1Unless otherwise indicated, subsequent section references

are to the Internal Revenue Code in effect for the year at issue. 

All Rule references are to the Tax Court Rules of Practice and

Procedure.

T.C. Summary Opinion 2005-64

UNITED STATES TAX COURT

CHARLES LEVINE PRESTON, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 4582-04S. Filed May 24, 2005,

Charles Levine Preston, pro se.

Willard N. Timm, Jr., for respondent.

COUVILLION, Special Trial Judge: This case was heard

pursuant to section 7463 in effect when the petition was filed.1

The decision to be entered is not reviewable by any other court,

and this opinion should not be cited as authority.
- 2 -

2The stipulation of facts states that petitioner filed his

1998 tax return on Nov. 19, 2003, and the tax return was entered

into the IRS database on Dec. 22, 2003.

Respondent determined a deficiency of $4,678 in petitioner’s

Federal income tax for the year 1998, a section 6651(a)(1)

addition to tax of $2,074.32, and a section 6654(a) addition to

tax of $212.32. At trial, respondent reduced the deficiency to

$1,381 and the additions to tax to $268 and $47, respectively. 

Petitioner does not dispute the deficiency. The issues for

decision are whether the statute of limitations under section

6501 bars respondent from assessing petitioner’s 1998

liabilities, and, if respondent is not barred, whether petitioner

is liable for the additions to tax.

Some of the facts were stipulated. Those facts, with the

exhibits annexed thereto, are so found and made part hereof. 

Petitioner’s legal residence at the time the petition was filed

was Riverdale, Georgia.

Petitioner did not file his 1998 Federal tax return until

November 19, 2003. He had not previously requested an extension

of time to file, nor had he made any estimated payments toward

his 1998 tax liability. Respondent recorded the receipt of

petitioner’s 1998 Federal tax return on December 22, 2003;2

however, respondent had, on December 17, 2003, already issued a

notice of deficiency based on a substitute for return filed on

September 5, 2003, by respondent. The substitute for return
- 3 -

3Respondent conceded that petitioner is not liable for the

sec. 72(t) additional tax for early withdrawal on this

distribution.

4Generally, the determinations of the Commissioner in a

notice of deficiency are presumed correct, and this presumption

(continued...)

allowed no deductions or exemptions; therefore, the notice of

deficiency reflected a much larger tax liability than that agreed

to by respondent at trial. When petitioner met with the Appeals

officer, the Appeals officer accepted the computations petitioner

listed on his late-filed return and reduced the deficiency to the

above amount.

Petitioner has worked as a firefighter for 18 years. Since

at least 1998, he has been employed as such by the city of

College Park, Georgia. Petitioner reported wages of $27,543 from

the city on his late-filed 1998 Federal income tax return;

however, petitioner did not include income of $7,869 from a

qualified pension plan, the International City Management

Association Retirement Corp Trust (ICMA Retirement Trust), early

distribution. In 1998, petitioner withdrew $7,869 from the ICMA

Retirement Trust for payment of medical expenses for his wife in

excess of those covered by his health insurance.3 Petitioner did

not include the distribution from the ICMA Retirement Trust as

income on his tax return.

Petitioner bears the burden of proving he is not liable for

the deficiency.4 At trial, petitioner did not challenge the
- 4 -

4(...continued)

places the burden on the taxpayer to show that the determinations

are incorrect. Rule 142(a); INDOPCO, Inc. v. Commissioner, 503

U.S. 79, 84 (1992); Welch v. Helvering, 290 U.S. 111, 115 (1933). 

Sec. 7491(a), under certain circumstances, alters the burden of

proof with respect to a taxpayer’s liability for taxes in court

proceedings arising in connection with examinations commencing

after July 22, 1998. Although this examination commenced after

July 22, 1998, the issue does not fall within the scope of sec.

7491(a). Petitioner, therefore, bears the burden of proof.

