rules of
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Practice and Procedure. Petitioners failed to file returns for
the taxable years 1999 through 2003. After the issuance of
notices of deficiency and the filing of petitions, they filed
income tax returns with respondent. The parties have agreed to
the amounts shown on those returns and the resulting income tax
deficiencies and additions to tax under section 6651(a)(1), along
with related computational matters. Petitioners, however,
contend that respondent is prohibited from assessing the
additions to tax or any interest on the grounds that the
assessment would contravene section 3512 of the Paperwork
Reduction Act of 1995 (PRA), 44 U.S.C. sec. 3512 (2000). In
particular, petitioners rest their contention upon their position
that respondent has failed to comply with 44 U.S.C. sections
3506(c)(1)(B) (2000) and 3512.
Respondent disagrees, contending that he is in compliance
with the PRA and that the additions to tax and interest may be
assessed. Respondent also contends that this Court is without
jurisdiction to consider whether respondent may assess interest,1
irrespective of whether there was compliance with the PRA.
1
Because we decide that there are no prohibitions on
respondent, it is unnecessary to decide whether we have
jurisdiction over the assessment of interest, as contended by
respondent.
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Congress enacted the PRA to limit, as much as practical,
Federal agencies’ information requests that burden the public.
See Dole v. United Steelworkers of Am., 494 U.S. 26, 32-33
(1990). Congress designated the Office of Management and Budget
(OMB) as an overseer of other agencies with respect to the act.
To the extent pertinent to these cases, the PRA was enacted
with the express purposes of: (1) Minimizing the paperwork
burden; (2) ensuring public benefit from information collected,
maintained, used, shared and disseminated by or for the Federal
Government; (3) coordinating and making uniform Federal
information resources management policies and practices and (4)
improving the responsibility and accountability of the OMB and
all other Federal agencies to Congress and to the public for
implementing the information collection review process,
information resources management, and related policies and
guidelines. See 44 U.S.C. sec. 3501 (2000).
In order to accomplish those goals, Congress provided
detailed requirements for governmental organizations to follow.
Petitioners contend that respondent failed to comply with the PRA
in two ways.
First, petitioners argue that the PRA control number on the
Form 1040, U.S. Individual Income Tax Return, was not valid. The
“public protection” provision of 44 U.S.C. section 3512 provides
public protection where there has been failure to comply with the
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PRA, as follows:
§ 3512. Public protection
(a) Notwithstanding any other provision of law, no
person shall be subject to any penalty for failing to
comply with a collection of information that is subject
to this subchapter [44 U.S.C. secs. 3501, et seq.] if–-
(1) the collection of information does not display a
valid control number assigned by the Director in
accordance with this subchapter [44 U.S.C. secs. 3501-
3521]; or
(2) the agency fails to inform the person who is to
respond to the collection of information that such
person is not required to respond to the collection of
information unless it displays a valid control number.
(b) The protection provided by this section may be
raised in the form of a complete defense, bar, or
otherwise at any time during the agency administrative
process or judicial action applicable thereto.
Each Form 1040 contains a control number, and the
accompanying instructions inform taxpayers that they are not
required to respond to the collection of information unless the
form displays a valid control number. Petitioners contend that
respondent’s Form 1040 for the years in question did not contain
a valid control number. Petitioners acknowledge that the Form
1040 does contain a control number (OMB No. 1545-0074), but they
argue that the control number expires at the end of the taxable
year displayed on the form.
Petitioners’ reasoning is somewhat convoluted in that they
argue, for example, that the Form 1040 has a control number for
1999, but that the control number expires on December 31, 1999,
before the form is used in 2000 (typically on or before April 15,
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2000) to report income for 1999. Under petitioners’
interpretation, respondent would face the conundrum of never
being able to have a valid control number, because the form must
be prepared, printed, and distributed prior to filing time, which
begins January 1st each year. Accordingly, we find petitioners’
initial argument to be sophistry and without merit. The Forms
1040 contain a control number that has been provided and
displayed in accord with the PRA.
In a recent opinion, the Court of Appeals for the Tenth
Circuit decided that the Form 1040 is an information collection
request and that it displays a valid control number, even though
it is the same number each year, because the agency periodically
updates the control number requirements. Lewis v. Commissioner,
523 F.3d 1272 (10th Cir. 2008), affg. T.C. Memo. 2007-44. The
taxpayer in Lewis made the same and substantially similar
arguments as petitioners have made in this case. The Court of
Appeals in Lewis v. Commissioner, supra, also held that the PRA
does not require an expiration date to be printed on the Form
1040 and that it need not include the PRA disclosures.
