*208 Decision will be entered for the respondent.
Petitioner filed no declaration of estimated tax for the year 1947. For such omission, respondent determined petitioner to be subject to an addition to his tax for that year pursuant to section 294 (d) (1) (A), I. R. C.Held: No reasonable cause existed for petitioner's failure to file the requisite declaration and respondent is sustained in his determination.
*145 The respondent determined a "deficiency in penalty" in the amount of $ 1,114.22 for the year 1947, consequent on the failure of the petitioner to file a declaration of estimated tax for that year. The only question raised by the pleadings is whether petitioner is subject to such addition to his income tax because of such failure to file.
FINDINGS OF FACT.
The petitioner is Rene R. Bouche, a painter and artist who came to the United States from France in 1941. He maintains a studio at 38 Central Park South, New York, New York. Petitioner filed his individual income tax returns for the taxable years 1945 through 1950 with the collector of internal revenue for the third district of New York. He filed a declaration of estimated tax with the same collector for the years 1945, 1946, and 1950, and made payments thereon. He did not file declarations of estimated*210 tax, nor make payments thereon, for the years 1947, 1948, and 1949.
Petitioner's wife and son came to the United States from France in February 1946, and petitioner supported them during 1947. The son, now 18 years old, was the victim of paralysis due to an attack of poliomyelitis at the age of four, from which he never fully recovered. During the year, also, petitioner moved with his family into a seven-room house which he had purchased in 1946 with a cash payment of $ 20,000 and the assumption of a mortgage for $ 10,000. He expended an additional $ 9,267.77 on this house in 1947 for furniture, home furnishings, fixtures, decorations, repairs, and current maintenance. In that year he also owned a Cadillac automobile for which he had paid $ 1,500 in 1942 or 1943.
Petitioner's individual income tax returns for 1945 through 1950 reported net income and dependents as follows:
| Year | Net income | Number | Relationship |
| 1945 | $ 32,463.89 | 2 | Wife and mother-in-law. |
| 1946 | 25,953.69 | 3 | Wife, son, mother-in-law. |
| 1947 | 26,994.59 | 2 | Wife and son. |
| 1948 | 13,983.40 | 2 | Wife and son. |
| 1949 | 16,034.07 | 2 | Wife and son. |
| 1950 | 14,575.93 | 2 | Wife and son. |
Petitioner, in his returns, itemized *211 his medical expenses for the years 1945 through 1950 as follows:
| 1945 | None |
| 1946 | None |
| 1947 | $ 2,113.97 |
| 1948 | 1,679.73 |
| 1949 | None |
| 1950 | None |
*146 The collector's Certificate of Assessments and Payments (Form 899), showed the following:
| Payments on | ||
| Year | declaration | Balance of tax assessed |
| of estimated | ||
| tax | ||
| 1945 | $ 4,600.00 | $ 10,094.03 paid (no outstanding balance). |
| 1946 | 3,000.00 | $ 7,556.05 paid (no outstanding balance). |
| 1947 | * None | $ 9,919.75 outstanding balance. |
| 1948 | * None | $ 2,402.02 paid (no outstanding balance). |
| 1949 | * None | $ 2,935.30 |
| 2,644.06 paid | ||
| 291.24 outstanding balance. | ||
| 1950 | 1,400.00 | $ 1,255.02 paid (no outstanding balance). |
The petitioner's 1945 return was prepared and signed by one Julius W. Heynemann of the accounting firm of Heynemann & Spitzer, New York, New York. Heynemann was not a certified public accountant but had been practicing the profession of accounting for 25 years, originally in Europe, later in the United States. After coming to the United States in 1941, he had taken a 3-year course of study at New York University. He has done all of the petitioner's accounting work*212 and has been his tax adviser since 1942 or 1943. Petitioner would submit his bank statements and canceled checks to Heynemann, who would then take care of the preparation and filing of petitioner's returns. Such returns for the years 1946 through 1950 were signed by Heynemann's partner, Harold W. Spitzer, who is a certified public accountant.
