1All section references are to the Internal Revenue Code in

effect for 2003, the year at issue, unless otherwise specified.

T.C. Memo. 2008-204

UNITED STATES TAX COURT

WALTER KOWSH, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 15154-06. Filed August 28, 2008.

Walter Kowsh, pro se.

Michelle L. Maniscalco, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

KROUPA, Judge: Respondent determined an $11,846.40

deficiency in petitioner’s income tax for 2003 and a $2,376.99

addition to tax for failure to file a return timely under section

6651(a)(1),1 a $1,267.73 addition to tax for failure to pay tax

timely under section 6651(a)(2), and a $272.75 addition to tax

for failure to pay estimated tax under section 6654. After
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2The parties stipulated, after petitioner eventually filed

the return for 2003, to petitioner’s items of income, loss,

exemptions, credits, and self-employment tax.

3Petitioner claimed a $3,000 deduction for tuition and

related fees to send his children to Catholic school. Petitioner

failed to substantiate these expenses at trial, however. In

addition, petitioner admits that he paid the amounts to a private

middle or high school, not to a post-secondary institution. See 

secs. 25A, 222. We therefore find that petitioner is not

entitled to the deduction.

concessions,2 the remaining issues for decision3 are whether

petitioner’s depression caused by his wife’s untimely death at

age 53 and the September 11, 2001 attacks (September 11 attacks)

on the World Trade Center qualifies as a disability for purposes

of the 10-percent additional tax on his pension distribution

under section 72(t) and qualifies as reasonable cause for his

failure to file a timely return, timely pay taxes, and pay

estimated tax. We hold that petitioner’s depression does not

qualify as a disability under section 72(t) or as reasonable

cause for purposes of the additions to tax. 

FINDINGS OF FACT

Some of the facts have been stipulated and are so found. 

The stipulation of facts and the accompanying exhibits are

incorporated by this reference. Petitioner resided in New York

at the time he filed the petition.

Background

Petitioner’s wife died an untimely death from thyroid cancer

at age 53 in June 2001, leaving petitioner responsible for her 

aged mother and petitioner’s two teenage children. Petitioner

managed six employees, overseeing day-to-day operation of a large
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computer system at Deutsche Bank at the time his wife died and at

the time of the September 11 attacks on the World Trade Center

near the Deutsche Bank building. Petitioner lost a number of

friends and neighbors in the September 11 attacks, including

three or four people who had attended his wife’s funeral. 

By February 2002, petitioner’s depression from his wife’s

death and the September 11 attacks became so severe that

petitioner could no longer go to work. Petitioner also suffered

from sleep apnea that caused him to have narcoleptic episodes and

fall asleep. The Human Resource Department at Deutsche Bank

instructed petitioner to seek aid through the Bank’s employee

assistance program, which he did. 

Petitioner was given medication for depression and anxiety

attacks. Petitioner testified that he took Wellbutrin, Lexapro,

Ativan and Paxil, commonly known antidepressants and/or anti

anxiety medications, but petitioner was unable to specify when he

took any of the medications. Moreover, petitioner failed to

provide any affidavits or testimony from any medical

professionals regarding any illnesses. Petitioner failed to

provide any reports or letters from doctors despite numerous

requests from respondent. In addition, his doctor was unwilling

to provide any certification that petitioner was disabled.

Petitioner received both short-term and long-term disability

payments through his disability insurance policy with a private

insurer. Petitioner provided no evidence that he applied for or

received Social Security disability benefits. 
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4Petitioner concedes that he received a $332 distribution

from a qualified retirement plan during the year at issue. 

(continued...)

Petitioner did not file an income tax return for 2003, which

was due on April 15, 2004. Respondent prepared a substitute for

return with information from petitioner’s third-party payors and

issued a deficiency notice to petitioner. Petitioner timely

filed a petition and petitioner subsequently, in February 2008,

prepared a proposed return. We must decide his liability for the

section 72(t) additional tax and the additions to tax under

section 6651(a)(1) and (2) and section 6654. Petitioner argues

that his depression qualifies as a disability for purposes of the

10-percent additional tax on his pension distribution under

section 72(t) and qualifies as reasonable cause for his failure

to file a return timely, to pay taxes timely and to pay estimated

tax.

