T.C. Mem o. 2 01 6- 72

UNITED STAT ES TAX COURT

HORACE MONROE CHAMBER S, Pet it io ne r v. COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 22 03 2- 14 . Fi le d Ap ril 21 , 20 16 . Hor ace M on ro e Ch am

be rs , pro se. Ran da ll Crai g S ch ne id er, fo r res po nd en t.

MEMORANDUM FINDINGS OF FACT AND OPINION KERRIGAN, Ju dg e: Res po nd en t d et erm in eda de fic ie nc y of $ 3,4 41 an d ad di ti on s t o t ax un de r se ct io n 6 65 1( a)(1 ) an d (2 ) of $7 74 an d $ 46 5, re sp ect iv el y , with re sp ectto pe ti ti on er’s Fed eral in co m e ta x fo r ta x year 20 11 . Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o t he Int ern al Rev enue Co de ineffe ctforth e y ear a t i ss ue , andall Ru le refe ren ces are t o t he Tax- 2 -

[* 2] Co urt Ru le s o f Prac ti ce an d P ro cedur e. W e ro un d a ll do ll ar am ou nt s t o t he ne ares t d ol lar. The is su es forour co ns id erat io n a re wh ethe r pe ti ti on er re cei ve d u nr ep orte d ta xabl e in co m e o f $3 5,2 57 an d wh ethe r pe ti ti on er i s l iabl e fo r ad di ti on s t o t ax un de r se ct io n 6 65 1( a)(1 ) an d (2 ). FINDINGS OF FACT Pet it io ne r res id edinCal ifo rn iawhenhe fil edth e p et it io n. Fo r ta x year 20 11 pe ti ti on er d idno t fi le anin co m e ta x re tu rn . Purs ua ntto se ct io n 6 02 0( b) , res po nd en t co m pl et eda subs ti tu te forreturn fo r pe ti ti on er fo r ta x y ear 2 01 1. Re sp on de ntall owe d p et it io ne r on e ex em pt io n andth e st an da rd de du ct io n. The i nc om e sh ownon th e return i s $ 35 ,25 7.

1 Pet it io ne r is anan nu it an t o f th e Ci vi l Se rv ic e Ret ire m en t Syste m (CSR S). The reco rd s o f th e Offi ce o f Pers on ne l M an ag em en t (OPM ) sh ow tha t i n t ax y ear 20 11 pe ti ti on er re cei ve d agro ss an nu ity of $ 46 ,39 2. Th e rec or ds als o re fle ctth at $3 5,2 57 was d is tri bu te d t o p et it io ne r an d $ 11 ,13 4 was di st rib ut edto hi s fo rm er sp ou se .

Pet it io ne r do es no t co nt en d t ha t h e h adit em iz edde du ct io ns an d d idno t 1 di sp ut e th e st an da rdde du ct io n.- 3 -

[* 3] Res po nd en t co nc ed es th atpe ti ti on er’s g ro ss an nu ity di st rib ut io n a m ou nt sh ou ldha ve be enreduc edby $3,1 52 . This reduc ti onrefl ect s p et it io ne r’s co nt rib ut io ns to hi s re ti rem en t p lan. OPINION Pet it io ne r ha s the bu rd enof p ro vi ng th atres po nd en t’s d et erm in at io ns are i n erro r, in cl ud in g the de te rm in at io n o f un rep orte d i nc om e. See R ul e 1 42 (a); W el ch v. Hel ve rin g, 2 90 U.S. 11 1, 1 15 (19 33 ). The U.S. Co urt o f App eal s fo r th e Nin th Ci rcu it , to whi chanap pe al inth is cas e wou ldli e, se e se c. 74 82 (b )(1 )(A), h as he ld th atforth e p res um

pt io n o f co rrec tn es s t o a tt ach to th e n ot ic e o f de fic ie nc y in un rep orte d i nc om e cas es su chas t hi s, the Co m m is si on er m

us t es tabl is h “ so m e ev id en ti ary fo un da ti on ” co nn ect in g t he tax pa y er wi th th e in co m e-p ro du ci ng act iv ity or d em on strat in g tha t the tax pa y er ac tu al ly recei ve d u nr ep orte d i nc om e, se e Weim ers ki rch v. Co m m is si on er, 5 96 F.2d35 8, 3 61 -3 62 (9t h C ir. 1 97 9) , rev ’g 67 T.C. 67 2 (1 97 7) ; s ee al so Edward s v . Comm is si on er, 6 80 F.2d12 68 , 12 70 -1 27 1 (9 th Cir . 19 82 ) (h ol di ng th atth e Co m m is si on er’s d et erm in at io n o f a de fic ie nc y

is pre su m

pt iv el y co rrec t o nc e so m e subs tant iv e ev id en ce i s i ntro du ced de m on st rat in g tha t the tax pa y er re cei ve d u nr ep orte d i nc om e). If the Co m m is si on er i ntro du ces so m e ev id en ce tha t the tax pa y er re cei ve d u nr ep orte d in co m e, th e b ur de n s hi fts to th e ta xp ay er, wh o m us t es tabl is h b y

a pr ep on de ran ce- 4 -

[* 4] of t he ev id en ce tha t the de fic ie nc y was arb itrary or erro ne ou s. See Hardy v. Co m m is si on er, 1 81 F.3d10 02 , 10 04 (9t h C ir. 1 99 9) , aff’g T.C. Mem o. 1 99 7- 97 . Res po nd en t h as est ab li sh edth atev id en ti ary fo un da ti on . Mor eo ve r, pe ti ti on er h as no t cl ai m edor s ho wn tha t h e m eet s the requi rem en ts of s ect io n 7 49 1( a) t o s hi ft t he bu rd enof p ro of

