T.C. Summary Opinion 2010-144
UNITED STATES TAX COURT
MARK PENNINGTON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5681-08S. Filed September 27, 2010.
Mark Pennington, pro se.
Sarah Bolen, for respondent.
WELLS, 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
1
All section references are to the Internal Revenue Code
(Code) in effect for the year in issue, and all Rule references
are to the Tax Court Rules of Practice and Procedure, unless
otherwise indicated. All amounts are rounded to the nearest
dollar.
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decision to be entered is not reviewable by any 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 his 2003 tax year of $32,831, a failure to file
addition to tax pursuant to section 6651(a)(1) of $7,166, a
failure to pay addition to tax pursuant to section 6651(a)(2) of
$6,688, and a failure to pay estimated income tax addition to tax
pursuant to section 6654 of $819. The parties stipulated
several of the underlying issues. Both parties agree that
petitioner is liable for a deficiency of $35,877 and that
petitioner is not liable for a failure to pay estimated income
tax addition to tax pursuant to section 6654.2 At trial,
petitioner conceded that he was liable for the failure to pay
addition to tax pursuant to section 6651(a)(2). Accordingly, the
only issue remaining for decision is whether petitioner is liable
for the failure to file addition to tax pursuant to section
6651(a)(1).
Background
Some of the facts and certain exhibits have been stipulated.
The stipulations of fact are incorporated in this opinion by
reference and are found accordingly.
2
Neither party offered an explanation as to the difference
between the amount of the deficiency in the stipulation of facts
and the amount of the deficiency in the notice of deficiency.
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At the time the petition was filed, petitioner resided in
Florida. Petitioner is married to Cynthia Pennington.
Throughout tax year 2003, petitioner worked as an attorney.
Petitioner moved offices three times and his personal residence
once between 2003 and February 2008. In the process, petitioner
lost many of his personal records.
For tax year 2003, petitioner timely filed Form 4868,
Application for Automatic Extension of Time To File U.S.
Individual Income Tax Return with the Internal Revenue Service
(IRS) and included a payment of $983. Petitioner also filed Form
9465, Installment Agreement Request, with the IRS, stating that
the total tax due was $8,171 and that he made a payment of $5,000
with his tax return. For the year in issue, respondent has no
record of a Federal income tax return filed by petitioner or of
any payment in excess of the $983 paid with Form 4868.
Petitioner sent the IRS a check dated April 17, 2006, for
$4,597 for his tax year 2005 estimated Federal income tax
liability. Respondent has no record of a return filed for tax
year 2005.
Petitioner failed to file a tax return for tax year 2008.
Discussion
Generally, a return is considered filed with the IRS when
the return is delivered to and received by the IRS. See United
States v. Lombardo, 241 U.S. 73, 76 (1916); Trout v.
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Commissioner, 131 T.C. 239, 246 (2008). However, a return that
is mailed by the taxpayer on or before the filing deadline and
received by the IRS after the filing deadline may be considered
timely filed if: (1) The postmark date falls on or before the
filing deadline; and (2) the return is deposited in the mail in
the United States in an envelope or wrapper properly addressed to
the appropriate office with postage prepaid. Sec. 7502(a).
Where a return is sent by registered or certified mail, the
registration or certification is prima facie evidence of delivery
and the date of registration or certification is deemed the
postmark date. Sec. 7502(c); sec. 301.7502-1(c)(2), Proced. &
Admin. Regs.
Section 6651(a)(1) imposes an addition to tax for failure to
file a return by the date prescribed (determined with regard to
any extension of time for filing). The addition to tax is 5
percent of the tax required to be shown on the return if the
failure to file does not exceed 1 month, with an additional 5
percent per month for each month the failure continues, up to a
maximum of 25 percent.3 Id. However, the failure to file
addition to tax is not imposed if the taxpayer can establish that
such failure is due to reasonable cause and not due to willful
3
The sec. 6651(a)(1) addition to tax is reduced by the
amount of the sec. 6651(a)(2) addition for any month (or fraction
thereof) to which an addition to tax applies under sec.
6651(a)(1) and (2). See sec. 6651(c)(1).
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neglect. Id. To prove reasonable cause, the taxpayer must show
that he exercised ordinary business care and prudence but
nonetheless could not file the return when it was due. See
Crocker v. Commissioner, 92 T.C. 899, 913 (1989).
The Commissioner bears the burden of production with respect
to the failure to file addition to tax, pursuant to section
7491(c); however, the taxpayer bears the ultimate burden of
proof. Higbee v. Commissioner, 116 T.C. 438, 446 (2001). The
Commissioner need not come forward with evidence regarding
reasonable cause; it is the taxpayer’s burden to raise such a
defense. Higbee v. Commissioner, supra at 446.
