TAX COURT OPINION

Case: Arthur & Diane Cribbs Moore
Docket Number: 19782-10S
Judge: Goeke
Opinion Type: bench
Filed: 06/27/2011
Pages: 5

UNITED STATES TAX COURT WA SHINGTON, DC 20217 ARTHUR AND DIANE CRIBBS MOORE, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) ) ) O R D E R Docket No. 19782-10S. 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 petitioners and to respondent a copy of the pages of the transcript of the trial in the above case before Judge Joseph Robert Goeke at Tampa, Florida, on June 10, 2011, containing his oral findings of fact and opinion rendered at the conclusion of the trial. In accordance with the oral findings of fact and opinion, a decision will be entered for respondent. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. June 27, 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 ROBERT JOSEPH GOEKE, ARTHUR and DIANE CRIBBS MOORE v. COMMISSIONER DOCKET NO.: 19782-10S DATE: June 10, 2010 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 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 and the opinion shall not be treated as precedent for any other case. The present case is before the Court based upon our jurisdiction to review Respondent's deficiency determinations upon the timely filing of a petition after Respondent's issuance of a Notice of Deficiency. Respondent determined the deficiency for the taxable year 2008 against the Petitioners in the amount of $4,353. The sole issue in this Notice of Deficiency is inclusion of taxable dividends in the amount of $4,044, all of which Petitioners received 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 from Publix Supermarkets, Inc. The parties stipulated the Notice of Deficiency and the Petitioners' income tax returns, and Petitioners presented their legal argument at trial, that their dividends should be excluded from income based upon Petitioners' analysis of Publication 17, page 64, which provides for the treatment of distributions of stock and stock rights. In describing that treatment the language of Publication 17 has, in (1) the statement as follows: "You or any other shareholder has the choice to receive cash or other property instead of stock or stock rights." This statement follows the language of Publication 17 which reads as follows: "Distribution of stock dividends and stock rights are taxable to you if any of the following apply." While Petitioners did receive dividends in cash, this would imply that their dividends were taxable based upon the Court's reading of Publication 17. However, the Court, in deference to the Petitioners' argument, reviewed the underlying provisions of the Internal Revenue Code to see whether Section 305, dealing with distributions of stock and stock rights, would in fact relieve Petitioners of 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 their obligation to include the dividends. We note that under Section 61(a) (7) dividends are included in income. However, certain dividends in kind or dividends of stock are excluded. But after careful review of Section 305 the Court determines that the dividends in question in this case are not dividends of stock or stock rights, but, rather, cash dividends which clearly are included in gross income based upon Section 61. Given that determination the Court is left with no option but to rule for Respondent in this case and uphold the deficiency as determined in the Notice of Deficiency. We appreciate Petitioners sincere effort' to understand their tax obligations and interpret Publication 17, and in this regard it's possible that Publication 17 could have been clearer relative to the underlying points raised by the Petitioners. However, we believe that Section 61 is clear in this regard and is not in any way altered as to its result of the inclusion of the dividends and income by Section 305 or any other provision of the Internal Revenue Code. Therefore, a decision will be entered for Respondent. This concludes the Court's oral findings of fact and opinion in this case. 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 (Whereupon, at 1:49 p.m., the bench opinion in the above-entitled matter was concluded.) 6 // // // // // // // // // // // // // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888