In further support of their argument, petitioners reference
44 U.S.C. section 3506(c)(1)(B), which requires that, in addition
to displaying a control number, each governmental request for
information indicates that it is in accordance with section 44
U.S.C. section 3507 (2000). Petitioners point out that the “3507
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statement” does not appear on the Form 1040 or in the
instructions for that form.
To the extent pertinent to this case, section 3506(c)(1)(B)
of the PRA provides:
(c) With respect to the collection of information
and the control of paperwork, each agency shall–-
(1) establish a process within the office headed
by the Chief Information Officer designated under
subsection (a), that is sufficiently independent of
program responsibility to evaluate fairly whether
proposed collections of information should be approved
under this subchapter [44 U.S.C. secs. 3501-3521], to–-
* * * * * *
(B) ensure that each information collection–-
(i) is inventoried, displays a control
number and, if appropriate, an expiration
date;
(ii) indicates the collection is in
accordance with the clearance requirements of
section 3507 [44 U.S.C. sec. 3507]; and
(iii) informs the person receiving the
collection of information of–-
(I) the reasons the information is
being collected;
(II) the way such information is
to be used;
(III) an estimate, to the extent
practicable, of the burden of the collection;
(IV) whether responses to the
collection of information are voluntary,
required to obtain a benefit, or mandatory; and
(V) the fact that an agency may not
conduct or sponsor, and a person is not
required to respond to, a collection of
information unless it displays a valid
control number; * * *
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Petitioners contend that respondent failed to include the
“3507 statement”, which makes respondent’s control number invalid
and/or precludes respondent from assessing any penalty in accord
with 44 U.S.C. sec. 3512. We are unable to make the same
connection between section 3512 of the PRA and the above-quoted
agency requirement in 44 U.S.C. section 3506(c)(1)(B). The
protection clause of section 3512 of the PRA expressly provides
that a taxpayer will not be subject to a penalty under two
circumstances: (1) Where a valid control number is not displayed
or (2) the agency fails to inform that taxpayers are not required
to respond to the collection of information unless a valid
control number is displayed. There is no question that
respondent met those requirements in the Forms 1040 and
accompanying instructions.
Failure to make the “3507 statement” is not one of the
things that would prohibit assessment of a penalty under
44 U.S.C. section 3512. In addition, it is not clear that
respondent failed to make the “3507 statement”. Section
3506(c)(1)(B)(ii) of 44 U.S.C. provides that each agency must
establish a process to ensure that each collection of information
indicates that it is in accordance with the clearance
requirements of 44 U.S.C. section 3507. By providing the control
number and other information about the collection of information,
respondent has made a statement that he is in compliance with 44
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U.S.C. section 3507 (2000). We do not think it necessary for
respondent to expressly state the section number 3507 in order to
comply with the statute.
Petitioners also referenced other requirements of 44 U.S.C.
section 3506 that they believe were not complied with. If, for
purposes of discussion, we assume arguendo that respondent failed
to comply with some requirement of the PRA (other than the two
described above), that failure would not trigger the public
protection provision of 44 U.S.C. section 3506(c)(1)(B) or
prohibit respondent from assessing a penalty. Section 3506 of 44
U.S.C. does not cross-reference 44 U.S.C. section 3512 and there
is no indication in the statute or legislative history reflecting
otherwise. Failure to comply with 44 U.S.C. section 3506 may
result in some regulatory action by OMB, but it does not result
in the prohibition of the assessment of penalties.
Petitioners contend that a substantial body of case law
supports their position that respondent may not assess the
additions to tax and interest, but none of the cases advanced,
either directly or by analogy, supports their position. First,
they point out that several Federal courts have held that the
Form 1040 is subject to the PRA. There is no doubt Form 1040 is
subject to the PRA, and, indeed, respondent has obtained a
control number and provided required information in the
instructions for the form.
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Petitioners then discuss, without reaching any conclusion,
that various Courts of Appeals have differing views about whether
the requirement to file a return is statutory, regulatory, or
some combination thereof.2 That distinction takes on some
importance because the collection of information by a government
agency pursuant to statute is not subject to the requirements of
the PRA. It is only the collection pursuant to the agency’s
regulations that is subject to the PRA.
In a 1993 opinion, this Court held against taxpayers with
substantially similar circumstances to petitioners here, using
the following rationale:
In general, the PRA requires Federal agencies
requesting information from the public to obtain
approval from the U.S. Office of Management and Budget
(OMB) for all “information collection requests” and
that an OMB control number be displayed on the
information request. 44 U.S.C. sec. 3507(a)(3), (f)
(1988). If information requests fail to display the
required OMB control numbers, “no person shall be
subject to any penalty for failing to maintain or
provide information to any agency”. 44 U.S.C. sec.
