T.C. Mem o. 2 01 5- 30

UNITED STAT ES TAX COURT

JEFF REY B. PALMER, Pet it io ne r v. COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 96 91 -1 2. Fi le d F eb ru ary 25 , 20 15 . Je ffre y B. Pal m er, fo r hi m se lf. Dav idZos s, fo r res po nd en t.

MEMORANDUM FINDINGS OF FACT AND OPINION MORR ISON, Ju dg e: The re sp on de nt(refe rredto he re as th e “ IRS” ) m ai le d th e p et it io ne r, Je ffre y

B. Pal m er, n ot ic es of d efi ci en cy for th e 2 00 8 a nd20 09 tax y ears , res pe ct iv el y . In tho se no ti ces th e IRS de te rm in edth e fo ll owi ng de fic ie nc ie s-2 -

[* 2] inin co m e ta x, wi th ad di ti on s t o t ax forlat e fi li ng , lat e p aym en t, an d fa il ur e to pa y est im at edin co m e ta x: 1 Add it io ns to tax Year Defi ci en cy Sec. 66 51 (a)( 1) Sec.

66 51 (a)( 2) Sec.

66 54 (a) 20 08 $3 ,83 0 $7 38 .23 $5 24 .96 $1 03 .50 20 09 80 ,64 8 18 ,12 4.6 5 8,4 58 .17 1,9 28 .41 Pal m er t im el y

fil eda pe ti ti on un de r se ct io n 6 21 3( a) fo r red et erm in at io n o f th e de fic ie nc ie s an d t he ad di ti on s t o t ax . W e h av e juri sd ic ti on un de r se ct io n 6 21 4( a). Afte r co nc es si on s, the is su es forde ci si on are: (1 ) Whe th er Pa lm er i s en ti tl edto m ov in g- ex pe ns e d educ ti on s fo r th e 2 00 8 a nd 20 09 tax y ears . W e h ol d t ha t h e is no t. See in fra p art1. (2 ) Whe th er Pa lm er i s l iabl e fo r th e se ct io n- 66 51 (a)( 1) ad di ti on to tax forth e 20 08 an d 2 00 9 t ax y ears . W e h ol d t ha t h e is li ab le . See i nf ra p art2.a. (3 ) Whe th er Pa lm er i s l iabl e fo r th e se ct io n- 66 51 (a)( 2) ad di ti on to tax forth e 20 09 tax y ear. W e h ol d t ha t h e is li ab le . See i nf ra p art2.b . 2

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 1 Rev enue Co de ineffe ctforth e y ears at i ss ue . As d is cu ss edin fra p art2.b ., th e IRS ha s co nc ed edth atPal m er i s n otli ab le 2 fo r th e se c.-6 65 1( a)(2 ) ad di ti onto tax for20 08 .-3 -

[* 3] (4) Whe th er Pa lm er i s l iabl e fo r th e se ct io n- 66 54 (a) a dd it io n t o t ax for

th e 2 00 8 a nd20 09 tax y ears . W e h ol d t ha t h e is li ab le . See i nf ra p art 2.c . FINDINGS OF FACT So m e fac ts ha ve be enst ip ul at ed , andth ey are s o fo un d. Pa lm er re si de d i n Mi nn es ot a whe n h e fi le d t he pe ti ti on . There fo re, anap pe al of o urde ci si on inth is cas e wou ldgo to th e U.S. Co urt o f App eal s fo r th e Eig ht h C irc ui t u nl es s t he pa rti es st ip ul at e v enue inan ot he r ci rcu it . See s ec. 7 48 2( b) (1 ) an d (2 ). Pal m er wo rk edinMi nn eap ol is -St . Pau l, Mi nn es ot a, un ti l J ul y 20 08 . Fro m Apri l t o No ve m

be r 20 07 Pal m er l iv edina cab in he own edinW al ke r, Mi nn es ot a. The c ab in is ap pr ox im at el y 18 0 m il es no rth of M in ne ap ol is -St . Pau l. Fro m Decem be r 20 07 to Marc h 2 00 8 P al m er l iv edinBla in e, Mi nn es ot a, whi chis ap pr ox im at el y

15 m il es no rth of M in ne ap ol is -St . Pau l. Pal m er co nt in ue d to workinMi nn eap ol is -St . Pau l dur in g t ha t t im e. InApri l 2 00 8 P al m er m ov edfro m Bla in e b ackto hi s cabi n i n Walk er. Pal m er was st il l wo rk in g i n M in ne ap ol is -St . Pau l atth atti m e. InJu ly 200 8 P al m er b eg anwork in g a t M in ne so taHom e Zon e, In c. (“ Mi nn es ot a Hom e Zon e”), a m anuf actur er an d re ta il er o f ho m es an d m ob il e ho m es th atis be twee n t he cit ie s o f Cas s Lak e an d B em id ji, Mi nn es ot a. Cas s Lak e-4 -

[* 4] is ap pr ox im at el y

22 m il es no rth of Walk er. Bem id ji is ap pr ox im at el y

16 m il es no rth wes t o f Cas s Lak e. Whe n P al m er b eg anwork in g a t M in ne so taHom e Zon e, he was s ti ll li vi ng inhi s cabi n i n Walk er. The cab in is ap pr ox im at el y 50 m il es fro m

Mi nn es ot a Hom e Zon e. InAug us t 2 00 8 P al m er m arri eda wom anfro m So ut h C aro li na , referredto he re as Pal m er’s wif

e. Sh e li ve d wi th two so ns fro m a pr io r m arri ag e an d wi th he r m ot he r. Pal m er an d P al m er’s wif e b eg anpl an ni ng forhe r an d h er fa m il y to m ov e fro m So uth C aro li nato Mi nn es ot a. InOcto be r 20 08 Pal m er b ou gh t a n ew ho us e in Cas s Lak e. The h ou se was st il l u nd er co ns tru ct io n wh enhe bo ug htit . InOcto be r 20 08 Pal m er’s wif e m ov edfro m

So uth C aro li nato a cab in in W al ke r own edby Palm er’s s is te r. Pal m er’s wif e was acco m

pa ni edby her two so ns an d h er m ot he r. As p artof h is wife ’s m ov e inOcto be r 20 08 , Pal m er p ai d $3 ,15 7.8 1 t o m ov e a p orti on of h is wife ’s bel on gi ng s fr om So ut h C aro li nato hi s si st er’s cab in . Som e o f hi s wi fe’s b el on gi ng s re m ai ne d i n S ou th Caro li na . After hi s wi fe’s m ov e in Octo be r 20 08 , Pal m er co nt in ue d l iv in g i n h is cab in inW al ke r. Pal m er’s wif

e, he r two so ns , andhe r m ot he r li ve d i n P al m er’s s is te r’s cab in , whi ch was rig htne xtdo orto Pal m er’s cab in .-5 -

