T.C. Summary Opinion 2011-56

UNITED STATES TAX COURT

CAROLYN GAY HARPER, Petitioner v. 

COMMISSIONER OF INTERNAL REVENUE, Respondent 

Docket No. 29332-08S. Filed May 2, 2011.

Carolyn Gay Harper, pro se.

Shirley M. Francis, for respondent.

MORRISON, Judge: This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect

when the petition was filed. Pursuant to section 7463(b), the

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

this opinion shall not be treated as precedent for any other

case. All section references are to the Internal Revenue Code
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for the years in issue, and all Rule references are to the Tax

Court Rules of Practice and Procedure. 

The respondent (whom we refer to as the IRS) issued to the

petitioner, Carolyn Gay Harper, notices of deficiency determining

the following deficiencies in taxes and additions to tax: 

Year Deficiency

Addition to Tax

Sec. 6651(a)(1)

Addition to Tax

Sec. 6651(a)(2)

Addition to Tax

Sec. 6654

 2005 $6,211 $1,397.47 $869.54 $249.10

2006 4,060 913.50 324.80 192.13

The IRS has conceded that Ms. Harper is not liable for the

addition to tax for failing to make estimated tax payments of her

2005 tax liability. Resolving the remaining issues, we determine

that: 

(1) The amounts that Harper received from Lane County,

Oregon for the care of her disabled adult son ($37,413.28 in

2005 and $39,288.96 in 2006) are includable in her gross

income;

(2) Harper is required to include amounts in her gross

income for 2005 because of $10,557 in pension and annuity

payments she received from the Social Security

Administration; 

(3) Harper is liable for section 6651(a)(1) additions to tax

for failing to file income tax returns for 2005 and 2006 (in

the amounts of $1,397.47 and $913.50, respectively) and
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section 6651(a)(2) additions to tax for failure to pay

income tax for 2005 and 2006; and 

(4) Harper is liable for the section 6654 addition to tax

for failing to make estimated tax payments of her 2006

income tax liability. 

Background

The stipulation executed by the parties is hereby adopted. 

Harper resided in Oregon when she filed her petition. Harper has

an adult son who is disabled and cannot care for himself. Harper

is his court-appointed guardian. In 2004 and 2005, Lane County,

Oregon, contracted with Resource Connections of Oregon, a fiscal

intermediary service used to perform payroll services, to pay

Harper to care for her son. Harper received payments of

$37,413.28 in 2005. She received payments of $39,288.96 in 2006. 

Harper received $10,557 in Social Security benefits in 2005. 

This amount was reported to the IRS on Form SSA-1099, Social

Security Benefit Statement. 

Harper did not file federal income tax returns for the tax

years 2005 and 2006. She did not seek the advice of a tax

professional about her income tax filing requirements.

The IRS filed substitute returns on July 8, 2008, for tax

years 2005 and 2006. 

Harper does not dispute that she received the amounts that

the IRS determined should be included in her gross income, but
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she disputes whether those amounts should be included in her

gross income. 

Discussion

I. The Amounts That Harper Received From Lane County, Oregon,

for the Care of Her Disabled Adult Son ($37,413.28 in 2005

and $39,288.96 in 2006) Are Includable in Her Gross Income.

Section 61(a) provides that, except as otherwise provided, 

gross income means all income from whatever source

derived, including (but not limited to) the following

items: 

(1) Compensation for services, including fees, 

commissions, fringe benefits, and similar items;

According to the record, the payments that Harper received from

Lane County were payments for her taking care of her disabled

adult son. On February 3, 2006, Resource Connections of Oregon

wrote a letter to Harper explaining that the Lane County support

plan for Harper’s son provided that Harper was paid by the county

to assist her son in all areas of daily living. The payments

from Lane County were therefore payments for services. 

In Bannon v. Commissioner, 99 T.C. 59, 60 (1992), the

taxpayer cared for her 37-year-old mentally retarded daughter in

her own home. The State of California paid for the care under a

program to provide nonmedical in-home supportive services. Id. 

Because of the daughter’s incompetency, the taxpayer had the

authority to act on her behalf in selecting the daughter’s care

providers. Id. The taxpayer chose to provide care herself. Id.

During the first five months of 1986, the State wrote the checks
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to the daughter directly, and the taxpayer cashed the checks on

behalf of the daughter. Id. During the last seven months of

1986, the State wrote the checks directly to the taxpayer. Id.

