T.C. Memo. 1998-60

UNITED STATES TAX COURT

CHRIS E. COLUMBUS, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 24738-96. Filed February 12, 1998. 

Chris E. Columbus, pro se.

Donald E. Edwards, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

WHALEN, Judge: Petitioner did not file a return for

any of the years in issue. Based upon information reported

to the Internal Revenue Service, respondent computed

petitioner's tax and determined the following deficiencies

in and additions to petitioner's income tax:
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 Additions to Tax 

Year Deficiency Sec. 6651(a)(1) Sec. 6654

1992 $9,245 $1,415 $230

1993 10,896 1,432 216

1994 11,708 1,509 281

The above tax deficiencies do not reflect the fact that

income tax had been withheld from petitioner's wages in the

amount of $3,584 in 1992, $5,167 in 1993, and $5,672 in

1994. Thus, according to the notice of deficiency, the

"net additional tax" due from petitioner in 1992, 1993,

and 1994 is $5,661, $5,729, and $6,036, respectively. 

The issues for decision are: (1) Whether petitioner

should be allowed the filing status of married filing

jointly, rather than single; (2) whether petitioner is

entitled to five or six personal exemptions; (3) whether

petitioner realized gain from the sale of stock of his

employer, American Airlines, Inc.; (4) whether petitioner

is entitled to collect $17,732.46 in "damages" from the

Internal Revenue Service and whether petitioner can deduct

$9,000 per year for "the impact the events created on his

ability to earn income, both past, present and future 

* * * in additional to any deductions that are otherwise

authorized,"; and (5) whether petitioner is liable for

the addition to tax under section 6651(a)(1) for failure
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to file a tax return or the addition to tax under section

6654 for failure to pay estimated income tax. Unless

stated otherwise, all section references are to the

Internal Revenue Code as in effect during the years in

issue.

FINDINGS OF FACT

The parties have stipulated some of the facts. The

stipulation of facts filed by the parties and the sole

exhibit attached thereto are incorporated herein by this

reference. Petitioner was a resident of Tulsa, Oklahoma,

at the time he filed his petition in this case. 

Petitioner married Sueko Miyasato on February 3, 1971,

in Okinawa, Japan. The couple had four children, Angie

Columbus, Brian Columbus, Christopher Columbus, and

Elizabeth Columbus. At the time the petition was filed in

this case, petitioner was employed by American Airlines,

Inc. During 1992, 1993, and 1994, he received $34,647,

$40,327, and $43,736, respectively, in wages from American

Airlines. Petitioner was formerly a member of the U.S.

Marine Corps. During 1992, 1993, and 1994, he received

$13,154, $13,547, and $13,801, respectively, in taxable

retirement income from the U.S. Marine Corps. 
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During the years in issue, petitioner made monthly

contributions to an employee stock purchase plan provided

by his employer. Petitioner's contributions were used to

purchase stock in American Airlines. During 1992, 1993,

and 1994, petitioner realized $1,039, $1,327, and $1,022,

respectively, from the sale of American Airlines stock. 

Petitioner received $10, $40, and $59 of interest income

in 1992, 1993, and 1994, respectively.

Sometime in January 1988, petitioner was transferred

by his employer from Oakland, California, to Tulsa,

Oklahoma. In August 1988, petitioner's oldest daughter,

Angie Columbus, was separated from petitioner and the other

members of his family and was taken back to California and

placed in foster care. It appears that this action was

taken pursuant to an order of a juvenile court in

California, but the record of the instant case does not

contain that order or explain the reason for the juvenile

court's action.

On or about October 23, 1989, the Superior Court of

California for the County of Alameda entered a default

judgment and order which directed petitioner and his wife

to pay $308 per month for the support and maintenance of

Angie Columbus. The default judgment also found petitioner

and his wife indebted to the County of Alameda in the sum
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of $5,162 "as and for Aid to Families with Dependent

Children Public Assistance paid" on petitioner's behalf

from December 1987 to January 1988, and from August 1988 to

October 31, 1989. In addition to requiring petitioner and

his wife to pay $308 per month, the State court directed

them to pay $25 per month to liquidate the judgment. The

default judgment and order further directed that the total

of those amounts, $333 per month, "be assigned from the

wages or salary" of petitioner and paid to the Treasurer

of Alameda County, together with attorney's fees of $300

and costs of $25. The default judgment and order states

as follows:

THAT the County of Alameda may intercept

Defendant's California Franchise Tax Board

and Internal Revenue Service refunds and/or

Unemployment Insurance Benefits to collect

any existing or future arrears or reimbursement owing to the County of Alameda. 