[* 5] InNov em

be r 20 08 Pal m er, Pal m er’s wif e, he r so ns , andhe r m ot he r m ov ed fro m th e two cab in s i n Walk er t o t he ne w ho us e in Cas s Lak e. InDecem be r 20 08 Pal m er m ov edm or e o f hi s wi fe’s b el on gi ng s fr om So ut h Caro li nato th e h ou se inCas s Lak e. Pal m er p ai d $ 3,3 22 .12 to m ov e th es e g oo ds . InFeb ru ary 20 09 Pal m er b eg anwork in g asec on d jo b, m an ag in g a McDo na ld ’s res taur an t. Fo r th is job Pal m er wo rk edpri m ari ly in Be m id ji. InJu ly 200 9 P al m er s to pp edwork in g a t M in ne so taHom e Zon e. InAug us t 2 00 9 P al m er s to pp edwork in g a t the McDo na ld ’s res taur an t. InSep te m

be r 20 09 Pal m er m ov edhi s wi fe’s rem ai ni ng be lo ng in gs fro m So ut h C aro li nato th e h ou se inCas s Lak e. InOcto be r 20 09 Pal m er b eg anwork in g fo r Farm Bu reauLife I ns ur an ce. Pal m er’s wif

e was no t em

pl oyed atan y

ti m e dur in g 2 00 8 o r 20 09 . In20 08 Pal m er re cei ve d $ 3,5 41 intax ab le wage s an d $ 17 ,97 5 i n t ax ab le no ne m pl oyee co m

pe ns at io n. Pa lm er’s 2 00 8 fe de ral -in co m e-t ax return was or ig in al ly due Apri l 1 5, 2 00 9, b utth e d ead li ne was e xt en de d t o Oct ob er 1 5, 2 00 9. In20 09 Pal m er re cei ve d $ 10 ,95 3 i n t ax ab le wage s an d $ 12 ,14 4 i n t ax ab le no ne m pl oyee co m

pe ns at io n. Pa lm er’s 2 00 9 fe de ral -in co m e-t ax return was or ig in al ly due Apri l 1 5, 2 01 0, b utth e d ead li ne was e xt en de d t o Oct ob er 1 5, 2 01 0.-6 -

[* 6] Pal m er d idno t fi le a fed eral -in co m e-t ax return fo r ei th er the 20 08 or t he 20 09 tax y ear. Pa lm er d idno t re ly on atax pro fes si on al for advi ce re ga rd in g h is fed eral in co m e ta x fo r ei th er the 20 08 or t he 20 09 tax y ear. Th e o nl y pa ym en ts of fed eral in co m e ta x t ha t Pa lm er m ad e fo r 20 08 or 2 00 9 wer e $ 54 9 o f fed eral in co m e ta x wi th he ldfro m hi s wag es in20 08 an d $ 94 of f ed eral in co m e ta x withh el d fr om

hi s wag es in20 09 . On Oct ob er 1 7, 2 01 1 t he IRS p rep areda subs ti tu te -fo r-re tu rnpu rs ua ntto se ct io n 6 02 0( b) forPal m er fo r th e 2 00 9 t ax y ear, s ho win g t ax of $ 80 ,64 8. Pa lm er fil eda fed eral -in co m e-t ax return fo r th e 2 00 7 t ax y ear, s ho win g t ax of $ 1,4 73 . The IRS d idno t p rep are asubs ti tu te -fo r-re turnforth e 2 00 8 t ax y ear. The cas e was tri edinSt. Paul , Min ne so ta . OPINION 1. Mo vi ng -Exp en se Dedu ct io ns Pal m er co nt en ds th athe is en ti tl edto de du ctth e ex pe ns es of m ov in g h is wife ’s bel on gi ng s fr om

So ut h C aro li nato Mi nn es ot a fro m th ree s ep arat e m ov es th atto okpl ace i n Oct ob er 2 00 8, Dec em be r 20 08 , andSep te m

be r 20 09 , res pe ct iv el y . The p art ie s h av e ag reedth atPal m er p ai d $ 3,1 57 .81 forth e fi rs t m ov e, i.e., fro m

So ut h C aro li nato W al ke r, Mi nn es ot a. The p art ie s h av e al so ag reedth atPal m er p ai d $ 3,3 22 .12 forth e se co ndm ov e, i.e., fro m So uth C aro li na-7 -

[* 7] to Cas s Lak e, Mi nn es ot a. Fo r th e th irdm ov e, i.e., fro m So ut h C aro li nato Cas s Lak e, Mi nn es ot a, Pal m er s eek s a d educ ti on of app ro xi m at el y $3 ,25 0. Th e IRS d is pu te s t he am ou ntpa idforth e th irdm ov e. Inad di ti on , th e IRS di sp ut es th e de du ct ib il it y

of t he ex pe ns es of a ny of th e th ree m ov es . Palm er h as th e b ur de n o f pr oo f reg ard in g a ll factua l i ss ue s u nd erl y in g t he de du ct ib il it y of t he m ov in g ex pe ns es . See Tax Ct. R. Pr ac. & Pr oc . 14 2( a) (g en eral ly im po si ng bu rd enof pr oo f ontax pa y er i n Tax Co urt p ro ceed in gs ); s ee al so sec . 74 91 (a)( 1) (if sp eci fic co nd it io ns are m et --n on e o f whi chPal m er m et --the bu rd enof p ro of is on th e IRS ). Sect io n 2 17 (a) a ll ows a de du ct io n fo r m ov in g e xp en se s p ai d o r in cu rred du rin g t he tax ab le y ear b y anin di vi du al tax pa y er i n c on ne ct io n wi th th e co m m en cem en t o f work b y

th e ta xp ay er as anem

pl oyee oras asel f-em

pl oyed in di vi du al at ane w pri nc ip al pl ace o f work. Se ct io n 2 17 (b )(1 ) de fin es “ m ov in g ex pe ns es ” as th e rea so nabl e expe ns es : (1 ) of m ov in g h ou se ho ldgo od s an d pe rs on al effe ct s fr om

th e ta xp ay er’s o ldres id en ce t o t he tax pay er’s n ew res id en ce, an d (2 ) of tra ve li ng fro m

th e ta xp ay er’s o ldres id en ce t o t he tax pa y er’s n ew res id en ce. The ol d re si de nc e fo r pu rp os es of s ect io n 2 17 is th e ta xp ay er’s pr in ci pa l re si de nc e b efo re the tax pa y er d ep art edforth e ta xp ay er’s n ew pr in ci pa l pl ace o f work. Se c. 1.2 17 -2 (b )(8 ), In co m e Tax Reg s. Th e n ew res id en ce fo r-8 -