As proof of petitioner’s failure to file his 2003 Federal
income tax return, respondent offered a Certification of Lack of
Record for petitioner for the year in issue. Accordingly, we
conclude that respondent has met his burden of production
regarding the applicability of the section 6651(a)(1) addition to
tax.
Petitioner, a calendar year taxpayer, was required to file a
2003 Federal income tax return by April 15, 2004 (2003 return).
Sec. 6072(a). However, taxpayers are allowed an automatic 4-
month extension of time to file if they Form 4868 before the date
prescribed for filing the individual income tax return.4 Sec.
4
Temporary regulations applicable to applications for
automatic extensions of time to file an individual income tax
(continued...)
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6081; sec. 1.6081-4(a), Income Tax Regs. Petitioner timely filed
Form 4868 extending the time to file a 2003 return until August
15, 2004.5 Consequently, in order to prevail on the section
6651(a)(1) addition to tax, petitioner must prove either that he
timely filed his 2003 return by the extended due date or that he
had reasonable cause for his failure to file his return by the
extended due date.
By letter dated December 10, 2007, respondent mailed
petitioner a notice of deficiency determining, among other
things, the failure to file addition to tax pursuant to section
6651(a)(1). Petitioner worked with respondent’s employee Sandra
Lowe to resolve the issues in the notice of deficiency. Ms. Lowe
advised petitioner to recreate a return for the 2003 tax year.
On October 20, 2008, petitioner faxed Ms. Lowe a Federal income
tax return that he recreated for tax year 2003. On November 7,
2008, petitioner found a box containing the 2003 return he and
Mrs. Pennington had purportedly filed, which was dated July 4 and
4
(...continued)
return filed after Dec. 31, 2005, increase the automatic
extension period from 4 months to 6 months. Sec. 1.6081-4T,
Temporary Income Tax Regs., 70 Fed. Reg. 67359 (Nov. 7, 2005).
These regulations became permanent during 2008, and the permanent
regulations apply to applications for automatic extensions of
time to file individual income tax returns filed after July 1,
2008. See T.D. 9407, 2008-33 I.R.B. 330.
5
It is unclear from the record whether petitioner’s Form
4868 was for himself or himself and Mrs. Pennington.
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9, 2004. On December 18, 2008, petitioner provided respondent a
copy of the allegedly filed 2003 return.
Petitioner testified that he always files his returns.
Petitioner contends that he filed a 2003 return on July 9, 2004,
and a 2005 return on August 10, 2006. However, respondent has no
record of a return filed by petitioner for tax year 2003 or 2005,
and at trial petitioner admitted that he did not file a return
for tax year 2008.6 In the months leading up to trial,
petitioner changed his position regarding the filing of his 2003
return a number of times.7 Accordingly, we give little weight to
petitioner’s testimony that he “always” files his returns.
Petitioner testified that he mailed a 2003 return from a
post office in the city where he resided. However, petitioner
did not offer proof of mailing such as proof of certified or
registered mailing. See sec. 7502(c). Additionally, petitioner
failed to recall specifically either mailing the 2003 return or,
if he mailed it, from which post office he mailed it.
6
The trial of the instant case took place on Nov. 3, 2009.
Petitioner did not contend that he filed for an extension of time
to file the 2008 return. The extension, if timely filed, would
have expired on Oct. 15, 2009. Sec. 1.6081-4(a), Income Tax
Regs.
7
In his motion to continue dated Nov. 5, 2008, petitioner
stated that he was “certain that he had filed his tax return for
2003 like every other year. However, it now appears that this
was not the case for the year 2003.” At trial on Nov. 3, 2009,
petitioner testified that he was certain that he had timely filed
his 2003 return.
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Petitioner and his wife signed the copy of the 2003 return
provided to respondent on December 18, 2008. The allegedly filed
return was dated July 4 and 9, 2004. We note that Ms. Pennington
did not testify at trial. Moreover, petitioner failed to offer
proof of actual delivery of the 2003 return or reasonable cause
for failure to file his 2003 return.
Accordingly, on the basis of the record, we hold that
petitioner has failed to meet his burden of proving that he
timely filed a 2003 Federal income tax return and has failed in
his burden of proving reasonable cause for his failure to timely
file his return. Consequently, we sustain respondent’s
determination of an addition to tax pursuant to section
6651(a)(1).
The Court has considered all other arguments made by the
parties and, to the extent we have not addressed them herein, we
conclude they are them moot, irrelevant, or without merit.
To reflect the foregoing and the parties’ concessions,
Decision will be entered
under Rule 155.