T.C. Summary Opinion 2009-179
UNITED STATES TAX COURT
SALLY KIRSHENBAUM, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13022-08S. Filed December 1, 2009.
Sally Kirshenbaum, pro se.
Louise R. Forbes, for respondent.
ARMEN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect when the petition was filed.1 Pursuant to section
7463(b), the decision to be entered is not reviewable by any
1
Unless otherwise indicated, all subsequent 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.
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other court, and this opinion shall not be treated as precedent
for any other case.
Respondent determined a deficiency in petitioner’s Federal
income tax for 2002 of $13,124, as well as an addition to tax
under section 6651(a)(1) of $2,229.97, an addition to tax under
section 6651(a)(2) of $2,477.75, and an addition to tax under
section 6654 of $319.24.
Respondent conceded the addition to tax under section 6654;
thus, the issues for decision are:
(1) Whether petitioner may file a joint tax return with her
husband;
(2) whether petitioner is entitled to two dependency
exemption deductions;
(3) whether petitioner is liable for the addition to tax for
failure to timely file under section 6651(a)(1); and
(4) whether petitioner is liable for the addition to tax for
failure to pay under section 6651(a)(2).
Background
All of the facts have been stipulated, and they are so
found. We incorporate by reference the parties’ stipulation of
facts and accompanying exhibits.
Petitioner resided in the State of Rhode Island when the
petition was filed. At all relevant times, petitioner has been
married and has resided with her spouse.
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For 2002, the taxable year in issue, petitioner did not file
a request for an extension of time for filing a return, see sec.
6081(a), nor did petitioner timely file a return, see sec.
6072(a).
For 2002 petitioner’s husband filed a Form 1040, U.S.
Individual Income Tax Return, with the filing status of single on
August 9, 2004. Petitioner’s husband claimed the standard
deduction and a personal exemption on that return. Petitioner
had no knowledge of that return.
On November 19, 2007, respondent prepared a substitute for
return under section 6020(b). Thereafter, on February 25, 2008,
respondent sent petitioner a notice of deficiency. Respondent’s
deficiency determination was principally attributable to
petitioner’s failure to report wages and interest of $70,991.
Respondent allowed petitioner a personal exemption for herself
and the standard deduction and accorded her the filing status of
single.
After receiving the notice of deficiency for 2002,
petitioner, on April 7, 2008, submitted to respondent a Form 1040
claiming the filing status of married filing jointly. Petitioner
claimed itemized deductions and dependency exemption deductions
for her daughter and father on this return. Respondent did not
accept this return because it was a joint return.
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On May 28, 2008, petitioner timely filed a petition with the
Court for redetermination of the deficiency. In the petition,
petitioner stated that her husband handled the family finances
and had fallen ill in 2002. Petitioner stated she was willing to
pay the tax due, but prayed for relief from the additions to tax.
Discussion
A. Burden of Proof
We begin by noting that the submission of a case fully
stipulated does not alter the burden of proof, the requirements
otherwise applicable with respect to adducing proof, or the
effect of failure of proof. Rule 122(b).
As a general rule, the Commissioner’s determinations are
presumed correct, and the taxpayer bears the burden of proving
that those determinations are erroneous. Rule 142(a); INDOPCO,
Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering,
290 U.S. 111, 115 (1933). Under section 7491(a)(1), the burden
of proof may shift from the taxpayer to the Commissioner if the
taxpayer produces credible evidence with respect to any factual
issue relevant to ascertaining the taxpayer’s liability.
Petitioner has not alleged that section 7491 applies, nor did she
introduce the requisite evidence to invoke that section;
therefore, the burden of proof remains on petitioner.
Section 7491(c) provides that the Commissioner bears the
burden of production with respect to an addition to tax. To meet
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this burden, the Commissioner must introduce evidence indicating
that it is appropriate to impose the relevant addition to tax.