[* 8] pu rp os es of s ect io n 2 17 is th e ta xp ay er’s p rin ci pa l re si de nc e withi n the ge ne ral lo cat io n o f th e ta xp ay er’s n ew pr in ci pa l p la ce o f work. Id . Exp en se s t ha t qua li fy

as “ m ov in g e xp en se s” un de r se ct io n 2 17 (b )(1 ) bu t ar e at tri bu tabl e to in di vi du al s o th er tha n t he tax pa y er an d a re p ai d o r in cu rredby the ta xp ay er ar e d educ ti bl e o nl y if the expe ns es sat is fy

sec ti on 21 7( b) (2 ). See s ec. 1.2 17 -2 (b )(1 0) , Inc om e Tax Reg s. Fo r su chanexpe ns e to sat is fy sec ti on 21 7( b) (2 ), th e o th er i nd iv idua l m us t: (1) be a m em

be r of th e ta xp ay er’s ho us eh ol d, (2 ) ha ve ha d a“pr in ci pa l p la ce o f ab od e” atth e ta xp ay er’s o ld res id en ce, an d (3 ) ha ve a “pr in ci pa l p la ce o f ab od e” atth e ta xp ay er’s n ew res id en ce. See sec . 21 7( b) (2 ); s ec. 1 .21 7- 2( b) (1 0) , Inc om e Tax Reg s. No d educ ti onis all owe d u nd er s ect io n 2 17 un le ss th e ta xp ay er’s n ew pr in ci pa l p la ce o f work i s atlea st50 m il es farthe r fro m th e ta xp ay er’s o ld res id en ce tha n was th e ta xp ay er’s o ldpri nc ip al pl ace o f work. Se c. 21 7( c)(1 )(A). The pa rti es ha ve ag reedth atinev al ua ti ng th e d educ ti bi li ty of Pal m er’s ex pe ns es to m ov e Pal m er’s wif e’s be lo ng in gs , we sh ou ldco ns id er tha t: (1 ) Pal m er’s o ldpri nc ip al pl ace o f work was inMi nn eap ol is -St . Pau l. (Th is is whe re Pa lm er wo rk edun ti l J ul y 20 08 .).-9 -

[* 9] (2) Pal m er’s n ew pr in ci pa l p la ce o f work i s M in ne so taHom e Zon e, whi ch is be twee n C as s Lak e an d B em id ji. (Mi nn es ot a Hom e Zon e is wher e Pal m er wo rk edfro m

Ju ly 200 8 t o J ul y

20 09 .). (3 ) Pal m er’s o ldres id en ce was inW al ke r. (Pal m er’s cab inis inW al ke r. He li ve d t he re fro m

Apri l t o No ve m

be r 20 08 .). (4 ) Pal m er’s n ew res id en ce i s i n C as s Lak e. (Cas s Lak e is th e lo cat io n o f th e ne w ho us e in to whi ch Pal m er m ov edinNov em be r 20 08 .). On the ba si s o f th e fi rs t thr ee ag reem en ts , we con cl ud e th atPal m er i s d is qu al ifi ed by the 50 -m il e te stfro m

de du ct in g a ny m ov in g e xp en se s. As expl ai ne d b efo re, the 50 -m il e te stis m etif t he tax pay er’s n ew pr in ci pa l p la ce o f work i s atlea st50 m il es fart he r fro m

th e ta xp ay er’s o ldres id en ce tha n was th e ta xp ay er’s o ldpri nc ip al pl ace o f work. Id . Palm er’s o ldres id en ce (Walk er) i s 1 80 m il es fro m hi s o ld pr in ci pa l p la ce o f work (M in ne ap ol is -St . Pau l) b uton ly 50 m il es fro m hi s n ew pr in ci pa l p la ce o f work (b etweenCas s Lak e an d B em id ji). His ne w pri nc ip al pl ace o f work i s n otfart he r fro m hi s o ldres id en ce tha n was hi s o ldpri nc ip al pl ace of work . Fu rth er, Pal m er i s n oten ti tl edto de du ctth e co stof m ov in g h ou se ho ldgo od s an d p ers on al effe ct s fr om So ut h C aro li na . Sou th Caro li nawas n othi s o ld res id en ce. The refo re, the ex pe ns es he see ks to de du ctform ov in g h ou se ho ld-1 0-

[* 10 ] go od s an d p ers on al effe ct s fr om So ut h C aro li naare n ot“ m ov in g e xp en se s” . See s ec. 2 17 (b )(1 ) (d efi ni ng “ m ov in g e xp en se s” as t he reas on ab le ex pe ns es “ of m ov in g h ou se ho ldgo od s an d p ers on al effe ct s fr om th e fo rm er [o ld ] res id en ce t o th e n ew res id en ce” a nd“ of trave li ng (in cl ud in g l od gi ng ) fro m th e fo rm er [o ld ] res id en ce t o t he ne w pl ace o f res id en ce”) . Add it io na ll y , th e expe ns es Pal m er s eek s t o d educ t ar e “ at tri bu tabl e” t o Pal m er’s wif

e. It was he r be lo ng in gs th atwere m ov ed , no t h is . There fo re, u nd er se ct io n 2 17 (b )(2 ) Pal m er’s wif e m us t h av e h ada “pr in ci pa l p la ce o f ab od e” i n Pal m er’s o ldres id en ce. Bec au se we ho ldth atth e ex pe ns es inqu es ti on are n ot de du ct ib le forothe r rea so ns , we nee d n otres ol ve whet he r Pal m er’s wif e h ada

“pr in ci pa l p la ce o f ab od e” i n P al m er’s o ldres id en ce o f W al ke r. See i d. Si m il arl y , we ne edno t re so lv e whe th er the ex pe ns es of m ov in g P al m er’s wif e’s be lo ng in gs were p ai d i n c on ne ct io n wi th Pal m er’s co m m en cem en t o f work a t h is ne w pr in ci pa l p la ce o f work. Se e se c. 21 7( a). W e h ol d t ha t the ex pe ns es th atPal m er p ai d t o m ov e h is wife ’s bel on gi ng s are n otde du ct ib le . 2. Add it io ns to Tax The IRS b ears th e b ur de n o f pr oduc ti on forad di ti on s t o t ax de te rm in ed un de r se ct io ns 66 51 (a)( 1) an d (2 ) an d 6 65 4( a). See sec . 74 91 (c). Th e IRS-1 1-

[* 11 ] sat is fie s i ts bu rd enof p ro du ct io n b y pro du ci ng su ffi ci en t ev id en ce es tabl is hi ng th atitis ap pr op ria te to im po se th e rel ev an t ad di ti on to tax . See Hig be e v . Comm is si on er, 1 16 T.C. 43 8, 4 46 -4 47 (20 01 ). Once th e IRS sat is fie s it s b ur de n o f pr oduc ti on , th e b ur de n o f pr oo f is on th e ta xp ay er t o s ho w th at im po si ng th e rel ev an t ad di ti on to tax is im pr op er. See id . at 4 47 , 44 9. a. Sect io n- 66 51 (a)( 1) Add it io n t o Tax forFai lu re To Tim el y Fil e Tax Returns The IRS d et erm in edth atPal m er i s l iabl e fo r th e se ct io n- 66 51 (a)( 1) ad di ti on to tax forth e 2 00 8 a nd20 09 tax y ears . Sect io n 6 65 1( a)(1 ) im po se s an ad di ti on to ta x fo r fai lu re t o fi le a ta x re turnby its fil in g d ead li ne (de te rm in edby tak in g i nt o acco un t an y

ex te ns io ns of tha t d ead li ne ) un le ss th e ta xp ay er ca n e st ab li sh th atth e fai lu re t o fi le is du e to reas on ab le cau se an d n otdu e to wil lfu l n eg le ct . The IRS s at is fie s i ts bu rd enof p ro du ct io n u nd er s ect io n 7 49 1( c) fo r th e se ct io n- 66 51 (a)( 1) ad di ti on to tax by pro du ci ng su ffi ci en t ev id en ce t o e st ab li sh th atth e ta xp ay er fa il edto ti m el y fil e a requi redfed eral -in co m e-t ax return. Se e Whe el er v . Comm is si on er, 1 27 T.C. 20 0, 2 07 -2 08 (20 06 ), aff’d, 5 21 F.3d12 89 (1 0t h C ir. 2 00 8) ; Hi gb ee v . Comm is si on er, 1 16 T.C. at 4 47 . The IR S d oe s n ot be ar the bu rd enof p ro of

forth e “ reas on ab le cau se ” ex cep ti on to th e se ct io n66 51 (a)( 1) ad di ti on to tax . See Hig be e v . Comm is si on er, 1 16 T.C. at 4 47 .-1 2-