OPINION

We are asked to decide whether petitioner’s depression

constituted a disability to absolve petitioner from the 10-

percent additional tax on an early distribution under section

72(t) and whether such disability constitutes reasonable cause to

absolve petitioner from the additions to tax. Respondent

stipulates that petitioner received short-term and long-term

disability payments through an insurance carrier. Respondent

argues, however, that disability for insurance purposes does not

establish that petitioner was disabled within the meaning of

section 72(t)4 or for purposes of establishing reasonable cause
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4(...continued)

Petitioner fails to dispute that, if the distribution was not

attributable to his being disabled within the meaning of sec.

72(t)(2)(A)(iii), he qualifies for none of the other exceptions

of sec. 72(t)(2). 

for his failure to file a return, to pay the tax due, and to pay

the estimated tax. We agree.

Early Distribution From Pension Account

We first address whether petitioner is liable for the 10-

percent additional tax on early distributions under section

72(t). Section 72(t)(1) imposes a 10-percent additional tax on

the amount of an early distribution from a qualified retirement

account. Section 72(t)(2) provides for certain exceptions to the

imposition of this 10-percent additional tax. One such exception

is a distribution attributable to an individual’s being

“disabled.” Sec. 72(t)(2)(A)(iii). An individual is “disabled”

for this purpose if he or she “is unable to engage in any

substantial gainful activity by reason of any medically

determinable physical or mental impairment that can be expected

to result in death or to be of long-continued and indefinite

duration.” Sec. 72(m)(7). An individual seeking to benefit from

the exception must provide proof of his or her disability. Id.

Petitioner argues that the depression he suffered due to his

wife’s early death and the September 11 attacks caused him to be

totally “disabled.” Petitioner offered no documentary evidence

to corroborate his depression or anxiety, however. In addition,

no doctors testified nor did petitioner provide any affidavits

from medical professionals. No doctor was willing to certify
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that petitioner was disabled. We find that petitioner’s

uncorroborated testimony does not establish that he was

“disabled” for section 72(m)(7) purposes. Moreover, we agree

with respondent that qualifying for disability insurance is not

dispositive in determining whether an individual is disabled for

purposes of the 10-percent additional tax under section 72(t). 

Thus, petitioner is liable for the 10-percent additional tax

under section 72(t) that applies to the pension distribution

petitioner received in 2003.

Additions to Tax for Failure To File and Pay Timely

We next address whether petitioner’s failure to file a

timely return and to timely pay the tax was due to reasonable

cause. Petitioner admits that he failed to file the return

timely and pay the correct amount of tax. Petitioner argues,

however, that his depression and sleep apnea constitute

reasonable cause. 

Section 6651(a)(1) provides for an addition to tax for

failure to timely file a tax return on or before the specified

filing date, and section 6651(a)(2) provides for an addition to

tax for failure to timely pay the tax due. The additions to tax

under section 6651 do not apply, however, if the failure to

timely file or timely pay is due to reasonable cause and not to

willful neglect. United States v. Boyle, 469 U.S. 241, 245

(1985). Petitioner has the burden of proof with respect to
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5The Commissioner bears the burden of proving with respect

to sec. 6651(a)(2) that he prepared a substitute for return that

properly estimated the amount of tax due and fulfilled the

requirements of sec. 6020(b). Wheeler v. Commissioner, 127 T.C.

200, 208-210 (2006), affd. 521 F.3d 1289 (10th Cir. 2008). Both

parties concede that respondent has met his burden. The

Commissioner has the burden to produce evidence that the return

was filed late in respect of sec. 6651(a)(1). Higbee v.