Pursuant to the above order, petitioner's employer,

American Airlines, deducted $333 per month from

petitioner's wages. The Office of the District Attorney,

Alameda County, California, sent petitioner and his wife 

a "child support warning notice" dated October 22, 1991. 

The notice states as follows:
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As of 08/31/91, you owe $5,103, in past due

support while your child(ren) received public

assistance. The Internal Revenue Service (IRS)

and/or the State Franchise Tax Board (FTB) will

be authorized to deduct this past due amount from

your individual or joint income tax refund. This

action is authorized by: Title 42 United States

Code Sections 664 and 666, Title 45 of the Code

of Federal Regulations, Sections 303.72 and

303.102, and California Government Code Section

12419.5.

Petitioner's daughter, Angie Columbus, reached the age

of 19 before December 31, 1992. 

On January 25, 1993, January 3, 1994, and May 21,

1994, representatives of the Office of the District

Attorney, Family Support Division, Alameda County,

California, wrote to petitioner about his obligation to

pay support for his eldest daughter. All three letters

contain the following:

RE: Sueko Columbus -vs- Chris E. Columbus

FSD No.: 688797-A (ENF)

The Office of the District Attorney, Family Support

Division, Alameda County, California, also wrote to

petitioner's employer on May 21, 1994, directing the

payroll manager to cease deducting child support in the

amount of $333 per month from petitioner's wages. 
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OPINION

First, petitioner complains that the deficiencies

determined by respondent for 1992, 1993, and 1994 are based

on the erroneous assumption that petitioner is single,

rather than a married individual filing joint returns. 

In effect, petitioner complains that for each of the years

in issue, respondent computed his tax liability using the

rates, set forth in section 1(c), which are applicable to

unmarried individuals. Petitioner notes that the rates

used by respondent are higher than the rates set forth in

section 1(a), which are applicable to married individuals

filing joint returns. In passing, we note that neither

respondent nor petitioner contends that petitioner's tax

liability should be computed using the rates, set forth in

section 1(d), which are applicable to married individuals

filing separate returns.

In order to be eligible to compute tax using the joint

return rates prescribed by section 1(a), the taxpayer must

be a married individual who makes a joint return with his

spouse under section 6013, or the taxpayer must be a surviving spouse. Sec. 1(a). Petitioner is not a surviving

spouse. Therefore, in order for petitioner to be eligible

to compute his tax for 1992, 1993, or 1994 using joint
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return rates, he must make a joint return with his spouse

for the year. 

The parties stipulated that "petitioner is entitled

to married filing joint status if he and his spouse file

a joint return." This is true even in the case of a

delinquent return. See generally Millsap v. Commissioner,

91 T.C. 926, 929 (1988); Phillips v. Commissioner, 86 T.C.

433 (1986), affd. in part, revd. in part 851 F.2d 1492

(D.C. Cir. 1988). However, petitioner did not file a

return for any of the years in issue 1992, 1993, and 1994. 

Accordingly, petitioner is not eligible for the married

filing joint return filing status pursuant to section 1(a)

with respect to any of the years in issue.

Second, petitioner complains that the deficiency

determined by respondent for each of the years in issue is

computed with the allowance of only one personal exemption. 

Petitioner contends that he is entitled to six personal

exemptions. According to petitioner, he is entitled to a

personal exemption for each of his four children because

at the close of each of the years in issue, each of his

children was a "dependent", as defined by section 152. 

Petitioner further contends that he is entitled to a

personal exemption for his spouse and for himself. 
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Respondent agrees that petitioner is entitled to five

personal exemptions, three for his children, one for his

spouse, and one for himself for each of the years in issue,

but respondent contends that petitioner is not entitled to

a personal exemption for petitioner's oldest daughter

because she was 19 years of age at the close of 1992. 