In the early part of 1947 petitioner owed considerable back taxes and had insufficient cash on hand with which to pay them and the installment of his estimated tax. Faced with the dilemma of whether to have petitioner pay the cash which was available on the tax arrears or on the estimate then due to be filed, Heynemann telephoned the office of the collector for the third district of New York. In the telephone conversation with an unnamed, unknown, and unidentified employee in the collector's office, Heynemann understood the party to state that a declaration of estimated tax without the prerequisite payment thereon would not be considered as the filing thereof, and that, under petitioner's circumstances, as between payment on the delinquent taxes and payment on estimated taxes, it was preferable to pay the former to eliminate the necessity*213 of having two accounts running. Thereafter Heynemann prepared for petitioner no declaration of estimated tax for 1947 and none was filed by petitioner. No such declaration was prepared and filed for 1948 or 1949.
Attached to the petitioner's 1949 individual income tax return was a letter signed by petitioner reading as follows:
*147 Memo: To the Collector
Every effort is being expended in order to pay my taxes. I am presently trying my utmost to clear up back taxes which are considerable. My record reveals that while it takes me some time to pay, I eventually clear up my obligations. Your indulgence in this matter will be appreciated.
R. R. Bouche.(S) R R Bouche.
There was no reasonable cause for petitioner's failure to file a declaration of estimated tax for 1947.
OPINION.
Petitioner failed to file a declaration of estimated tax for the taxable year 1947 as required by section 58 (a), Internal Revenue Code. 1*214 Respondent has accordingly determined that petitioner is subject to an addition to his tax for that year pursuant to section 294 (d) (1) (A) of the Code. 2
*215 An examination of the statutes reveals that the provisions requiring the filing of a declaration of estimated tax are no less mandatory than those requiring the filing of final income tax returns. The sections of the Code so providing are clear and explicit. They specify which taxpayers shall file and the time and place of filing. They provide for the payments to be made in accordance with the declaration. They provide specifically the sanctions or penalties in the form of additions to the tax that will follow a failure to comply with the law. These statutory provisions are very similar to those providing for the filing of personal holding company returns. In both instances *148 the filing is mandatory and the failing to file may be excused only if failure was due to a reasonable cause. Although this case appears to be the first case arising under section 294 (d) (1) (A), the decisions in the personal holding company cases are apt. See Tarbox Corporation, 6 T.C. 35">6 T. C. 35, and Hermax Co., 11 T.C. 442">11 T. C. 442, affd. 175 F.2d 776">175 F. 2d 776.
Petitioner does not deny the existence of the obligation to file*216 an estimate and pay a part of the tax. In fact, the record shows that he filed such declarations in 1945 and 1946. He contends, however, that his omission to do so in 1947 was "due to reasonable cause and not to willful neglect." He claims he had been subject to heavy expenditures; that his medical expenses were high and he did not have the ready cash available to make the payment, which is to say, he did not find it convenient to pay his estimated installment, together with certain arrears in tax for prior years. When the facts are exposed the weakness of petitioner's case is apparent. For the years 1945, 1946, and 1947 petitioner had net income, before taxes, of approximately $ 32,500, $ 26,000, and $ 26,000, and $ 27,000, respectively. In 1946 he bought a $ 30,000 home, paying $ 20,000 in cash and assuming a mortgage for $ 10,000. In 1946 he also spent approximately $ 6,000 furnishing the house with antique furniture, and spent $ 2,000 to $ 3,000 in repairs and improvements. Since no estimate was made for 1947, we look to prior years for information as to the probable amount of estimated tax installment that was due in March 1947. We find that for 1945 and 1946 he filed*217 estimates and made appropriate payments of $ 4,600 and $ 3,000, respectively. The estimated tax installment for 1947 would, perhaps, have been about $ 3,000. Petitioner did not file an estimate and pay the installment due because he didn't have ready cash available.
