T.C. Memo. 2010-99
UNITED STATES TAX COURT
PETER STORAASLI, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17707-07. Filed May 6, 2010.
Peter Storaasli, pro se.
Robert V. Boeshaar, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
FOLEY, Judge: After concessions, the issues for decision
are whether petitioner is liable for income tax deficiencies and
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for additions to tax pursuant to sections 6651(f) and (a)(2)1 and
6654(a) relating to 2000, 2001, 2002, 2003, and 2004.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. At
all relevant times, petitioner worked as a real estate agent and
resided with his wife in the State of Washington. In 2000, 2001,
2002, 2003, and 2004 (years in issue), petitioner provided
services to Windermere Real Estate/SBA, Inc. (Windermere), and
was paid $82,669, $108,952, $120,311, $219,575, and $130,907,
respectively, for these services. At petitioner’s request
Windermere paid petitioner for his services by issuing checks
payable to trust entities petitioner owned. These checks were
deposited into a bank account over which petitioner had signature
authority and were subsequently transferred to petitioner’s
personal bank account. Neither petitioner nor the trusts filed
returns relating to these payments.
Petitioner, in 2002, 2003, and 2004, received dividend and
capital gain income, and in 2004 he received cancellation of
indebtedness income. In addition, in 2000, 2001, and 2002
petitioner’s wife received self-employment income, and in 2003
1
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.
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and 2004 she received wages.2 Petitioner did not file Federal
income tax returns and did not pay estimated taxes relating to
the years in issue.
Respondent assigned Revenue Agent Sue Ann Besson to examine
petitioner’s case. During the course of Ms. Besson’s
examination, petitioner was uncooperative and evasive. Ms.
Besson made numerous attempts to meet with petitioner and to
personally serve a summons on him but was unsuccessful. Using a
bank deposits analysis and information obtained from Windermere
and other third parties, Ms. Besson made adjustments to
petitioner’s income relating to the years in issue.
On May 10, 2007, respondent issued petitioner a notice of
deficiency relating to the years in issue and determined the
following income tax deficiencies and additions to tax:
Additions to Tax
Year Deficiency Sec. 6651(a)(2) Sec. 6651(f) Sec. 6654(a)
2000 $17,808 $4,452 $12,911 $951
2001 21,540 5,385 15,617 861
1
2002 29,365 21,290 981
1
2003 125,151 90,734 3,275
1
2004 26,541 19,242 770
1
The amount of any addition to tax pursuant to sec.
6651(a)(2) shall be determined pursuant to sec. 6651(a)(2), (b),
and (c).
2
Washington is a community property State in which each
taxpayer spouse is treated as owning an undivided one-half
interest in the income earned by each spouse during marriage and
is liable for income tax on that one-half. See Poe v. Seaborn,
282 U.S. 101 (1930).
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On August 8, 2007, petitioner, while residing in the State
of Washington, filed his petition with the Court.
OPINION
The parties stipulated that petitioner received income,
failed to file tax returns, and failed to pay estimated taxes
relating to the years in issue. Petitioner nevertheless contends
that he is not required by law to file tax returns and that he is
not legally required to pay taxes.3 Such contentions are
meritless. Accordingly, we sustain respondent’s determinations
with respect to the income tax deficiencies.
Respondent also determined and established that petitioner
is liable for additions to tax pursuant to section 6651(f) for
fraudulent failure to file tax returns relating to the years in
issue. See sec. 7454(a); Rule 142(b); Bradford v. Commissioner,
796 F.2d 303, 307-308 (9th Cir. 1986), affg. T.C. Memo. 1984-601;
Clayton v. Commissioner, 102 T.C. 632, 646-647, 652-653 (1994);
Petzoldt v. Commissioner, 92 T.C. 661, 700-701 (1989). The
parties stipulated that petitioner failed to file tax returns and
failed to make estimated tax payments relating to the years in
issue. Petitioner used trusts to divert and conceal the receipt
of income and was evasive during examination. In addition,
petitioner did not have a good faith belief that he was exempt
3
Sec. 7491(a) is inapplicable because petitioner failed to
introduce credible evidence within the meaning of sec.
7491(a)(1).
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from filing. See Niedringhaus v. Commissioner, 99 T.C. 202, 217-
219 (1992). Accordingly, we sustain respondent’s determinations
relating to the section 6651(f) additions to tax.
Respondent further determined that petitioner is liable for
section 6651(a)(2) additions to tax for failure to pay the amount
of tax shown on his returns and section 6654(a) additions to tax
for failure to pay estimated income taxes relating to the years
in issue. With respect to the section 6651(a)(2) additions to
tax, respondent bears, but has failed to meet, the burden of
production pursuant to section 7491(c). See Rule 142(a); Wheeler
v. Commissioner, 127 T.C. 200, 210 (2006), affd. 521 F.3d 1289
(10th Cir. 2008). Respondent failed to establish that a return
or a substitute for return showing petitioner’s tax liability was
filed for any of the years in issue. See sec. 6651(g)(2);
Wheeler v. Commissioner, supra. Accordingly, petitioner is not
liable for the section 6651(a)(2) additions to tax.
With respect to the section 6654(a) additions to tax,
respondent bears, and has met, the burden of production pursuant
to section 7491(c). See sec. 6654(d)(1)(B); Rule 142(a).
Petitioner failed to make any estimated tax payments relating to
the years in issue and does not meet any of the exceptions
enumerated in section 6654(e). Therefore, we sustain
respondent’s determinations relating to the section 6654(a)
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additions to tax. See Wheeler v. Commissioner, supra at 210-211;
Higbee v. Commissioner, 116 T.C. 438, 446-447 (2001).
Contentions we have not addressed are irrelevant, moot, or
meritless.
To reflect the foregoing,
Decision will be entered
under Rule 155.