T.C. Memo. 2010-161

UNITED STATES TAX COURT

REX D. FRANCIS, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 3170-09. Filed July 26, 2010.

Rex D. Francis, pro se.

Luanne S. DiMauro, for respondent.

MEMORANDUM OPINION

COHEN, Judge: Respondent determined a deficiency of $560 in

petitioner’s Federal income tax for 2006. Most of the deficiency

resulted from petitioner’s failure to report on his return

unemployment compensation reported to the Internal Revenue

Service (IRS) by the Connecticut Department of Labor. The issue

for decision is whether petitioner is liable for the deficiency
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despite his contention that he did not receive all of the

unemployment compensation to which he was entitled. Unless

otherwise indicated, all section references are to the Internal

Revenue Code in effect for the year in issue, and all Rule

references are to the Tax Court Rules of Practice and Procedure.

Background

None of the facts have been stipulated, and the evidence

consists entirely of petitioner’s testimony and the admissions in

his petition. Petitioner resided in Connecticut at the time he

filed his petition. 

Petitioner was unemployed for part of 2006 and received

unemployment compensation that he failed to report on his 2006

Federal tax return. Some of the unemployment compensation to

which he was entitled was offset by amounts owed to the

Connecticut Department of Labor for prior debts, and the

Connecticut Department of Labor reported some of the compensation

to the IRS. According to respondent, the deficiency determined

included $2,871, representing 11 weeks of unemployment

compensation at $261 per week, reported by the State of

Connecticut to the IRS, and another undisputed income item.

Petitioner asserts that he was entitled to unemployment

compensation for 26 weeks at $261 per week, or a total of $6,786,

less offsets for a debt that he owed the State of Connecticut and
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for Federal and State income taxes. He argues that he did not

receive the correct net amount of unemployment benefits.

Discussion

Because petitioner refused to stipulate any exhibits and

various evidentiary objections were sustained, the record is too

sparse for meaningful findings of fact. (Respondent asserts that

the absence of admissible records is due to late breakdown of

settlement negotiations with petitioner’s counsel, who prepared

the petition and negotiated a settlement but withdrew at the

calendar call shortly before trial. Petitioner consented to

counsel’s withdrawal, and both parties agreed to go forward.)

The petition is internally inconsistent about unemployment

compensation that petitioner received. The petition alleges that

petitioner was unemployed for part of 2006 and received

unemployment compensation during the period in which he was

unemployed, acknowledges that unemployment compensation is

taxable, alleges that petitioner never actually received

unemployment compensation, and asks the Court to determine that

he did not receive any unemployment compensation in 2006. From

his testimony, it appears that petitioner is disputing amounts

not paid to him by the Connecticut Department of Labor, but his

testimony is unclear as to whether nonpayment is attributable to

offsets or suspension of his benefits. 
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Although it is certainly not apparent from the record what

occurred, if petitioner’s unemployment compensation was withheld

or diverted to pay his debts he is still taxable on it. See,

e.g., Doose v. Commissioner, T.C. Memo. 2010-18; Chambers v.

Commissioner, T.C. Memo. 2000-218 (and cases cited therein),

affd. 17 Fed. Appx. 688 (9th Cir. 2001). Petitioner acknowledges

his understanding of this general rule. His argument is that he

was entitled to receive from the Connecticut Department of Labor

more than amounts properly withheld or diverted and more than the

amounts reported to the IRS by the State.

The only thing clear from the record is that petitioner’s

claims do not fall within the Court’s jurisdiction. He wants an

explanation of “where did the $6,786 go?”. He indicates that he

has tried unsuccessfully to get that information elsewhere. With

his refusal to stipulate relevant facts and documents, and the

inconsistencies in his petition and his testimony, we are unable

even to speculate about the answer to his question.

This Court has limited jurisdiction, which does not include

authority to resolve disputes between a taxpayer and Federal or

State authorities arising in other contexts and only remotely

relevant to the determination of a deficiency that is before us.

See, e.g., Kindred v. Commissioner, T.C. Memo. 2010-107;

Hackworth v. Commissioner, T.C. Memo. 2004-173. In this case,

our limited jurisdiction is to determine whether petitioner has
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shown any error in the notice of deficiency. He has the burden

of showing error, and he has not done so. See generally sec.

6201(d); Rule 142(a).

For the foregoing reasons,

 Decision will be entered

for respondent.