Higbee v. Commissioner, 116 T.C. 438, 446 (2001). Once the
Commissioner meets this burden, the taxpayer bears the burden to
produce evidence regarding reasonable cause. Id. at 446-447.
Respondent has met his burden. E.g., Cabirac v. Commissioner,
120 T.C. 163, 170-173 (2003).
Further, deductions and credits are a matter of legislative
grace, and the taxpayer bears the burden of proving that he or
she is entitled to any deduction or credit claimed. Rule 142(a);
Deputy v. du Pont, 308 U.S. 488, 493 (1940); New Colonial Ice Co.
v. Helvering, 292 U.S. 435, 440 (1934).
B. Joint Tax Return
In general, section 6013(a) entitles married taxpayers to
make a joint income tax return. Section 6013(b)(1) further
provides as a general rule that even where a taxpayer has filed a
separate return for a taxable year and the time prescribed for
filing has expired, the taxpayer may nevertheless make a joint
return with his or her spouse for such taxable year.
However, the election under section 6013(b)(1) may not be
made after the expiration of 3 years from the last date
prescribed by law for filing the return for such taxable year
(determined without regard to any extension of time granted to
either spouse). Sec. 6013(b)(2)(A). Section 6072(a) provides
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that individual income tax returns for calendar year taxpayers
must be filed on or before April 15 following the close of the
calendar year. Thus, a 2002 tax return is timely filed on or
before April 15, 2003. To fall within section 6013(b)(2)(A),
petitioner had to file a joint return on or before April 15,
2006. Petitioner did not submit a joint tax return to respondent
until April 7, 2008, nearly 2 years after the time prescribed by
section 6013(b)(2)(A).
In addition, no election under section 6013(a)(1) may be
made “after there has been mailed to either spouse, with respect
to such taxable year, a notice of deficiency under section 6212,
if the spouse, as to such notice, files a petition with the Tax
Court within the time prescribed by section 6213”. Sec.
6013(b)(2)(B). The notice of deficiency was mailed to petitioner
on February 25, 2008, before the submission of the April 7, 2008
joint return, and a petition with the Tax Court was timely filed
on May 28, 2008.
Therefore, petitioner is precluded from filing a joint
return for 2002.2
C. Dependency Exemption Deductions
Petitioner claims she is entitled to two dependency
exemption deductions, one each for her daughter and father.
2
Although he could have, respondent chose not to seek an
increased deficiency by applying the tax rates applicable to
married individuals filing separately.
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As pertinent here, a taxpayer is entitled to a dependency
exemption deduction for each dependent (as defined in section
152) whose gross income for the taxable year is less than the
exemption amount. Sec. 151(c)(1)(A). The exemption amount for
2002 was $3,000. Sec. 151(d)(1), (4); Rev. Proc. 2001-59, sec.
3.11, 2001-2 C.B. 623, 626. Section 152(a) provides that the
term “dependent” means an individual over half of whose support
for the year was received from the taxpayer. “Dependent” may
include a taxpayer’s child or parent. Sec. 152(a)(1), (4).
In order to prove that a taxpayer provided more than half
the support of her dependents, she must establish the entire
amount expended for their support from all sources. Archer v.
Commissioner, 73 T.C. 963, 967 (1980); Blanco v. Commissioner, 56
T.C. 512, 514-515 (1971). In addition, the taxpayer must
demonstrate that the dependents’ gross income did not exceed the
exemption amount. Sec. 151(c)(1)(A), (d)(1), (4).
The record is devoid of any evidence regarding the total
amount spent for the support of petitioner’s father and daughter
(by petitioner and from other sources) or the gross income of
petitioner’s father and daughter for 2002. Although we do not
doubt that petitioner may have contributed to the support of her
father and daughter, petitioner failed to show the extent of such
support and the gross income, if any, of her father and daughter.
On the basis of the record, we decline to accept petitioner’s
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unsupported assertion that she is entitled to the dependency
exemption deductions claimed. See Tokarski v. Commissioner, 87
T.C. 74, 77 (1986).
