T.C. Summary Opinion 2003-151

UNITED STATES TAX COURT

JOHNY L. DOTSON, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 7888-02S. Filed October 14, 2003.

Johny L. Dotson, pro se.

Rollin G. Thorley, for respondent.

PAJAK, Special Trial Judge: This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed. Unless otherwise

indicated, section references are to the Internal Revenue Code in

effect for the years in issue. The decision to be entered is not

reviewable by any other court, and this opinion should not be

cited as authority.
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Respondent issued two separate notices of deficiency for

taxable years 1998 and 1999, respectively. Respondent determined

deficiencies in petitioner's Federal income taxes and additions

to tax in the following amounts:

 Additions to Tax

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

1998 $1,530 $382.50 -

1999 2,122 530.50 $102.70

This Court must decide: (1) Whether petitioner has

unreported taxable income for 1998 and 1999; (2) whether

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

failure to file Federal income tax returns for 1998 and 1999; and

(3) whether petitioner is liable for the section 6654(a) addition

to tax for failure to pay estimated income tax for 1999. 

Some of the facts in this case have been stipulated and are

so found. Petitioner resided in Las Vegas, Nevada, at the time

he filed his petition.

During the taxable years in issue, petitioner received the

following payments in the following amounts:

 1998

 Nonemployee compensation $ 1,562

 Rent 13,523

 Interest 21

 $15,106

 1999

 Nonemployee compensation $ 5,224

 Rent 10,725

 Interest 13

 $15,962
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Petitioner did not file Federal income tax returns for 1998

and 1999. Respondent received information reports and prepared

substitutes for return for 1998 and 1999. Respondent determined

that petitioner had unreported income of $15,106 and $15,962 for

1998 and 1999, respectively.

Section 61(a) provides that gross income includes all income

from whatever source derived unless excludable by a specific

provision of the Code. Compensation, interest, and rents are

enumerated sources of income includable in gross income. Sec.

61(a)(1), (4), and (5). 

Petitioner stipulated to receipt of nonemployee

compensation, rent, and interest in the amounts determined in the

notices of deficiency. At trial, petitioner testified that he

did not file Federal tax returns for 1998 and 1999. Petitioner

began to make tax protester type arguments, but upon admonition

by the Court as to potential penalties associated with advancing

such arguments, petitioner concluded his testimony. Petitioner

offered no evidence as to the excludability of any of the amounts

he received during 1998 and 1999. We find that petitioner had

unreported income in 1998 and 1999 in the amounts determined by

respondent.

We further find that respondent has satisfied his burden of

production with respect to the imposition of the additions to tax

under sections 6651(a)(1) and 6654(a). Sec. 7491(c).
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As to the section 6651(a)(1) additions to tax for 1998 and

1999, section 6651(a)(1) imposes an addition to tax for failure

to timely file a tax return, unless such failure is due to

reasonable cause and not willful neglect. Additions to tax under

section 6651(a)(1) are imposed unless the taxpayer establishes

that the failure was due to reasonable cause and not willful

neglect. The taxpayer must prove both reasonable cause and a

lack of willful neglect. Crocker v. Commissioner, 92 T.C. 899,

912 (1989). “Reasonable cause” requires the taxpayer to

demonstrate that he exercised ordinary business care and

prudence. United States v. Boyle, 469 U.S. 241, 246 (1985). 

Willful neglect is defined as a “conscious, intentional failure

or reckless indifference.” Id. at 245. 

Petitioner did not file tax returns for 1998 and 1999. 

Petitioner offered no evidence that he had reasonable cause and a

lack of willful neglect. Rather, in tax protester fashion,

petitioner testified that he did not file tax returns for 1998

and 1999 because, under the Internal Revenue Code, “there’s no

requirement to file without tax liability first * * * [and] it

has to be recorded” and that “I have no liability”. Such a

position does not demonstrate reasonable cause. Thus, we

conclude that petitioner is liable for the additions to tax under

section 6651(a)(1) for 1998 and 1999. 

We next consider whether petitioner is liable for the
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addition to tax under section 6654 for failure to pay estimated

taxes for 1999. Section 6654(c) imposes a requirement that

estimated taxes be paid in installments. If a taxpayer fails to

pay a sufficient amount of estimated taxes, section 6654(a)

provides for a mandatory addition to tax in the absence of

exceptions not applicable here. Grosshandler v. Commissioner, 75

T.C. 1, 20-21 (1980). Petitioner did not file a tax return for

1999, and there is no evidence that any tax was withheld from the 

income he received in 1999. Accordingly, we find that petitioner

is liable for the addition to tax under section 6654 for 1999.

Reviewed and adopted as the report of the Small Tax Case

Division.

Decision will be entered

for respondent.