T.C. Memo. 2010-138

UNITED STATES TAX COURT

LEE ROY SULLIVAN, JR., Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket Nos. 11054-09, 13323-09, Filed June 22, 2010.

13324-09.

Lee Roy Sullivan, Jr., pro se.

Olivia Hyatt and Steven M. Webster, for respondent.

MEMORANDUM OPINION

COHEN, Judge: In these consolidated cases, respondent

determined deficiencies and additions to tax with respect to

petitioner’s Federal income taxes for 2004, 2005, and 2006 as

follows:
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 Additions to Tax 

Year Deficiency Sec. 6651(a)(1) Sec. 6651(a)(2) Sec. 6654(a)

2004 $7,244 $1,480.73 $1,447.82 $186.47

2005 6,846 1,540.35 1,095.36 274.62

2006 6,239 1,403.78 623.90 295.26

Respondent has conceded the section 6651(a)(2) addition to tax

for all years and some deductions as indicated below. After

concessions, the issues for decision are whether petitioner is

entitled to any deductions not previously allowed by respondent

and whether he is liable for the additions to tax under sections

6651(a)(1) and 6654(a). Unless otherwise indicated, all section

references are to the Internal Revenue Code in effect for the

years in issue, and all Rule references are to the Tax Court

Rules of Practice and Procedure.

Background

The material facts have been deemed stipulated pursuant to

Rule 91(f). Petitioner resided in South Carolina at the time

that he filed his petitions.

Petitioner was employed as a painter by Waddell Painting and

received wages of $42,743, $44,847, and $46,417 during 2004,

2005, and 2006, respectively. He also received from the Housing

Authority of the City of Greenville rents of $7,212, $4,070, and

$740, during 2004, 2005, and 2006, respectively. During 2005,

petitioner received interest of $13. 

Petitioner did not file Federal income tax returns for the

years in issue. Respondent determined deficiencies based on
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third-party information reporting. After a conference with the

Internal Revenue Service Appeals Office, certain of petitioner’s

claimed deductions were accepted, as discussed below.

Procedural Matters

The petitions in these cases had attached copies of a form

containing a hodgepodge of frivolous, irrelevant, and spurious

arguments. The form sets forth a general denial of tax

liability; a claim of various deductions and exemptions and

filing status other than allowed in the statutory notices; an

assertion that the figures used “stem from illegal immigrants”

using the taxpayer’s Social Security number; an allegation that

penalties should be waived because “the Internal Revenue Code is

so complex and confusing”; a claim for “the illegal telephone

excise tax”; a claim of deductible expenses of tax preparation

and advice on filing (even though no returns were filed); and a

claimed lack of records justifying reconstruction and estimates,

with a citation of and quotation from Cohen v. Commissioner, 266

F.2d 5 (9th Cir. 1959) [remanding T.C. Memo. 1957-172]. This

form is familiar because it is repeatedly used by persons relying

on a tax defier Web site. See, e.g., Cook v. Commissioner, T.C.

Memo. 2010-137, filed this date.

By notices served September 29, 2009, these cases were set

for trial in Columbia, South Carolina, on March 1, 2010. 

Attached to the notices setting case for trial was the Court’s
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standing pretrial order, which advises the parties of the

requirements for preparation of cases for trial in this Court,

specifically including the exchange of documents and the

execution of stipulations in accordance with Rule 91. 

On December 2, 2009, respondent filed in each case a motion

under Rule 91(f) asserting that petitioner had refused to

stipulate to any facts or documents involved in the cases. The

proposed stipulations set out petitioner’s receipt of the items

of income determined in the statutory notice and his failure to

file timely returns. An order to show cause was issued,

petitioner failed to submit a timely or proper response, and the

matters that were the subject of the motion were deemed

stipulated. At the time of trial, petitioner was given an

opportunity to show that the deemed stipulations should be set

aside, but he failed to raise any reasonable dispute with respect

to the items of income. See sec. 6201(d). He has never denied

that he failed to file tax returns for the years in issue, and he

has asserted that he was not required to file them because he did

not have enough income.

 Before trial, petitioner sent to the Court a series of

frivolous and untimely discovery motions. He served on

respondent’s counsel requests for admissions seeking admissions

of his claimed deductions without any substantiation or even

identification of the year or amounts of the claimed deductions. 
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When the case was called for trial, petitioner filed a

motion in limine repeating his demands for discovery and

requesting that respondent be denied the opportunity to admit

evidence not made available to him before January 15, 2010, one

of the many errors made by petitioner in interpreting deadlines

for discovery under the Tax Court Rules and for the exchange of

documents under the standing pretrial order. Petitioner,

however, did not have any records relating to his claimed

employee expenses or other itemized deductions with him at trial. 

He requested more time to present them. He was advised that he

could present any additional documents to respondent’s counsel

and move to reopen the record within 30 days for further

stipulations or concessions.

Because of inconsistencies in the record concerning

petitioner’s mortgage interest expense for 2006, the Court

ordered the parties to report as to any additional documents

produced by petitioner after trial to substantiate his deductions

and to report as to the correct allowance for mortgage interest

expense for 2006, allocated between interest allowable on

Schedule A, Itemized Deductions, as an itemized deduction and

interest allowable on Schedule E, Supplemental Income and Loss,

as rental expense. On or about April 21, 2010, petitioner

submitted to respondent another list of the amounts that he

claimed as itemized deductions and some check records reflecting
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charitable contributions. He did not move to reopen the record. 