[* 12 ] The sec ti on -6 65 1( a)(1 ) ad di ti on to tax is 5% o f th e am ou ntrequi redto be sh own as t ax on th e return fo r eac h m on th th e fai lu re t o fi le co nt in ue s, n otto ex ceed25 % inth e ag gr eg at e. Sec. 6 65 1( a)(1 ), (b )(1 ). 3 Pal m er was requi redto fil e fed eral -in co m e-t ax returns forbo th 20 08 an d 20 09 . Pal m er was ori gi na ll y requi redto fil e h is 20 08 fed eral -in co m e-t ax return 4 by April 15 , 20 09 , bu t thi s d ead li ne was e xt en de d t o Oct ob er 1 5, 2 00 9. Pa lm er was ori gi na ll y

requi redto fil e h is 20 09 fed eral -in co m e-t ax return b y Apri l 1 5, 20 10 , bu t thi s d ead li ne was e xt en de d t o Oct ob er 1 5, 2 01 0. Pa lm er h as st ip ul at ed th athe di d n otfil e a fed eral -in co m e-t ax return fo r ei th er 2 00 8 o r 20 09 . This is su ffi ci en t t o s at is fy

th e IRS ’s bu rd enof p ro du ci ng ev id en ce tha t i m po si ng th e ad di ti on to tax un de r se ct io n 6 65 1( a)(1 ) is ap pr op ria te forth e 2 00 8 and20 09 tax y ears . See, e.g ., Whe el er v . Comm is si on er, 1 27 T.C. at 2 07 -2 08 . Con se qu en tl y , The am ou ntrequi redto be sh own as t ax on th e return (wh ic h fo rm s the 3 ba si s o f th e se c.-6 65 1( a)(1 ) ad di ti on to tax ) is reduc edby certa in pa ym en ts an d cred it s, i nc lu di ng th e am ou ntof wa ge s wi th he ldforfed eral in co m e ta x. Se c. 66 51 (b )(1 ); s ee s ec. 3 1( a)(1 ). Thu s, i n i ts cal cu la ti on s i n t he no ti ces of d efi ci en cy is su edto Pal m er fo r 20 08 an d 2 00 9, the IRS re du cedth e am ou nt s re qu ire d t o b e sh own as t ax on th e returns for 20 08 an d 2 00 9 b y

th e am ou nt s o f wag es withh el d fo r eac h year. In20 08 Pal m er re cei ve d $ 3,5 41 intax ab le wage s an d $ 17 ,97 5 i n 4 no ne m pl oyee co m

pe ns at io n. In20 09 Pal m er re cei ve d $ 10 ,95 3 i n t ax ab le wage s an d $ 17 ,97 5 i n n on em

pl oyee co m

pe ns at io n. Acco rd in gl y , Pal m er ea rn edam ou nt s su ffi ci en t t o re qu ire hi m

to fil e fed eral -in co m e-t ax returns forth e 2 00 8 a nd20 09 ta x years. Se e se c. 1.6 01 2- 1( a), In co m e Tax Reg s.-1 3-

[* 13 ] Pal m er i s l iabl e fo r th e se ct io n- 66 51 (a)( 1) ad di ti onto tax forth e 2 00 8 a nd 20 09 tax y ears un le ss he co m es forwardwith e vi de nc e su ffi ci en t t o p ers ua de th e Co urt tha t h e h adreas on ab le cau se forhi s fa il ur e to fil e h is 20 08 an d 2 00 9 re tu rn s an d t ha t h is fai lu re t o fi le hi s 2 00 8 a nd20 09 returns was n otdu e to wil lfu l n eg le ct . See s ec. 6 65 1( a)(1 ); Hi gb ee v . Comm is si on er, 1 16 T.C. at 4 47 . Rea so nabl e cau se ex cu si ng a fai lu re t o t im el y fil e ex is ts if t he tax pa y er ex erci se d o rd in ary bu si ne ss care an d p ru de nc e b utne ve rth el es s was un ab le to fil e th e return b y

th e d ead li ne . See s ec. 3 01 .66 51 -1 (c)( 1) , Pro ced . & Adm in . Reg s. W il lfu l n eg le ctm ean s a c on sc io us , in te nt io na l fa il ur e o r rec kl es s i nd iff eren ce. Uni te d S ta te s v . Boyle, 4 69 U.S. 24 1, 2 45 (19 85 ). Pal m er co nt en ds th athi s fa il ur e to fil e h is fed eral -in co m e-t ax returns was due to reas on ab le cau se an d n otdu e to wil lfu l n eg le ctfor

th e fo ll owi ng reas on s. (1 ) Pal m er al le ge s tha t h e co ul d n otacce ss hi s 2 00 7 t ax reco rd s an d t ha t the se reco rd s wer e n eces sa ry

forhi m to fil e h is 20 08 return. Pa lm er al le ge s t ha t hi s 2 00 7 re co rd s wer e in ou ts id e st or ag e uni ts an d tha t the do or s t o t he se un it s wer e fro zenov er u nt il th e sp rin g o f 20 09 . Howev er, b ecau se of a n ex te ns io n, Pa lm er’s 2 00 8 re tu rnwas n otdu e unt il Octo be r 15 , 20 09 . Any ic e wou ldha ve m el te d b efo re Oct ob er 1 5, 2 00 9. Th us , th e ic e is no t a reas on ab le cau se forPal m er’s fai lu re t o fi le a ta x re tu rnon or b efo re-1 4-