3512. Relying on this provision, petitioner argues
that, because the regulations and instructions to which
he would have referred had he filed tax returns did not
contain OMB numbers, he cannot be penalized for failure
to file.
A number of courts have addressed petitioner’s
argument and have held that the PRA does not apply to
2
Petitioners spend a good deal of their brief arguing why
they disagree with the Court statements made by a different
Judge of this Court in an earlier hearing in their case. Because
that Judge did not issue an opinion, we feel no compulsion to
address petitioners’ arguments in this opinion. The presentation
of this case under Rule 122 is a de novo matter which we address
in this opinion.
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either Federal income tax regulations or to the
instructions accompanying Federal tax forms because
such documents are not information collection requests;
rather, they are designed to help taxpayers complete
tax forms and more easily comply with information
collection requests. See Salberg v. United States, 969
F.2d 379 (7th Cir. 1992); United States v. Holden, 963
F.2d 1114 (8th Cir. 1992); United States v. Dawes, 951
F.2d 1189 (10th Cir. 1991); United States v. Crocker,
753 F. Supp. 1209 (D. Del. 1991); see also Dole v.
United Steelworkers, 494 U.S. 26 (1990). Several
Courts of Appeals have also rejected petitioner’s
argument on the grounds that the requirement to file
tax returns is mandated by statute, not by regulation,
and statutes are not subject to the PRA. See Salberg
v. United States, supra; United States v. Neff, 954
F.2d 698 (11th Cir. 1992); United States v. Hicks, 947
F.2d 1356 (9th Cir. 1991); United States v. Kerwin, 945
F.2d 92 (5th Cir. 1991); United States v. Wunder, 919
F.2d 34 (6th Cir. 1990). This Court has found both
analyses persuasive and, in any event, both lead us to
the same result. Our research has not located, and the
parties have not referred us to, any cases in which
this Court has heard and accepted petitioner’s
arguments concerning the PRA. Because the cases in
which this Court has heard and rejected such arguments
are too numerous to cite, we cite the following as
examples: Aldrich v. Commissioner, T.C. Memo. 1993-
290; McCart v. Commissioner, T.C. Memo. 1993-96;
McDonald v. Commissioner, T.C. Memo. 1992-586; Pekrul
v. Commissioner, T.C. Memo. 1992-455, affd. without
published opinion 993 F.2d 884 (9th Cir. 1993); DiCarlo
v. Commissioner, T.C. Memo. 1992-280; Ferguson v.
Commissioner, T.C. Memo. 1992-95, affd. without
published opinion 995 F.2d 223 (5th Cir. 1993), cert.
denied [510] U.S. [918] (1993); Nulsen v. Commissioner,
T.C. Memo. 1991-495.
[Freas v. Commissioner, T.C. Memo. 1993-552.]
There is no need to further analyze the many nuances
expressed in the numerous cases on this topic. Suffice it to
note that none of them support petitioners’ view that the control
number expires and/or that failure to comply with a requirement
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of 44 U.S.C. 3506 triggers the public protection provision
(44 U.S.C. section 3512) and thereby prohibits respondent’s
assessment of penalties.3
Petitioners’ final argument focuses upon section 7491(c) and
whether respondent has met his burden of production with respect
to the addition to tax and/or whether the burden of proof has
been shifted to respondent. Section 7491(c) places the burden of
production on respondent with respect to penalties and additions
to tax. To the extent we understand petitioners’ argument, they
contend that respondent met his burden of production because
petitioners failed to file returns, but that they have provided
persuasive evidence that the Form 1040 is not in compliance with
the PRA so that the burden of proof now rests with respondent.
The context of these cases is one where the parties agree on
the facts and have submitted the cases fully stipulated solely to
decide the legal controversy over whether the PRA applies to
prohibit respondent from assessing the additions to tax and/or
interest. Under such circumstances, the burden of proof is of
little or no consequence, because we decide, based on agreed
3
Because we have decided that respondent is not prohibited
from making an assessment in these cases, there is no need to
consider whether 44 U.S.C. section 3512 would also prohibit the
assessment of interest, as petitioners contend, or respondent’s
argument that we lack jurisdiction to consider matters regarding
post assessment interest.
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facts, a legal question. Accordingly, we find it unnecessary to
address petitioners’ contentions with respect to section 7491(c).
To reflect the foregoing,
Decisions will be entered in
accord with the parties’
stipulation.