The parties have stipulated that "petitioner's oldest

child reached the age of 19 before December 31, 1992." 

Accordingly, petitioner is not entitled to a personal

exemption for his oldest child for any of the years in

issue, unless his oldest child had gross income of less

than the exemption amount or was a student who had not

attained the age of 24 at the close of the year. Sec.

151(c)(1)(A) and (B). Petitioner bears the burden of

proving eligibility for the exemption. Rule 142(a), Tax

Court Rules of Practice and Procedure. Petitioner failed

to introduce any evidence concerning his oldest daughter's

gross income for 1992, 1993, or 1994, and, thus, he did not

prove that her gross income in any of those years was less

than the exemption amount, $2,000. Sec. 151(d)(1). 

Furthermore, at trial, petitioner testified that he did not

know whether his oldest daughter was a student during any

of the years in issue. Petitioner stated as follows:
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Q And in regard to your oldest daughter, she

did reach 19 before the end of 1992. Correct

A Correct.

Q And you do not know whether she was a fulltime student in 1992--

A Correct.

Q -- or in 1993 --

A Correct.

Q -- or in 1994.

A Correct. 

Because petitioner did not prove that his oldest daughter

had gross income less than the exemption amount or was a

student during the years in issue, he has failed to meet

his burden of proving that he is eligible to claim a

personal exemption for her. Accordingly, we find that

petitioner is entitled to only five personal exemptions

for each of the years in issue.

Third, respondent determined in the notice of

deficiency that the entire amount that petitioner received

from the sale of his employer's stock in each of the years

in issue is taxable as gain realized from the sale. The

notice of deficiency describes this adjustment as follows:
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Based on information available to us, you had

stock sales in the amount shown below. If you

can substantiate this is not all taxable income,

and verify your basis in the stock sold, we will

be glad to reconsider this adjustment.

Petitioner contends that he did not realize any gain

from the sales of his employer's stock during any of the

years in issue. At trial, petitioner testified that he

participated in an employee stock purchase plan under which

$100 per month was deducted from his wages and used to

purchase his employer's stock. Petitioner's testimony is

corroborated by an employee stock purchase plan quarterly

statement issued by Merrill Lynch for the last quarter of

1992 and by a pay statement issued by American Airlines,

Inc., for August 14, 1992, and December 15, 1994. We

accept petitioner's testimony that the cost of purchasing

the stock that he sold during each of the years in issue

was equal to or greater than the amount he realized from

the sale of stock and that he did not realize a gain from

the sales during any of the years in issue.

Fourth, petitioner claims to be entitled to collect

"damages" of $17,732.46 from the Internal Revenue Service

on the ground that "no one should ever profit from improper

acts, be it an individual, or governmental agent." He
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claims that this is the "amount collected throughout the

years of the garnishment California placed on the wages". 

In his trial memorandum, petitioner cites section 7214

relating to offenses by officers and employees of the

United States, as authority for his damage claim. 

Furthermore, he asks the Court to allow him to deduct

$9,000 per year to reflect "the impact the events created

on his ability to earn income, both past, present and

future * * * in addition to any deductions that are

otherwise authorized."

The Tax Court has limited jurisdiction and may

exercise only the power conferred by statute. See sec.

7442; Neilson v. Commissioner, 94 T.C. 1, 9 (1990)

("This Court has limited jurisdiction conferred by

statute".). Petitioner's allegation that respondent's

conduct was improper in some way, such as amounting to a

violation of section 7214, is a matter over which this

Court has no jurisdiction. Cf. Boger v. Commissioner,

T.C. Memo. 1981-629. Petitioner has not shown that the

Court has jurisdiction to consider his claim for "damages"

under section 7214 or any other law.

Moreover, there is nothing in the record, and

petitioner has presented no evidence to substantiate his
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claim that respondent engaged in any tortious or other

improper conduct with respect to petitioner and his family. 