[* 14 ] Octo be r 15 , 20 09 . See St ev en s B ro s. Fo un d. v . Comm is si on er, 3 9 T.C. 9 3, 13 0 (1 96 2) (“ [A]n acce pt ab le reas on forfai lu re t o fi le a return wi ll ex cu se su chfai lure o nl y

so lo ng as t he reas onrem ai ns va li d.” ), aff’d i n p art , rev ’d in pa rt o n a no th er i ss ue , 32 4 F .2d63 3 (8 th Cir . 19 63 ). Pal m er al so all eg es th athe was i nv ol ve d i n an o ng oi ng di sp ut e wit h t he own er o f th e st or ag e un it s. Ho wev er, the reco rddo es no t s ho w th atth e d is pu te pre ve nt edPal m er fro m acce ss in g t he st or ag e uni ts or t ha t Pa lm er ev enask edto acce ss th e un it s. Furth erm or e, Pal m er s ho ul d h av e ti m el y fil edhi s re turnwith t he be st av ai labl e in fo rm at io n, an d l at er, i f ne ces sa ry , fil edanam en de d re tu rn . See Est at e o f Vrin io ti s v . Comm is si on er, 7 9 T.C. 2 98 , 31 1 (1 98 2) . Thu s, Pal m er’s al le ge d i nabi li ty to ac ces s h is 20 07 reco rd s i s n otreas on ab le cau se fo r hi s fa il ur e to fil e h is 20 08 return. (2 ) Pal m er al le ge s tha t h e co ul d n otob ta in hi s wi fe’s rec or ds an d fo r th atreas on he co ul d n otfil e a joi ntreturn fo r 20 08 with h is wife . Howev er, Pal m er co ul d h av e fi le d areturn wi th th e b es t av ai labl e in fo rm at io n, an d l at er, i f ne ces sa ry , fil edanam en de d re tu rn . Or he co ul d h av e fi le d asep arat e return, wh ic h wo ul d h av e o bv ia te d t he ne edforreco rd s re ga rd in g h is wife ’s in co m e. See B el k v . Comm is si on er, 9 3 T.C. 4 34 , 44 7 (1 98 9) . Thu s, an y-1 5-

[* 15 ] in ab il it y

to ob ta in hi s wi fe’s rec or ds is no t re as on ab le cau se forhi s fa il ur e to fil e h is 20 08 return. (3 ) Pal m er al le ge s tha t h e was work in g e xc eed in gl y lo ng ho ur s. Ho wev er, Pal m er’s h eav y

work lo adis no t re as on ab le cau se forhi s fa il ur e to fil e a return. Se e Cro ck er v . Comm is si on er, 9 2 T.C. 8 99 , 91 3 (1 98 9) (ci ti ng Ode nd ’hal v. Co m

m is si on er, 8 0 T.C. 5 88 , 61 8 (1 98 3) , aff’d o n t hi s i ss ue , rem an de d o n o th er g ro un ds , 74 8 F .2d90 8 (4 th Cir . 19 84 )). If Pal m er h ad ex erci se d o rd in ary bu si ne ss care an d p ru de nc e, he wou ldno t h av e take n o n a workl oa d t ha t wo ul d h av e in te rfer edwith h is ab il ity to ful fil l h is leg al ob li ga ti on to fil e h is fed eral -in co m e-t ax return. Se e id . (ci ti ng Dus ti n v . Co m m is si on er, 5 3 T.C. 4 91 , 50 7 (1 96 9) , aff’d, 4 67 F.2d47 (9t h C ir. 1 97 2) ). Pal m er’s h eav y

work lo adis no t re as on ab le cau se forhi s fa il ur e to fil e h is 20 08 return. (4 ) Pal m er al le ge s tha t h e st art edha vi ng do m es ti c p ro bl em s wi th hi s wi fe i n Aug us t 2 01 1. Bu t thi s was lo ng aft er the du e d at es forhi s 2 00 8 a nd20 09 returns (Oct ob er 1 5, 2 00 9 a nd20 10 , res pe ct iv el y ). Ther efo re the se pr ob le m s co ul d n otha ve cau se d h is fai lu re t o fi le hi s 2 00 8 a nd20 09 returns . See Es ta te of Hi nz v. Co m m is si on er, T.C. Mem o. 2 00 0- 6, 7 9 T.C.M . (CCH) 12 89 , 13 05 (20 00 ) (h ol di ng th atth e es ta te ’s fai lu re t o t im el y fil e th e return-1 6-

[* 16 ] was n otcau se d b y

th e es ta te lawyer’ s erro ne ou s ad vi ce ab ou t the du e d at e whe n: (1) est at e-t ax return was du e Aug us t 4 , 19 93 , (2) sh ortl y be fo re Feb ru ary 4, 1 99 4, l on g a fte r th e due da te ha d p as se d, the est at e’s la wy er erro ne ou sl y

advi se d the ex ecu to r th atth e due da te was Fe brua ry 4, 1 99 4, an d (3 ) th e ex ecu to r fi le d t he return o n F eb ru ary 4, 1 99 4) . (5 ) Fi na ll y , Pal m er al le ge s t ha t h e co ul d n otfil e h is 20 09 return b ecau se he ne ed edin fo rm at io n fr om hi s 2 00 8 re tu rnan d t he refo re h e n eed edto fil e h is 20 08 return b efo re fi li ng hi s 2 00 9 re tu rn . Butas p rev io us ly dis cu ss ed , we do no t fi ndth atPal m er h adreas on ab le cau se forhi s fa il ur e to fil e h is 20 08 return. Ad di ti on al ly, th e la ckof i nf orm at io n re la ti ng to 20 08 is no ex cu se fo r fai li ng to fil e h is 20 09 return. He co ul d h av e fi le d areturn fo r 20 09 on orbe fo re the de ad li ne with t he be stav ai labl e in fo rm at io n, an d l at er, i f ne ces sa ry , fil edanam en de d re tu rn . See Est at e o f Vrin io ti s v . Co m m is si on er, 7 9 T.C. at31 1. Th e una va il ab il it y of P al m er’s 2 00 8 re tu rn is no t re as on ab le cau se forhi s fa il ur e to fil e h is 20 09 return. Pal m er h as no t p ro ve n t ha t h e h adreas on ab le cau se forhi s fa il ur e to fil e ei th er h is 20 08 or 2 00 9 fe de ral -in co m e-t ax return.-1 7-

[* 17 ] Acco rd in gl y , we ho ldth atPal m er i s l iabl e fo r th e se ct io n- 66 51 (a)( 1) ad di ti on to tax forth e 2 00 8 an d 2 00 9 t ax y ears . 5 b. Sect io n- 66 51 (a)( 2) Add it io n t o Tax forFai lu re To Tim el y Pay Tax The IRS al so de te rm in edth atPal m er i s l iabl e fo r th e se ct io n- 66 51 (a)( 2) ad di ti on to tax forth e 2 00 9 t ax y ear. Se ct io n 6 65 1( a)(2 ) im po se s an ad di ti on to ta x fo r fai lu re t o p ay

th e am ou ntsh own as t ax ona return o n o r be fo re the du e da te un le ss th e ta xp ay er ca n e st ab li sh th atth e fai lu re i s due to reas on ab le cau se 6 an d n otdu e to wil lfu l n eg le ct . Sect io n 6 65 1( a)(2 ) pr ov id es th atth e ad di ti onto tax is cal cu la te d a s 0 .5% o f th e am ou ntsh own as t ax on th e ta x re tu rn , with a n ad di ti on al 0.5 % foreach ad di ti on al m on th or f ract io n t he reo f du rin g wh ic h t he fai lu re t o p ay

co nt in ue s, up t o am ax im um of 2 5%. Sec ti on 66 51 (b )(2 ) pr ov id es th atth e am ou ntof t ax sh own on th e return s ha ll , forpurp os es of c om pu ti ng th e ad di ti on foran y