5The fact that respondent based his notice of deficiency on

a substitute for return that was filed on Sept. 5, 2003, is

immaterial. Had petitioner never filed his 1998 Federal tax

(continued...)

determination that the early ICMA Retirement Trust distribution

was income. Petitioner referred to a number of Internal Revenue

Code sections and legal conclusions during his testimony, but his

primary contention is that respondent is barred by the statute of

limitations on assessment for his 1998 tax year.

Generally, the Commissioner is allowed 3 years after a

return is filed to issue a notice of deficiency. Sec. 6501. 

Petitioner contends that because respondent issued the notice of

deficiency in 2003, the 3-year period of limitations bars

assessment and collection against him. The Court disagrees with

this argument. The filing of petitioner’s Federal income tax

return is the event that commences the 3-year period of

limitations. Sec. 6501(a). Petitioner filed his 1998 Federal

income tax return on November 19, 2003. Respondent issued the

notice of deficiency to petitioner for the 1998 tax year on

December 17, 2003.5 That is well within the period of
- 5 -

5(...continued)

return, the 3-year period of limitations would not have

commenced, and the notice of deficiency could have been issued at

any time. Sec. 6501(c)(3).

6Respondent has met his burden of production with respect to

the addition to tax, and petitioner has the burden of proving

that he is not liable for the addition. See sec. 7491(c); Higbee

v. Commissioner, 116 T.C. 438, 446-447 (2001).

limitations; therefore, respondent is not barred from assessment

and collection of the tax against petitioner. In the absence of

a challenge to the determined deficiency, petitioner is,

therefore, liable for the tax of $1,381.

Respondent determined a section 6651(a)(1) addition to tax

against petitioner.6 A taxpayer is subject to an addition to tax

for failure to file a timely return unless he can establish that

such failure “is due to reasonable cause and not due to willful

neglect”. Sec. 6651(a)(1). Willful neglect is defined as “a

conscious, intentional failure, or reckless indifference.” 

United States v. Boyle, 469 U.S. 241, 245 (1985). Petitioner was

required to file a timely Federal income tax return for 1998. 

See sec. 6012. 

Petitioner filed his 1998 Federal income tax return almost 5

years late. When asked at trial why he did not file timely,

petitioner responded: “I made an error. Let’s put it that way 

* * * I did not get the paperwork to * * * [the tax preparer] on

time, and I, during that part of, during that year, some things

were going on and I just made a mistake. It was my fault it
- 6 -

didn’t get turned in.” Although petitioner may have had numerous

concerns or problems, simply neglecting or forgetting to file his

Federal tax return does not amount to “reasonable cause”. See

sec. 6651(a)(1); United States v. Boyle, supra at 246. 

Respondent is, therefore, sustained on this issue.

Respondent also determined a section 6654 addition to tax

against petitioner. A taxpayer is subject to this addition to

tax “in the case of any underpayment of estimated tax by an

individual”. Sec. 6654. Subject to certain statutory

exceptions, the addition to tax is automatically applied if the

amounts of withholding and estimated tax payments do not equal

statutorily designated amounts. Niedringhaus v. Commissioner, 99

T.C. 202, 222 (1992).

The statute, however, provides an exception to this

automatic imposition where the preceding taxable year was 12

months, the taxpayer did not have any liability for tax for such

year, and the taxpayer was a citizen or resident of the United

States throughout the preceding taxable year. Sec. 6654(e)(2). 

Petitioner is a U.S. citizen and had no income tax liability for

the 1997 taxable year. Petitioner’s liability for the 1998

taxable year was not due to insufficient withholdings by his

employers, as respondent alleges, but due solely to the tax due

on a one-time early withdrawal from his retirement fund. 

Petitioner falls within the stated exception in section
- 7 -

6654(e)(2) and is, therefore, not liable for the section 6654

addition to tax.

The Court has considered all other arguments advanced by the

parties, and, to the extent such arguments have not been

specifically addressed, the Court concludes they are without

merit.

Reviewed and adopted as the report of the Small Tax Case

Division.

 Decision will be entered for

 respondent for the deficiency and the

 section 6651(a)(1) addition to tax and

 for petitioner for the section 6654(a)

 addition to tax.