The above facts show the shallowness of petitioner's position. Many, if not most, taxpayers have, at times, found themselves without ready cash to pay their taxes. This fact is not reasonable cause for not filing the estimate and paying the tax due thereon. True, such situations may require sacrifice, but the Government exists only by the sacrifices of the citizens. Taxes may seem oppressive and in derogation of absolute personal right, but taxes must be paid if governments are to endure. We are wholly unimpressed by petitioner's reasons for failure to file his estimated tax and pay the installment due. See Albert T. Felix, 12 T. C. 933; Carl M. Stephan, 16 T. C. 1157. Taxpayers may not, in marshaling their debts, consign their Federal tax obligations to the bottom of the list. The dignity of the Government's claims entitle it, rather, to top priority.
*218 Petitioner also relies on the fact that he turned over to an accountant all financial affairs, including the preparation of his tax returns, contending that this fact shields him from the penalty imposed by *149 respondent. For such fact to be a defense against the consequences of the failure to file a return, certain prerequisites must appear. It must appear that the intervening person was qualified to advise or represent the taxpayer in the premises and that petitioner relied on such qualifications. The record here shows only that petitioner had employed an accountant and turned over to him the necessary data. It fails entirely to show that the accountant was a competent tax adviser. He had practiced accounting somewhere in Europe prior to coming to the United States in 1941. He then took some work in a university over the ensuing three years. What this work was or what subjects were pursued is not revealed. He is associated in the practice with a certified public accountant but for aught the record shows this may be the only tax matter he ever handled. The record reveals no other item of experience in tax practice. On such a showing we are unable to find that he *219 was either actually or apparently qualified to give advice on the complicated questions which confront a tax adviser. On this phase of the case there is a complete lack of proof. The burden of proof being on the petitioner, he must bear the consequences of the failure. Furthermore, if the conduct of the accountant in the instant case is typical, and if it is his practice to accept as an adequate basis for advising his clients in tax matters a statement by an unknown, unnamed, and unidentified person who answers the telephone in a collector's office, we would be obliged to hold that such party has thereby shown his lack of qualifications.
We hold that petitioner has not shown that his failure to file the estimate required by law and to pay the appropriate installment was due to reasonable cause.
Decision will be entered for the respondent.
Footnotes
*. No declaration of estimated tax.↩
1. SEC. 58. DECLARATION OF ESTIMATED TAX BY INDIVIDUALS.
(a) Requirement of Declaration. -- Every individual * * * shall, at the time prescribed in subsection (d), make a declaration of his estimated tax for the taxable year if --
(1) his gross income from wages (as defined in section 1621) can reasonably be expected to exceed the sum of $ 4,500 plus $ 600 with respect to each exemption provided in section 25 (b); or
(2) his gross income from sources other than wages (as defined in section 1621) can reasonably be expected to exceed $ 100 for the taxable year and his gross income to be $ 600 or more.↩
2. SEC. 294. ADDITIONS TO THE TAX IN CASE OF NONPAYMENT.
* * * *
(d) Estimated Tax. --
(1) Failure to file declaration or pay installment of estimated tax. --
(A) Failure to File Declaration. -- In the case of a failure to make and file a declaration of estimated tax within the time prescribed, unless such failure is shown to the satisfaction of the Commissioner to be due to reasonable cause and not to willful neglect, there shall be added to the tax 5 per centum of each installment due but unpaid, and in addition, with respect to each such installment due but unpaid, 1 per centum of the unpaid amount thereof for each month (except the first) or fraction thereof during which such amount remains unpaid. In no event shall the aggregate addition to the tax under this subparagraph with respect to any installment due but unpaid, exceed 10 per centum of the unpaid portion of such installment. For the purposes of this subparagraph the amount and due date of each installment shall be the same as if a declaration had been filed with the time prescribed showing an estimated tax equal to the correct tax reduced by the credits under sections 32 and 35.↩