m on th , be r educ edby the am ou ntof a ny partof t he tax pa idon or be fo re the be gi nn in g o f th e m on th an d b y th e am ou ntof a ny cred itag ai ns t the tax The IRS co nc ed edth atPal m er i s n otli ab le forth e se c.-6 65 1( a)(2 ) ad di ti on 5 to tax for20 08 . Accor di ng ly, se c.-6 65 1( c)(1 ), whi chis di sc us se d i nf ra n ot e 9 , do es no t re du ce the sec .-66 51 (a)( 1) ad di ti on to tax forth e 2 00 8 t ax y ear. Unl es s ex te nd ed , see sec . 61 61 (a), the du e d at e o f a t ax pay m en t i s 6 ge ne ral ly the da te on whi ch th e return i s re qu ire d t o b e fi le d. Se e se c. 61 51 (a). Pal m er d idno t re cei ve anex te ns io n o f ti m e to pay th e ta x. Ex te ns io ns of t im e to fil e a return d o n otex te ndth e due da te forpa ym en t. See id . Palm er’s t ax pa ym en t fo r th e 2 00 9 t ax y ear was du e o n Ap ril 15 , 20 10 . See s ec. 6 15 1.-1 8-

[* 18 ] whi chm ay

be cla im edon th e return. Se ct io n 6 65 1( c)(2 ) pr ov id es th atif t he am ou ntrequi redto be sh own as t ax on th e return i s l es s t ha n t he actua l am ou nt sh own as t ax on th e return, the n b ot h s ect io n 6 65 1( a)(2 ) an d (b )(2 ) are ap pl ie d b y subs ti tu ti ng th is lo wer am ou nt .

i. Am ou ntThatPal m er Fa il edTo Pay Fo r pu rp os es of s ect io n 6 65 1( a)(2 ), a ta xp ay er’s return i nc lu de s ei th er a return fi le d b y

th e ta xp ay er o r a s ub st itut e-fo r-re tu rnpre paredby the IRS u nd er se ct io n 6 02 0( b) . See s ec. 6 65 1( g) (2 ); C ab ira c v . Commis si on er, 1 20 T.C. 16 3, 17 0 (2 00 3) . Palm er d idno t fi le a fed eral -in co m e-t ax return fo r th e 2 00 9 t ax y ear. Howev er, the IRS p rep areda subs ti tu te -fo r-re tu rnfor Pal m er fo r th e 2 00 9 t ax y ear. Th e IRS in tro du cedth is subs ti tu te -fo r-re tu rnin to ev id en ce, an d i t s at is fie s th e requi rem en ts of s ect io n 6 02 0( b) . There fo re, the subs ti tu te -fo r-re tu rnqu al ifi es 7 as Pal m er’s 2 00 9 re tu rnforpu rp os es of s ect io n 6 65 1( a)(2 ). See s ec. 6 65 1( g) (2 ); Cab ira c v . Comm is si on er, 1 20 T.C. at 1 70 . The am ou ntsh ownas t ax on th e subs ti tu te -fo r-re tu rnpre paredforPal m er fo r th e 2 00 9 t ax y ear was $8 0,6 48 .

A do cu m en t o r se t o f do cu m en ts si gn edby an au th or iz edIRS o ffi ci al or 7 em pl oyee is a return fo r pu rp os es of s ec. 6 02 0( b) if the do cu m en t(s ): (1 ) id en ti fie s th e ta xp ay er b y

na m e an d t ax pa y er-i de nt ifi cat io n num be r; ( 2) co nt ai ns su ffi ci en t in fo rm at io n t o c om

pu te th e ta xp ay er’s t ax li ab il it y ; an d (3 ) pu rp orts to be a return. Sec. 3 01 .60 20 -1 (b )(2 ), Pro ced . & Adm in . Reg s.-1 9-

[* 19 ] Becaus e o f a co nc es si on m ad e b y th e IRS , th e co rrec t am ou ntof t ax is les s

8 th anth e am ou ntori gi na ll y de te rm in edby the IRS i n t he no ti ce o f de fic ie nc y an d sh own as t ax on th e subs ti tu te -fo r-re tu rn . Accor di ng ly, th e co rrec t am ou ntof t ax , in st eadof t he actua l am ou ntsh own as t ax on th e subs ti tu te -fo r-re tu rn , is us edto cal cu la te th e se ct io n- 66 51 (a)( 2) ad di ti on to tax . See s ec. 6 65 1( c)(2 ). The co rrec t am ou ntof t ax wil l b e d et erm in edby the Co urt af te r th e p art ie s s ub m it co m pu ta ti on s u nd er Tax Co urt Ru le of P ract ic e & Pro cedur e 1 55 . The o nl y pa ym en t o f th e ta x P al m er m ad e o r cre di t ag ai ns t the tax th athe cancla im is th e $9 4 wi th he ldfro m

hi s wag es . Am ou nt s wi th he ldfro m wage s ar e al lo wab le as a cred itag ai ns t t ax un de r se ct io n 3 1( a)(1 ). If th e co rrec t am ou ntof t ax is a po si ti ve nu m be r (aft er the $9 4 re du ct io n re qu ire d b y sec ti on 66 51 (b )(2 )), th enth e IRS ha s sa ti sf ie d i ts bu rd enof p ro du ct io n u nd er s ect io n 7 49 1( c) tha t i t i s ap pr op ria te to im po se th e se ct io n- 66 51 (a)( 2) ad di ti on to tax . See J am es v. Co m m is si on er, T.C. Mem o. 1 98 0- 99 , 40 T.C.M. (CCH) 4 5, 5 5 (1 98 0) (“ Co ns eque nt ly, if t he re i s n o am ou ntrequi redto be sh own as t ax on th e return (a s i n s om e cas es of e xc es s withh ol di ng s, es ti m at edtax pa ym en ts , or n etop erat in g l os s ca rry ov ers ), th enth ere can be no pe na lt y . * * * Th is is no t the cas e h ere. Th e co rrec te d t ax li ab il it y The IRS co nc ed edth atPal m er was no t re qu ire d t o re co gn iz e g ai n o n t he 8 sa le of r eal est at e.-2 0-

[* 20 ] ex ceed s t he co m

bi ne d wi th ho ld in gs inbo th tax ab le y ears 19 69 an d 1 97 0. Su chex ces s i s t he am ou ntrequi redto be sh own as t ax on th e return a ndsubjec t t o th e se ct io n 6 65 1( a)(1 ) pe na lty .” (ci ta ti on om it te d.)) ; cf . Mis ch el v. Co m

m is si on er, T.C. Mem o. 1 99 7- 35 0, 7 4 T.C.M . (CCH) 2 53 , 25 7 (1 99 7) .