Accordingly, petitioner is not entitled to a dependency
exemption deduction for her father or daughter for 2002.
D. Section 6651(a)(1) Addition to Tax
Section 6651(a)(1) imposes an addition to tax for failure to
file a return by its due date. The addition equals 5 percent for
each month or fraction thereof that the return is late, not to
exceed 25 percent. Sec. 6651(a)(1). Under section 6651(g)(1), a
return prepared by the Secretary under section 6020(b) is
disregarded for purposes of the section 6651(a)(1) addition to
tax.
In the absence of an extension, the last date for petitioner
to have filed her Federal income tax return for taxable year 2002
was Tuesday, April 15, 2003. Sec. 6072(a). Petitioner’s 2002
Form 1040 was not submitted, however, until April 7, 2008.
“A failure to file a tax return on the date prescribed leads
to a mandatory penalty unless the taxpayer shows that such
failure was due to reasonable cause and not due to willful
neglect.” McMahan v. Commissioner, 114 F.3d 366, 368 (2d Cir.
1997), affg. T.C. Memo. 1995-547. A showing of reasonable cause
requires a taxpayer to show that she exercised “ordinary business
care and prudence” but was nevertheless unable to file the return
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within the prescribed time. United States v. Boyle, 469 U.S.
241, 246 (1985); sec. 301.6651-1(c)(1), Proced. & Admin. Regs.
A taxpayer may have reasonable cause for failure to timely
file a return where the taxpayer or a member of the taxpayer’s
family experiences an illness or incapacity that prevents the
taxpayer from filing his or her return. See, e.g., United States
v. Sanford, 979 F.2d 1511 (11th Cir. 1992) (holding that
reasonable cause may be found if a taxpayer convincingly
demonstrates that a disability beyond his control rendered him
unable to exercise ordinary business care). The type of
disability required is “one that because of severity or timing
makes it virtually impossible for the taxpayer to comply--things
like emergency hospitalization or other incapacity occurring
around tax time.” Carlson v. United States, 126 F.3d 915, 923
(7th Cir. 1997).
Although we recognize that petitioner’s husband may have
been ill during 2002, petitioner did not explain how this illness
prevented her from exercising ordinary business care and
prudence.
On the basis of the record before us, we therefore conclude
that petitioner did not demonstrate that her failure to timely
file a tax return was due to reasonable cause and not willful
neglect. See sec. 301.6651-1(c), Proced. & Admin. Regs.
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Thus, petitioner is liable for the addition to tax under
section 6651(a)(1).
E. Section 6651(a)(2) Addition to Tax
Section 6651(a)(2) imposes an addition to tax for failure to
pay the amount shown as tax on the return on or before the date
prescribed for payment of that tax, unless the failure was due to
reasonable cause and not willful neglect. Sec. 301.6651-1(c)(1),
Proced. & Admin. Regs. Under section 6651(g)(2), a return
prepared by the Secretary under section 6020(b) is treated as
“the return filed by the taxpayer for purposes of determining the
amount of the addition” under section 6651(a)(2). A taxpayer may
demonstrate cause for late payment by showing that she exercised
ordinary business care and prudence in providing for payment of
her tax liability and was nevertheless either unable to pay the
tax or would suffer an undue hardship if she paid on the due
date. Sec. 301.6651-1(c)(1), Proced. & Admin. Regs.
Petitioner did not, however, argue any set of facts or
circumstances that would lead the Court to find that she
exercised ordinary business care and prudence in providing for
timely payment of her tax liability or that she would have
suffered undue hardship if she had paid the tax in full on its
due date, April 15, 2003. See secs. 6072(a), 6151(a); sec.
301.6651-1(c), Proced. & Admin. Regs.
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Consequently, petitioner is liable for an addition to tax
under section 6651(a)(2).
To reflect the foregoing,
Decision will be entered
for respondent as to the
deficiency and the additions
to tax under section
6651(a)(1) and (2), and for
petitioner as to the addition
to tax under section 6654.