The State considered the daughter to be the recipient of the

benefits of the state program. Id. The taxpayer argued that

under the “general welfare doctrine” the amounts she received

were not includable in her income. Id. at 62-63. The IRS

conceded that benefits paid by the State of California pursuant

to the program were not income to recipients of aid such as the

taxpayer’s daughter. Id. at 63. The Court held that, because

the taxpayer was not the recipient of aid, the payments were

taxable to her as compensation income. Id.

Like the taxpayer in Bannon, Harper argues that the amounts

she received from Lane County were excludable from her income

under the general welfare doctrine. But like the taxpayer in

Bannon, Harper is not the recipient of the government aid. 

Therefore, the Lane County payments are not excluded from

Harper’s income.

Harper argues that the care that she provided her son is the

same type of care that she had provided him for all his life

without payment from the county. She also argues that she is not

in the business of providing care for disabled persons and that

she is not an employee of the government or of her son. These
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points do not detract from the fact that she was paid for

services. Payments for services are income.

II. Harper Is Required To Include Amounts in Her Gross Income in

2005 Because She Received $10,557 in Pension and Annuity

Payments From the Social Security Administration.

The IRS determined that Harper was required to include

amounts in her gross income for 2005 because she received $10,557

of Social Security Administration benefits during 2005. Harper’s

petition, her testimony, and her brief do not contest this

determination. Although the stipulation states that Harper

generally contests the inclusion in her income of all of the

amounts determined to be includable in her income by the notice

of deficiency, this is not specific enough a contention. We

consider Harper to have waived any contention that the $10,557 is

excludable from income. See Rule 34(b)(4). 

III. Harper Is Liable for Section 6651(a)(1) Additions to Tax for

Failing To File Income Tax Returns for 2005 and 2006 (in the

Amounts of $1,397.47 and $913.50, Respectively) and Section

6651(a)(2) Additions to Tax for Failure to Pay Income Tax

for the Taxable Years 2005 and 2006.

The IRS has the burden of producing evidence that the

taxpayer is liable for additions to tax. See sec. 7491(c). If

the IRS produces evidence demonstrating that the taxpayer is

liable for the additions to tax, the taxpayer must provide

sufficient evidence to convince the Court that the IRS’s

determination is incorrect. Higbee v. Commissioner, 116 T.C.
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438, 447 (2001). For certain defenses that the taxpayer can

assert against the imposition of additions to tax, such as that 

the taxpayer had reasonable cause for not filing the return, the

burden of proof is on the taxpayer. Id. For the tax years 2005

and 2006 Harper did not file tax returns. The filing of the

substitute returns is disregarded for the purpose of the section

6651(a)(1) addition to tax for the failure to file returns. Sec.

6651(g)(1). However, the substitute returns are considered

returns for the purpose of the section 6651(a)(2) addition to tax

for failing to pay tax shown on the returns. Sec. 6651(g)(2). 

Harper did not pay the tax shown on the substitute returns. 

Harper’s failure to file returns and pay taxes is not

attributable to reasonable cause. Harper did not hire a tax

professional to prepare her tax returns for 2005 and 2006. She

did not explain how she arrived at the conclusion that she was

not required to file returns. She argues that she should be

excused from the additions to tax because she had attempted to

convince Resource Connections of Oregon to stop reporting the

payments to the IRS. That organization had been reporting the

payments it made to her to the IRS on Forms W-2, Wage and Tax

Statement.1 Harper’s efforts to stop these Forms W-2 from being

issued are irrelevant. Nothing about the efforts demonstrates

1The Forms W-2 listed Harper as both the employer and the

employee. 
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that Harper attempted to comply with her obligations under the

tax laws. She is therefore liable for each year for the section

6651(a)(1) addition to tax for failing to file a return and the

section 6651(a)(2) addition to tax for failing to pay tax.

IV. Harper Is Liable for the Section 6654(a) Addition to Tax for

Failing To Make Estimated Tax Payments of her 2006 Income

Tax Liability.

The IRS has established that Harper was required to make

estimated tax payments for the tax year 2006. See Wheeler v.

Commissioner, 127 T.C. 200, 211-212 (2006), affd. 521 F.3d 1289

(10th Cir. 2008). She made no payments. Nor has she shown that

she is exempt under section 6654(e). She therefore is liable for

the addition to tax under section 6654(a) for the taxable year

2006. 

To reflect the foregoing,

Decision will be entered

under Rule 155.