Petitioner's principal complaint seems to be that

respondent deducted the child support owed to the State

of California from petitioner's income tax refunds. The

record of this case suggests that this took place with

respect to a refund of petitioner's 1991 tax. However,

section 6402(c) provides:

The amount of any overpayment to be refunded to

the person making the overpayment shall be

reduced by the amount of any past-due support (as

defined in section 464(c) of the Social Security

Act) owed by that person of which the Secretary

has been notified by a State in accordance with

section 464 of the Social Security Act.

It appears that respondent was notified of petitioner's

past-due support obligations by the State of California

in accordance with section 464 of the Social Security Act. 

Thus, respondent was required to reduce petitioner's

income tax refunds and pay such amounts to the State of

California. Sec. 6402(c). No court of the United States,

including this Court, has jurisdiction to hear an action

to review or restrain a reduction authorized by section

6402(c). Sec. 6402(e). Accordingly, we deny petitioner's

claim for damages. 
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Fifth, petitioner argues that he is not liable for the

addition to tax for failure to file a timely return as

provided by section 6651(a)(1) because his failure to file

each of the subject tax returns was due to reasonable

cause. He claims that he did not file those tax returns

because he was uncertain about whether he could claim his

oldest daughter as a dependent and he wanted to "call

attention" to himself. At trial, petitioner stated as

follows:

Q Is there any reason that you did not file

your returns, other than your uncertainty

about the -- whether your oldest daughter

Angie, was a dependent or not? Is that the

only reason?

A No. The other reason was to call attention

on myself.

Q You thought that would get you noticed by

the IRS?

A I thought it would lead to answers. 

Section 6651(a)(1) provides that if a taxpayer fails

to file a tax return on the date prescribed for filing,

including any extension of time for filing, an addition to 

tax in an amount equal to 5 percent of the tax required to

be shown on the return will be imposed for each month, or

fraction thereof, during which the failure to file
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continues, up to a maximum of 25 percent. The addition to

tax is mandatory unless a taxpayer's failure to file a tax

return is due to reasonable cause and is not due to willful

neglect. Sec. 6651(a)(1). See generally Estate of

Cavenaugh v. Commissioner, 100 T.C. 407, 426 (1993), affd.

in part and revd. in part on other grounds 51 F.3d 597

(5th Cir. 1995). In order to establish reasonable cause, 

a taxpayer must show that he or she was unable to file a

tax return despite the exercise of ordinary business care

and prudence. See generally Bassett v. Commissioner, 67

F.3d 29, 31 (2d Cir. 1995), affg. 100 T.C. 650 (1993);

sec. 301.6651-1(c)(1), Proced. & Admin. Regs. 

As mentioned above, petitioner claims that his failure

to file each of the subject returns was due to reasonable

cause on the grounds that he did not know whether to report

his oldest daughter as a dependent and he wanted to "call

attention" to himself. Petitioner's testimony hardly shows

that he was prevented from filing any of the subject

returns despite the exercise of ordinary business care and

prudence. To the contrary, petitioner's testimony suggests

that he chose not to file his returns in an attempt to

"call attention" to himself. Thus, it appears that his

failure to file was not the result of the exercise of
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ordinary business care and prudence. If petitioner was

uncertain about the status of his oldest daughter as a

dependent, he could have attached a statement to each

return disclosing his uncertainty. We find that petitioner

has not established reasonable cause for his failure to

file his 1992, 1993, and 1994 income tax returns. 

Accordingly, we sustain respondent's determination of the

addition to tax under section 6651(a)(1).

Respondent determined an addition to tax for failure

to pay estimated income tax under section 6654 for 1992,

1993, and 1994. Section 6654(a) provides for an addition

to tax "in the case of any underpayment of estimated tax by

an individual" unless one of the exceptions contained in

that section is applicable. See generally Niedringhaus

v. Commissioner, 99 T.C. 202, 222 (1992). Petitioner's

position amounts to a naked assertion that he is not liable

for the addition to tax under section 6654. He has

presented no evidence that any of the exceptions set forth

therein applies, nor has he presented any other basis to

find that respondent's determination is wrong. Accordingly, we sustain respondent's determination and find

petitioner liable under section 6654 for his failure to

make estimated tax payments for 1992, 1993, and 1994. 
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To reflect the foregoing,

Decision will be entered

under Rule 155.