TAX COURT OPINION

Case: Bruce L. Nase
Docket Number: 15509-10S
Judge: Goeke
Opinion Type: bench
Filed: 06/22/2011
Pages: 5

UNITED STATES TAX COURT WASHINGTON, DC 20217 BRUCE L . NASE , Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) ) ) O R D E R Docket No. 15509-10S. Pursuant to Rule 152.(b) , Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to Petitioner and to respondent a copy of the transcript of the trial in the above case before Judge Joseph Robert Goeke at Tampa, Florida, on June 9, 2011, containing his oral findings of fact and opinion rendered at the conclusion of the pages of the trial. In accordance with the oral findings of fact and opinion, a decision will be entered under Rule 155. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. June 22, 2011 mgo JUN 242011 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 Joseph Robert Goeke June 9, 2011 Bruce L. Nase v. Commissioner Docket No.: 15509-10S THE COURT: The Court has decided to render oral findings of fact and opinion in 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 case was heard pursuant to the provisions of Section 7463 of the Internal Revenue Code in effect at the time the petition was filed. Pursuant to Section 7463(b) the decision to be entered is not reviewable by any other court . Section references after this are to the Internal Revenue Code in.effect for the years at issue, and Rule references are to the Tax Court Rules of Practice and Procedure. This case involved a deficiency determination by the Respondent for the years 2006 and 2007. Respondent determined income tax deficiencies for those years in the amount of $11, 441 and $3, 608 respectively. Respondent also determined additions to tax under Sections 6651(a) (1), 6651(a) (2) and Section 6654 (a) . These additions to tax relate to the fact 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 4 that the Petitioner did not file Federal Income Tax Returns for 2006 and 2007, and underpaid his Federal Income Tax returns for those years. And, finally, that the Petitioner failed to make estimated tax payments for both the years, 2006 and 2007. The Petitioner was a Florida resident at the time he filed the petition in this case. Petitioner's Federal Income Tax returns for 2006 and 2007 were filed both on August 24th, 2010, well after the due dates of the returns in question. On those delinquent returns the Petitioner reported the income determined by Respondent in this case, which was wage income and income from gambling winnings . But the Petitioner also took gambling losses on Schedule A as itemized deductions in the amount of the gambling winnings for both of the years in question. At trial Petitioner did not contest either of the income items, rather he, in a very candid and straightforward way, described his gambling problem, which is significant. We also noted at trial that the gambling winnings were not in large amounts but rather in smaller segments over the course of the two years in question. Petitioner's testimony, that upon winning these monies he would simply revert to his gambling habit and lose the money to the extent of 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 25 5 winnings, was credible. Therefore, we determine that Petitioner is entitled to the Schedule A deductions he claimed on his delinquent returns for 2006 and 2007 for gambling losses to the extent of his gambling winnings. Since Petitioner does not contest the income items the only remaining issues are whether Petitioner is liable for the penalties for failure to file on time and for failure to pay tax, as well as the estimated tax penalty. While we are sympathetic to Petitioner's gambling habit and we understand t that is the primary reason for his delinquencies and his failure to pay, there's no precedent that such an addiction should relieve Petitioner from his obligation to timely file a Federal Income Tax return and pay the required tax, nor does it relieve the Petitioner from his obligation to make estimated tax payments. Petitioner did not present any evidence that he was subject to an exception to the requirements that he make estimated tax payments and specifically did not maintain that his 2005 tax situation alleviated his obligation to make estimated tax payments in 2006. While we appreciate Petitioner's candor and 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 we are sympathetic to his problem, we do not find that his situation in 2006 and 2007 provides reasonable cause for his failure to timely file Federal Income Tax returns for those two years, and, therefore, we uphold the additions to tax to the extent that they will be applicable to the revised deficiencies determined after the allowance of the itemized deductions for Petitioner's gambling losses. Given these determinations a Rule 155 computation will be necessary. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 9:09 a.m., the bench opinion in the above-entitled matter was concluded.) // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888