TAX COURT OPINION

Case: James Back
Docket Number: 178-10
Judge: Vasquez
Opinion Type: bench
Filed: 07/18/2011
Pages: 6

UNITED STATES TAX COURT WASHINGTON, DC 20217 JAMES BACK, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) ) ) O R D E R Docket No. 178-10. Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith the to petitioner and to respondent a copy of transcript of Vasquez at Palmer, Alaska (Anchorage) , on June 16, 2011, containing his oral conclusion of the trial in the above case before Judge Juan F. the pages of the trial. findings of fact and opinion rendered at the In accordance with the oral findings of the decision will be entered for respondent. fact and opinion, (Signed) Juan F. Vasquez Judge Dated: Washington, D.C. July 18 , 2011 SENVED Jyt 19 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 BENCH OPINION BY JUDGE JUAN F. VASQUEZ JUNE 16, 2011 JAMES BACK v. COMMISSIONER DOCKET NO. 178-10 THE COURT: Thank you. The court has decided to render oral findings of fact and opinion on this case, and the following represents the Court's oral findings of fact and opinion. The oral findings of fact and opinion shall not be relied upon as precedent in any other case. This is the case of James Back, petitioner, versus Commissioner of the Internal Revenue, respondent, docket number 178-10. This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. All section references are to the Internal Revenue Code as in effect for the year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. Respondent determined a deficiency against petitioner for his 2007 taxable year in the amount of $29,694.00 and an accuracy-related penalty under section 6662(a) in the amount of $7,567.00. At trial respondent also moved for a penalty against petitioner under section 6673. None of the facts have been stipulated. At the time the petition was filed, petitioner was a Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 resident of Soldotna, Alaska. In general, respondent's determinations in the notice of deficiency are entitled to a presumption of 4 correctness, and petitioner bears the burden of rebutting that presumption by a preponderance of the I evidence. Welch v. Helvering, 290 U.S. 111 (1933); Rule 142(a). Petitioner has failed to meet the requirements of section 7491(a), and therefore the burden of proof remains on petitioner. The Court must decided the following issues: (1) Whether petitioner received $123,973.00 in wages from Alyeska Pipepine Service Co. that he failed to i-nclude in taxable income; (2) whether petitioner received $1,654.00 in other income from the State of Alaska-Department of Revenue Permanent Dividend Fund of which he failed to include $1,422.00 in taxable income; (3) whether petitioner received $1,246.00 in capital gain dividends from E Trading Clearing, LLC, of which he failed to include $1,122.00 in taxable income; (4) whether petitioner received $513.00 in taxable dividends from E Trading Clearing, LLC, of which he failed to include $238.00 in taxable income; (5) whether petitioner is liable for the section 6662(a) accuracy-related penalty; and (6) whether petitioner is liable for penalties -- for a penalty Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 5 under section 6673. In the instant case, petitioner has offered no credible evidence that shows that respondent's determinations are incorrect. At trial, although petitioner admitted to receiving these amounts of "monies" from Alyeska Pipeline Services Co., the State of Alaska Department of Revenue Dividend Fund, and E Trading Clearing, LLC, he advanced only frivolous and groundless arguments. For instance, at trial he argued that the $123,973.00 in "monies" that he received from Alyeska Pipeline Service Co. are for his labor and therefore not taxable. The Court need not address each of petitioner's frivolous and groundless arguments with somber reasoning and copious citations of precedent, as, to do so, might suggest that these arguments pose some degree of colorable merit. Crain v. Commissioner, 737 F.2d 1417 (5th Cir. 1984); Wnuck v. Commissioner, 136 T.C. No. 24 (2011). In sum, we find that petitioner's contentions are wholly without merit. Consequently, we sustain respondent's determinations of tax in full. As to the accuracy-related penalty, section 7491(c) requires that respondent produce evidence that is appropriate to impose the penalty. Once respondent Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 6 meets his burden of production, however, petitioner bears the burden of proving that respondent's determinations are incorrect. Higbee v. Commissioner, 116 T.C. 438, 446 (2001); Rule 142(a). The record shows that respondent has met his burden of production on this case. In his testimony, petitioner failed to offer any credible evidence. Consequently, we sustain respondent's imposition of the accuracy-related penalty. Section 6673(a) (1) provides that this Court may require the taxpayer to pay a penalty not in excess of $25,000 whenever it appears to this Court that the proceedings were instituted or maintained by the taxpayer primarily for delay or the taxpayer's position is frivolous or groundless. Although we refrain from imposing the penalty at this time, we take this opportunity to warn petitioner that we may impose this penalty if he returns to the Court and proceeds in a similar manner in the future. See Pierson v. Commission, 115 T.C. 576 (2000) . Respondent's motion to impose a penalty is denied. To reflect the foregoing, decision will be entered for respondent reflecting a deficiency of $29,69)?'.00 and an accuracy-related penalty in the amount of $7,567.00. The foregoing represents the Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2s 7 Court's oral findings of fact and opinion in this case. This concludes the case. Thank you. This concludes this session of the U.S. Tax Court in Anchorage, Alaska, which was actually held in Palmer, Alaska. We thank you. We thank the -- actually it was the Superior Court for this wonderful facility they provided with us. Thank you, Mr. Reed and Mr. Baker, thank you. THE CLERK: All rise . (Whereupon, at 10:25 a.m., the bench opinion in the above-entitled matter was concluded.) // // // // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888