Commissioner, 116 T.C. 438, 446-447 (2001). Petitioner admits

that he failed to file the return timely.

defenses to the additions to tax under section 6651.5 See Higbee

v. Commissioner, 116 T.C. 438, 446 (2001). To satisfy this

burden, a taxpayer must show that he or she exercised ordinary

business care and prudence but was nevertheless unable to file

the return within the prescribed time. Crocker v. Commissioner,

92 T.C. 899, 913 (1989); sec. 301.6651-1(c)(1), Proced. & Admin.

Regs. A taxpayer may have reasonable cause for failure to timely

file a return where the taxpayer experiences an illness or

incapacity that prevents the taxpayer from filing his or her

return. See, e.g., Estate of Kirchner v. Commissioner, 46 B.T.A.

578, 585 (1942); Carnahan v. Commissioner, T.C. Memo. 1994-163,

affd. without published opinion 70 F.3d 637 (D.C. Cir. 1995);

Jones v. Commissioner, T.C. Memo. 1988-542; Harris v.

Commissioner, T.C. Memo. 1969-49. We do not find that

petitioner’s depression and sleep apnea incapacitated him to such

an extent that he was unable to file the return and pay the

proper amount of taxes for 2003. Petitioner offered no evidence

to corroborate his accounts of depression or anxiety. No doctors

testified nor did petitioner provide any affidavits from medical

professionals. Petitioner failed to meet his burden of proving
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reasonable cause for his failure to timely file the return and

pay the proper amount of taxes.

Moreover, petitioner’s failure to timely file continued for

years beyond the due date of the return. We have held in similar

situations that there is no reasonable cause for a delay in

filing beyond the term of the taxpayer’s illness. See, e.g.,

Ramirez v. Commissioner, T.C. Memo. 2005-179; Black v.

Commissioner, T.C. Memo. 2002-307, affd. 94 Fed. Appx. 968 (3d

Cir. 2004); Wright v. Commissioner, T.C. Memo. 1998-224. 

Petitioner’s depression and anxiety admittedly affected him

during a portion of 2001, and likely for some time thereafter. 

The return for 2003 remained unfiled, however, for almost 5 years

from its due date and was filed only in preparation for trial in

February 2008. We find that petitioner’s illness does not

constitute reasonable cause for his failure to timely file a

return and pay the proper amount of taxes.

In sum, petitioner has not shown that his failure to timely

file an income tax return for 2003 and pay the proper amount of

tax was due to reasonable cause and not to willful neglect. 

Thus, we find that petitioner is liable for the additions to tax

under section 6651(a)(1) and (2).

Estimated Tax Addition

Respondent also determined petitioner was liable for an

addition to tax under section 6654(a) for failure to make

estimated tax payments for 2003. Section 6654(a) imposes an

addition to tax where a taxpayer underpays estimated tax. The
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estimated tax addition is mandatory unless a statutory exception

in section 6654(e) applies. See Recklitis v. Commissioner, 91

T.C. 874, 913 (1988); Grosshandler v. Commissioner, 75 T.C. 1,

20-21 (1980); see also Estate of Ruben v. Commissioner, 33 T.C.

1071, 1072 (1960) (reasonable cause and lack of willful neglect

are not relevant considerations for estimated tax addition). 

Notwithstanding the lack of reasonable cause, respondent

must produce evidence sufficient for us to conclude that

petitioner had a required annual payment under section

6654(d)(1)(B) (relating to tax liability for the preceding tax

year) to determine whether one of the exceptions applies. See

Wheeler v. Commissioner, 127 T.C. 200, 210-212 (2006), affd. 521

F.3d 1289 (10th Cir. 2008). The record reflects that petitioner

had $1,044 withheld towards his tax liability for 2003, and

petitioner made no estimated tax payments for 2003. The record

fails to reflect, however, whether petitioner filed a return for

the preceeding tax year, 2002, and, if so, what petitioner’s

liability was for that year. We therefore conclude that

respondent failed to produce the requisite evidence, and thus

petitioner is not liable for the addition to tax under section

6654(a) for underpaying estimated tax for 2003.

To reflect the foregoing and the concessions of the parties,

Decision will be entered

under Rule 155.