to res po nd en t as to an y

rel ev an t fa ctua l i ss ue . I. Unr ep orte d In co m e Sect io n 6 1( a) p ro vi de s: “ [G]ros s i nc om e m ean s al l i nc om e fro m what ev er so ur ce d eri ve d, i nc lu di ng (bu t n otli m it edto ) th e fo ll owi ng it em s: * * * (1 1) Pen si on s” . Peti ti on er d oe s n otdi sp ut e th athe rece iv ed$3 5,2 57 fro m CSRS intax y ear 2 01 1. Ra th er, p et it io ne r co nt en ds th atOPM h as m is cal cu la te d h is an nu ity . Pet it io ne r be li ev es th athe sh ou ldha ve rece iv eda hi gh er am ou nt . Peti ti on er co nt en ds th atth e am ou nton th e n ot ic e o f de fic ie nc y is in co rrec t. Pet it io ne r’s co nt en ti on as t o t he pro pe r am ou ntof h is an nu ity fortax y ear 20 11 is no t an is su e th atis pro pe rly befo re thi s C ou rt. Th e Tax Co urt i s a c ou rt o f li mit edjuri sd ic ti on , andwe m ay ex erci se ou r juri sd ic ti onon ly to the ex te nt au th or iz edby Con gr es s. See sec . 74 42 ; Naf te l v . Comm is si on er, 8 5 T.C. 5 27 , 52 9 (1 98 5) ; s ee al so Co m

m is si on er v . Goo chMi ll in g & Elev at orCo ., 32 0 U.S. 4 18 , 42 0- 42 2 (1 94 3) . This Co urt l ack s juris di ct io n o ve r th e al lo cat io n o r am ou ntof pe ti ti on er’s an nu ity

pa ym en ts .- 5 -

[* 5] Pet it io ne r do es no t d is pu te th athe rece iv ed$3 5,2 57 . Res po nd en t i nc lu de d th is am ou nton th e subs ti tu te for return. We con cl ud e p et it io ne r’s ta xabl e in co m e fo r 20 11 is th e $ 35 ,25 7 o f in co m e fro m hi s an nu ity

di st rib ut io n l es s h is $3 ,15 2 o f co nt rib ut io ns to hi s re ti rem en t p lan. II. Add it io ns to Tax Und er s ect io n 7 49 1( c) the Co m m is si on er b ears th e b ur de n o f pr oduc in g ev id en ce wi th res pe ctto th e li ab il ity of t he tax pay er fo r any

ad di ti on to tax . See Ru le 14 2( a); Hig be e v . Comm is si on er, 1 16 T.C. 43 8, 4 46 -4 47 (20 01 ). Once th e Co m m is si on er m eet s thi s b ur de n, the tax pay er m us t co m e fo rwardwith p ers ua si ve ev id en ce tha t the Co m

m is si on er’s d et erm in at io n i s i nc orrect . Hig be e v . Co m m is si on er, 1 16 T.C. at 4 46 -4 47 . A. Sect io n 6 65 1( a)(1 ) Sect io n 6 65 1( a)(1 ) au th or iz es th e im po si ti on of a n a dd it io n t o t ax for fai lu re to fil e a t im el y

return u nl es s the tax pa y er p ro ve s tha t s uc h fa il ur e is du e to reas on ab le cau se an d i s n otdu e to wil lfu l n eg le ct . See Un it edSta te s v . Boyle, 4 69 U.S. 24 1, 2 45 (19 85 ); Harri s v . Commis si on er, T.C. Mem o. 1 99 8- 33 2. Pe ti ti on er di d n otfil e a t ax return fo r 20 11 . Res po nd en t’s re co rd s s ho w th ere was no tax return fi le d fo r ta x year 20 11 . Res po nd en t h as m etth e b ur de n o f pr oduc ti on un de r se ct io n 7 49 1( c). Pet it io ne r di d n otsh ow re as on ab le cau se forhi s fa il ur e to fil e a- 6 -

[* 6] ti m el y

tax return. Th eref

or e, pe ti ti on er i s l iabl e fo r th e ad di ti on to tax un de r se ct io n 6 65 1( a) fo r ta x year 20 11 . B. Sect io n 6 65 1( a)(2 ) Sect io n 6 65 1( a)(2 ) im

po se s an ad di ti on to tax forfai lure t o t im el y pa y th e am ountsh own on a return. Ina cas e su chas t hi s wh ere t he tax pay er d idno t t im el y fil e a return fo r th e ta x year atis su e, th e Co m m is si on er m

us t i nt ro du ce ev id en ce th ata va li d s ub st itut e fo r return was m ad e p ur su an t t o s ect io n 6 02 0( b) . Sec. 66 51 (g )(2 ). Pet it io ne r di d n otdi sp ut e th e v al id ity of t he subs ti tu te for

return. Pet it io ne r di d n otsh ow re as on ab le cau se forhi s fa il ur e to pa y th e am ou ntsh own as du e o n h is tax return. W e h ol d tha t p et it io ne r is li ab le forth e ad di ti on to tax un de r 66 51 (a)( 2) for ta x year 20 11 . Any con te nt io ns we ha ve no t ad dr es se d a re i rrel ev an t, m oo t, o r m eri tl es s. Bec au se th e am ount s o f th e d efi ci en cy an d t he ad di ti on s t o t ax m us t b e reduc edto acco un t fo r pe ti ti on er’s co nt rib ut io ns of $ 3,1 52 to hi s re ti rem en t p lan, Deci si on wil l b e en te red un de r Ru le 15 5.