Respondent made additional concessions of mortgage interest

deductible as rental expense for 2006 but made no further

concessions based on the belatedly tendered documents that did

not substantiate any deductions exceeding the standard deduction

allowed for each year.

Discussion

Throughout the history of these cases, petitioner has

asserted erroneous legal arguments while asking that his

procedural defaults be excused on the grounds that he is not

legally trained. He has misconstrued deadlines and complained

of, rather than complied with, instructions about how he could

cure his defaults. He has pursued irrelevant discovery from

respondent in a case where the relevant facts are solely within

his knowledge and control. He has apparently copied his

petitions and various motions from an unreliable source.

Petitioner has the burden of proving his entitlement to

deductions. See New Colonial Ice Co. v. Helvering, 292 U.S. 435,

440 (1934); Rockwell v. Commissioner, 512 F.2d 882 (9th Cir.

1975), affg. T.C. Memo. 1972-133. He is not entitled to have the

burden of proof shift to respondent because he has failed to

substantiate the items, has failed to maintain required records,

and has failed to introduce credible evidence with respect to the
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deductions (apart from those respondent has conceded). See sec.

7491(a).

Rather than pursuing the straightforward approach of

substantiating his claimed deductions, petitioner has engaged in

obstructive tactics and has ultimately failed to prove any

deductions beyond those allowed by the Appeals Office. 

Specifically, he has failed to show that he has any itemized

deductions for 2004, 2005, or 2006 that in total would exceed or

even equal the standard deduction that he has been allowed for

each year.

At trial and in his subsequent submission, petitioner

asserted that he is entitled to deductions for uniforms, out-oftown meals, cellular phone usage, vehicle expenses, and

charitable contributions. He acknowledged that he had no

receipts for any of the items claimed and specifically that he

had no records of out-of-town meals, cellular phone usage, or

business mileage.

Petitioner asserts that his estimates of various expenses

should be accepted without substantiating documents. See Cohan

v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1939). Those that

may be accepted based on estimates are less than amounts he

previously claimed, are less than amounts accepted by the Appeals

Office, and, even when combined with substantiated home mortgage

expenses and uniform expenses accepted by the Appeals Office, are
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less than the standard deductions allowed for each year. 

Moreover, items subject to special statutory substantiation rules

may not be allowed without compliance with those rules.

To be entitled to a deduction for uniforms, petitioner would

have to show the amounts spent for special clothing not suitable

for ordinary street wear. See Yeomans v. Commissioner, 30 T.C.

757, 767-769 (1958); Alami El Moujahid v. Commissioner, T.C.

Memo. 2009-42. He has not done so. To be entitled to employee

business expense deductions for out-of-town meals, cellular phone

usage, and vehicle expenses, he would have to substantiate the

amount, time, place, and business purpose of each item in

accordance with sections 274(d) and 280F(d)(1) and (4). He has

not produced any of the required substantiation, and no amounts

in excess of the standard deductions for each year are allowable.

Under section 7491(c), respondent has the burden of

production with respect to the additions to tax. As applicable

in these cases, the addition to tax under section 6651(a)(1) for

failure to file a tax return is 5 percent of the tax required to

be shown on the return for each month or fraction of a month

during which the failure continues, not exceeding 25 percent in

the aggregate. Respondent has produced transcripts reflecting

petitioner’s failure to file the returns in issue here, and

petitioner has acknowledged that failure. Petitioner’s only

tendered excuse for failing to file returns is his claim that he
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had insufficient income, but the wages exceeding $40,000 that he

received each year were far in excess of the minimum amount of

gross income requiring a return for each year (generally, for

single individuals, $7,950 for 2004, $8,200 for 2005, and $8,450

for 2006). See sec. 6012(a). He has not shown reasonable cause

for nonfiling, and the additions to tax under section 6651(a)(1)

will be sustained. See, e.g., Higbee v. Commissioner, 116 T.C.

438, 447-448 (2001).

The evidence at trial included a transcript of petitioner’s

account for 2003 as well as evidence of petitioner’s nonfiling

for 2003 and the years in issue. Because he failed to file

returns for those years, estimated payments of 90 percent of his

tax due for each year in issue were required and, because they

were not made, an addition to tax applies. See sec. 6654(a),

(d)(1)(B). Respondent’s burden of production has been met, and

petitioner has not asserted, and the record does not suggest,

that any exception to this addition to tax is applicable. See

Grosshandler v. Commissioner, 75 T.C. 1, 20-21 (1980). 

Respondent did not request a penalty under section 6673, and

we have decided not to impose one sua sponte. Petitioner has,

however, pursued frivolous and groundless arguments. He is

cautioned that such a course in future proceedings may result in

a penalty against him in an amount not to exceed $25,000. 

Moreover, other sanctions may also be applicable for
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noncompliance with his tax obligations. See Cook v.

Commissioner, T.C. Memo. 2010-137, filed this date.

To reflect the foregoing,

Decisions will be entered

under Rule 155.