ii . Rea so nabl e Cau se The IRS d oe s n otbe ar the bu rd enof p ro of for th e “ reas on ab le cau se ” ex cep ti on to th e se ct io n- 66 51 (a)( 2) ad di ti onto tax . Hig be e v . Comm is si on er, 1 16 T.C. at 4 47 . Palm er i s re qu ire d t o c om e fo rwardwith e vi de nc e su ffi ci en t t o pe rs ua de th e Co urt tha t h e h adreas on ab le cau se for hi s fa il ur e to pa y

th e co rrec t am ou ntof t ax for20 09 (aft er the $9 4 re du ct io n) an d t ha t h is fai lu re t o d o s o was no t due to wil lfu l n eg le ct . See i d. Re as on ab le cau se ex cu si ng a fai lu re t o p ay ex is ts if t he tax pa y er ex erci se d o rd in ary bu si ne ss care an d p ru de nc e in pro vi di ng fo r pa ym en t o f th e ta x a ndwas n ev erthe le ss eit he r un ab le to pa y th e ta x o r wou ld ha ve su ffer edanun du e h ard sh ip if h e o r sh e h adpa idth e ta x o n t he du e d at e. Sec. 30 1.6 65 1- 1( c)(1 ), Pro ced . & Adm in . Reg s.; see als o Do wni ng v. Co m m is si on er, 11 8 T.C. 2 2, 2 8 (2 00 2) (ci ti ng sec ti on 30 1.6 65 1- 1( c)(1 ), Pro ced . & Adm in . Reg s.). An “ un du e h ard sh ip ” m ean s m or e th ananin co nv en ie nc e; rathe r, an“un du e ha rd sh ip ” wou ldex is t i f th e ta xp ay er wo ul d s uf fer asubs ta nt ia l fi nanc ia l l os s i f he orsh e h adto m ak e th e ta x p aym en t o n i ts du e d at e. See s ec. 1 .61 61 -1 (b ), In co m e-2 1-

[* 21 ] Tax R eg s. Pal m er d idno t i nt ro du ce an y ev id en ce tha t h e was un ab le to pa y th e ta x o r th athe wou ldha ve su ffer edun du e h ard sh ip if h e h adpa idth e ta x o n t he du e d at e. Thu s, Pa lm er h as no t s ho wn tha t h is fai lu re t o p ay th e co rrec t am ou ntof ta x fo r 20 09 was due to reas on ab le cau se an d n otdu e to wil lfu l n eg le ct . Acco rd in gl y , we ho ldth atPal m er i s l iabl e fo r th e se ct io n- 66 51 (a)( 2) ad di ti on to tax forth e 2 00 9 t ax y ear, subjec t t o p os t-o pi ni on co m pu ta ti on s u nd er 9 Tax Co urt Ru le of P ract ic e an d P ro cedur e 1 55 co nf irming th atth e co rrec t am ou nt of tax for20 09 is a po si ti ve nu m be r (aft er ap pl ic at io n o f se ct io n 6 65 1( b) (2 )). c. Sect io n- 66 54 (a) Ad di ti on to Tax fo r Fai lu re To Pay Est im at edTax The IRS al so de te rm in edth atPal m er i s l iabl e fo r th e se ct io n- 66 54 (a) ad di ti on to tax forth e 2 00 8 a nd20 09 tax y ears . Sect io n 6 65 4( a) i m po se s an ad di ti on to tax on anin di vi du al tax pa y er wh o u nd erp ay s atlea ston e o f fo ur requi redin st al lm en ts of e st im at edtax . Sec. 6 65 4( a), (b ), an d (c ). Eachrequi red in st al lm en t i s equa l t o 2 5% o f th e “ requi redan nu al pa ym en t” . Sec. 6 65 4( d) (1 )(A). The requi redannu al pa ym en t i s equa l t o the les se r of : (1 ) 90 % of t he tax sh own on th e in di vi du al ’s return fo r th e ta x year in qu es ti on (or , if n o re tu rnis fil ed , 90 % W e h ol d tha t Pa lm er i s l iabl e fo r bo th th e se c.-6 65 1( a)(1 ) ad di ti on to tax , 9 se e supr a p art2.a., an d t he sec .-66 51 (a)( 2) ad di ti onto tax for th e 2 00 9 t ax y ear. The am ou ntof t he sec .-66 51 (a)( 1) ad di ti on to tax m us t b e reduc edby the am ou nt of th e se c.-6 65 1( a)(2 ) ad di ti on to tax forth e m on th s fo r whi chbo th ad di ti on s t o ta x app ly. Sec. 6 65 1( c)(1 ).-2 2-

[* 22 ] of t he co rrec t t ax forsu ch y ear) , or (2 ) if th e in di vi du al fil eda return fo r th e imm ed ia te ly prece di ng tax y ear, 1 00 % of t he tax sh ownon th atreturn. Se c. 66 54 (d )(1 )(B) . The due da te s o f th e requi redin st al lm en ts fora cal en da r-y ear ta xp ay er l ik e Pal m er ar e Apr il 15 , Ju ne 15 , andSep te m be r 15 of the cal en dar y ear in qu es ti on an d J anua ry

15 of t he fol lo win g year. Sec. 6 65 4( c)(2 ). The sec ti on -6 65 4( a) ad di ti on to tax is de te rm in edby app lying th e un de rp aym en t ra te est ab li sh edun de r se ct io n 6 62 1 t o t he am ou ntof t he un de rp aym en t fo r th e p eri odof t he un de rp aym en t. Sec . 66 54 (a)( 1) . The am ou nt of th e und erp aym en t i s t he ex ces s o f th e requi redin st al lm en t o ve r th e am ou nt , if an y , of t he in st al lm en t p ai d o n o r be fo re the du e d at e fo r th e in st al lm en t. Sec . 66 54 (b )(1 ). The p eri odof the un de rp aym en t ru ns fro m th e due da te forth e in st al lm en t t o the earl ie r of th e 1 5t h d ay

of the 4th m on th fol lo win g t he clo se of th e ta xabl e y ear ( i.e., Ap ril 15 , 20 09 , forPal m er’s 2 00 8 t ax y ear a ndApri l 1 5, 20 10 , forPal m er’s 2 00 9 t ax y ear) or f oran y po rti on of t he un de rp aym en t, the da te on whi chsu ch po rti on is pa id . Sec. 6 65 4( b) (2 ). Fo r pu rp os es of s ect io n 6 65 4, wag e-wi th ho ld in g c red it s ar e tr eat edas pa ym en ts of e st im at edtax . See s ec. 6 65 4( g) (1 ). The amoun t o f wag es withh el d fo r eac h t ax y ear i s t reat edas apa ym en t o f es ti m at edtax forth aty ear, an d o ne fo urth of t hi s amoun t i s t reat edas p ai d o n e ach of t he fou r es ti m at ed -ta x re qu ire d--2 3-

