1 Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect for the years in issue, and

(continued...)

T.C. Memo. 2005-111

UNITED STATES TAX COURT

C. WAYNE LEWIS, JR., Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 7211-04. Filed May 17, 2005.

C. Wayne Lewis, Jr., pro se.

Randolph J. Buchanan, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

FOLEY, Judge: By notices dated January 21, 2004, respondent

determined deficiencies in and additions to petitioner’s 1998,

2000, and 2001 Federal income taxes. The issues for decision are

whether petitioner received unreported income and is liable for

sections 6651(a)(1)1 and 6654(a) additions to tax.
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1(...continued)

all Rule references are to the Tax Court Rules of Practice and

Procedure.

FINDINGS OF FACT

In 1998, petitioner provided services to Highway Master

Corp. (HMC) and Saunders-Ream Advertising & Marketing (SRAM). 

HMC and SRAM paid petitioner $3,920 and $3,140, respectively, and

issued him Forms 1099-MISC, Miscellaneous Income, reflecting such

compensation. In that same year, Salomon Smith Barney Inc. (SSB)

paid petitioner $235 of dividends and issued him a Form 1099-DIV,

Dividends and Distributions, reflecting such dividends. 

In 2000, petitioner was employed by Vu Ryte, Inc. (VRI). 

VRI paid petitioner $34,818 and issued him a Form W-2, Wage and

Tax Statement, reflecting this amount and $3,100 of Federal

income tax withheld. 

In 2001, petitioner continued employment with VRI, received

a distribution from VRI’s retirement plan with Merrill Lynch

(ML), and was involved in real estate sales with Hexter-Fair

Title Co. (HFTC) and Community Title (CT). VRI paid petitioner

$36,332 and issued him a Form W-2 reflecting this amount and

$3,312 of Federal income tax withheld. HFTC and CT paid

petitioner $160,500 and $50,000, respectively, and issued him

Forms 1099-S, Proceeds From Real Estate Transactions, reflecting

such proceeds. ML distributed $6,174 to petitioner from his VRI

retirement plan and issued him a Form 1099-R, Distributions From
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Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs,

Insurance Contracts, etc., reflecting such distribution.

On January 21, 2004, respondent issued petitioner notices of

deficiency relating to 1998, 2000, and 2001. In the notices,

respondent determined that petitioner received unreported income,

did not file Federal income tax returns relating to those years,

and did not pay sufficient estimated taxes relating to 2001. On

April 30, 2004, petitioner filed his petition, and on June 15,

2004, respondent filed his answer.

Petitioner resided in Tyler, Texas, at the time he filed his

petition.

OPINION

Generally, a notice of deficiency is presumed correct, and

the taxpayer bears the burden of proving that the determination

is erroneous. Welch v. Helvering, 290 U.S. 111, 115 (1933). The

Court of Appeals for the Fifth Circuit, where an appeal would

lie, has recognized, however, that “a court need not give effect

to the presumption of correctness in a case involving unreported

income if the Commissioner cannot present some predicate evidence

supporting its determination.” Portillo v. Commissioner, 932

F.2d 1128, 1133 (5th Cir. 1991), affg. in part and revg. and

remanding in part T.C. Memo. 1990-68.

Petitioner raises numerous meritless contentions; concedes

that he provided services to HMC, SRAM, and VRI; and does not
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2 Sec. 7491(a) is inapplicable because petitioner failed to

introduce credible evidence within the meaning of sec.

7491(a)(1).

dispute that he received the amounts reflected in the third-party

payment reports (e.g., Form W-2 and Form 1099-MISC). Thus,

respondent has sufficiently connected petitioner to the

underlying activities relating to the unreported income. Parker

v. Commissioner, 117 F.3d 785, 787 (5th Cir. 1997)(when the

taxpayer does not dispute the receipt of unreported income,

respondent “has no duty to investigate a third-party payment

report”). As a result, respondent’s determinations are presumed

correct, and petitioner bears the burden of proof. Petitioner,

however, failed to present any credible evidence to counter

respondent’s determinations.2 Accordingly, we sustain the

deficiencies as determined by respondent.

Respondent also determined additions to tax for failure to

file tax returns, pursuant to section 6651(a)(1), and pay

estimated income tax, pursuant to section 6654(a). Respondent,

pursuant to section 7491(c), has met his burden of production

relating to both additions to tax. He established that

petitioner failed to file his 1998, 2000, and 2001 tax returns

and pay his 2001 estimated taxes. Niedringhaus v. Commissioner,

99 T.C. 202, 220-223 (1992). Petitioner’s failure to file was

not due to reasonable cause, and he does not meet any of the

exceptions to section 6654(a). Accordingly, we sustain the
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additions to tax as determined by respondent.

Contentions we have not addressed are irrelevant, moot, or

meritless. 

To reflect the foregoing,

Decision will be entered

for respondent.