[* 23 ] in st al lm en t due da te s fo r th attax y ear, u nl es s t he tax pa y er es tabl is he s t he da te s o n wh ic h a ll am ou nt s wer e actua ll y withh el d. Se e id . To s at is fy it s b ur de n o f pr oduc ti on un de r se ct io n 7 49 1( c) fo r th e se ct io n66 54 (a) a dd it io n t o t ax , th e IRS m us t p ro du ce ev id en ce es tabl is hi ng th atth e ta xp ay er h ada “ requi redan nu al pa ym en t” as d efi ne d i n s ect io n 6 65 4( d) (1 )(B) . Whe el er v . Comm is si on er, 1 27 T.C. at 2 11 -2 12 . Fo r th e 2 00 8 t ax y ear t he reco rdsh ows th atPal m er h ada “ requi redan nu al pa ym en t” . He fil eda fed eral -in co m e-t ax return fo r th e 2 00 7 t ax y ear. Hi s re tu rn fo r 20 07 sh owe d atax of $ 1,4 73 . He di d n otfil e a fed eral -in co m e-t ax return fo r th e 2 00 8 t ax y ear. Th eref or e, hi s “ requi redannu al pa ym en t” for 20 08 is equa l t o th e le ss er o f: (1 ) 90 % of h is co rrec t t ax for20 08 , see sec . 66 54 (d )(1 )(B) (i) , or (2 ) 10 0% o f th e ta x s ho wn o n h is 20 07 return (i .e., $1 ,47 3) , see sec . 66 54 (d )(1 )(B) (ii ). The fir stam ou nt --9 0% o f hi s co rrec t t ax for20 08 --wi ll be de te rm in edinpo st op in io n c om

pu ta ti on s u nd er Tax Co urt Ru le of P ract ic e an d P ro cedur e 1 55 . Each of th e fo urrequi redin st al lm en ts is on e-fo urth of t he “ requi redan nu al pa ym en t” am ou ntth atwil l b e d eri ve d fr om th es e co m

pu ta ti on s. See sec . 66 54 (d )(1 )(A). Pal m er h ad$5 49 of f

ed eral in co m e ta x wi th he ldfro m hi s wag es in20 08 . He has no t es tabl is he d t he da te s o n wh ic h t he se am ou nt s wer e actua ll y withh el d. Acco rd in gl y , on e-fo urth of t he $5 49 , or $ 13 7.2 5, i s d eem edto be a pa ym en t o f-2 4-

[* 24 ] est im at edtax pa idon each of t he fou r du e d at es of t he requi redin st al lm en ts fo r th e 2 00 8 t ax y ear. Se e se c. 66 54 (g )(1 ). Pal m er m ad e n o o th er p aym en ts of es ti m at edtax forth e 2 00 8 t ax y ear. Th e IRS ha s s at is fie d i ts bu rd enof p ro du ci ng ev id en ce tha t i m

po si ng th e se ct io n 6 65 4( a) ad di ti on to tax is ap pr op ria te for th e 20 08 tax y ear i f po st -o pi ni on co m pu ta ti on s co nf

irm th atth e $ 13 7.2 5 d eem ed pa ym en t i s l es s tha n e ach requi redin st al lm en t. See McLai ne v. Co m m is si on er, 13 8 T.C. 2 28 , 24 9 (2 01 2) (“ Bec au se (1) res po nd en t’s Fo rm 43 40 forpe ti ti on er fo r 19 99 sh ows no pa ym en ts of t ax for19 99 un ti l J ul y 17 an d Oct ob er 2 2, 2 00 1, an d (2 ) pe ti ti on er s ho weda subs ta nt ia l t ax li ab il it y on hi s p rio r y ear ( 19 98 ) return (fac ts est ab li sh in g t ha t p et it io ne r ha d a‘ requi redannu al pa y m en t’ for19 99 withi n th e m ean in g o f se ct io n 6 65 4( d) (1 )(B) ), we fin d t ha t re sp on de ntha s s at is fie d h is bu rd enof p ro du ct io n u nd er s ect io n 7 49 1( c).”) . Fo r th e 2 00 9 t ax y ear t he reco rdsh ows th atPal m er h ada “ requi redan nu al pa ym en t” . Palm er d idno t fi le a return fo r 20 08 or 2 00 9. Pa lm er’s “ requi red an nu al pa ym en t” for20 09 was t he refo re 9 0% o f hi s co rrec t t ax for20 09 . See s ec. 66 54 (d )(1 )(B) (i) (fl us h l an gu ag e). Thi s amoun t wi ll als o b e d et erm in edinpo st op in io n c om

pu ta ti on s u nd er Tax Co urt Ru le of P ract ic e an d P ro cedur e 1 55 . Each of th e fo urrequi redin st al lm en ts is on e-fo urth of t he “ requi redan nu al pa ym en t” am ou nt . See s ec. 6 65 4( d) (1 )(A). Pal m er h ad$9 4 o f fed eral in co m e ta x wi th he ld-2 5-

[* 25 ] fro m

hi s wag es in20 09 . Palm er h as no t es tabl is he d t he da te s o n wh ic h t he se am ou nt s wer e actua ll y

withh el d. Acco rd in gl y , on e-fo urthof t he $9 4, o r $2 3.5 0, i s de em edto be a pa ym en t o f es ti m at edtax pa idon each of t he fou r du e d at es forth e 20 09 tax y ear. Se e se c. 66 54 (g )(1 ). Pal m er m ad e n o o th er p aym en ts of e st im at ed ta x fo r 20 09 . The IR S h as sat is fie d i ts bu rd enof p ro du ci ng ev id en ce tha t im po si ng th e se ct io n 6 65 4( a) ad di ti on to tax is ap pr op ria te forth e 2 00 9 t ax y ear i f po st -o pi ni on co m

pu ta ti on s co nf

irm th atth e $ 23 .50 de em edpa ym en t i s l es s tha n each requi redin st al lm en t. See McLai ne v. Co m m is si on er, 1 38 T.C. at 2 49 . The sec ti on -6 65 4( a) ad di ti on to tax is m an da to ry un le ss th e ta xp ay er es tabl is he s t ha t o ne of t he ex cep ti on s l is te d i n s ect io n 6 65 4( e) ap pl ie s. See Rec kl it is v. Co m

m is si on er, 9 1 T.C. 8 74 , 91 3 (1 98 8) (ci ti ng Gros sh an dl er v . Co m m is si on er, 7 5 T.C. 1 , 20 -2 1 (1 98 0) ). Ther e is no ge ne ral ex cep ti on to th e se ct io n- 66 54 (a) a dd it io n t o t ax rel at in g t o re as on ab le cau se an d l ackof wi ll fu l ne gl ect . See Gro ss ha nd le r v. C omm is si on er, 7 5 T.C. at21 (ci ti ng Est at e o f Rube n v. Co m m is si on er, 3 3 T.C. 1 07 1, 1 07 2 (1 96 0) ); c f. se c. 66 54 (e)( 3) (B)( ii ). Pal m er do es no t co nt en d, n or

do es th e rec or d s ho w, th atan y of t he ex cep ti on s u nd er se ct io n 6 65 4( e) ap pl ie s.-2 6-

[* 26 ] Acco rd in gl y , we ho ldth atPal m er i s l iabl e fo r th e se ct io n- 66 54 (a) a dd it io n to tax forth e 2 00 8 a nd20 09 tax y ears , subjec t t o p os t-o pi ni on co m pu ta ti on s u nd er Tax Co urt Ru le of P ract ic e an d P ro cedur e 1 55 . Inreac hi ng ou r ho ld in gs , we hav e co ns id eredall arg um en ts m ad e, an d, t o th e ex te ntno t m en ti on ed , we con cl ud e th atth ey are m oo t, i rrel ev an t, o r witho ut m eri t. To re fle ctth e fo reg oi ng , Deci si on wil l b e en te redun de r Tax Co urt Ru le of P ract ic e an d Pro cedur e 1 55 .