TAX COURT OPINION

Case: Jimmy Lui
Docket Number: 18883-07
Judge: Colvin
Opinion Type: bench
Filed: 12/09/2008
Pages: 5

UNITED STATES TAX COURT WASHINGTON, D .C . 2021 7 JIMMY LUI, Petitioner v . ) Docket No . 18883-07 COMMISSIONER O F INTERNAL REVENUE, Respondent O R D E R STAT . Pursuant to Rule 152(b), Rules of Practice and Procedure of this Court, there is transmitted herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above case before Judge Stephen J . Swift, at Los Angeles, California, on November 17, 2008, 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 n order and decision will be entered for respondent . K DATED : Washington, D .C . December 9, 2008 (Signed) Stephen J . Swift Judge SERVED DEC 10 2008 3 1 Bench Opinion by Senior Judge Stephen J . Swif t 2 Jimmy Lui v . Commissioner Docket No . :18883-07 3 November 17, 200 8 4 The Court is going to render a bench opinion 5 in this case, and the following constitutes ora l 6 findings of fact and conclusions of law . 7 This case involves a federal income ta x 8 deficiency determined against Petitioner Jimmy Lui in 9 the amount of $5,765 and an accuracy-related penalty, 10 under Section 6662(a), of $1,153 . 11 The taxpayer Petitioner worked for Point 12 360, a company here in the Los Angeles area, durin g 13 2003, and was paid substantial sums in connection w-i-- - 14 therewith . The evidence indicates that he was paid 15 approximately $44,000 during 2003 for his work or 16 labor for Point 360 . The company reported thos e 17 payments on a W-2 as wage income . The Petitione r 18 reported those amounts on the initial document filed 19 as a federal income tax return for 2003 a s 20 W-2, "Other Income . " 21 On that initial document filed with the IRS, 22 however, offsetting deductions were taken, effectively 23 eliminating the taxability of the $44,000 . Th e 24 offsetting deduction was reported as fiduciar y 25 expenses, essentially eliminating the tax liability on Heritage Reporting Corporatio n (202) 628-4888 4 1 the $44,000 . 2 The IRS did not process that original return 3 and assessed a $500 frivolous return penalt y 4 associated with it, or that penalty may have bee n 5 assessed with a second return, a later-filed return . 6 At any rate, eventually, a $500 frivolous return 7 penalty was assessed by the IRS . 8 The taxpayer filed a second document for his 9 2003 tax return . This document was filed in 2005 . 10 Thereon the taxpayer attached a W-2 and reported wages 11 of only $10,000 and claiming a refund of $3,135 . 12 This document also c .S -falsely claime d . rv b~ S 13 that $10,280 in taxes had been withheld from his wages 14 in 2003 while the employer's records show that onl y 15 $6,863 .77 was actually withheld during 2003 as federal 16 income taxes on payments made to the Petitioner fo r 17 his services . 18 Later, the taxpayer filed a third document 19 as his federal income tax return for 2003, or as an 20 amended 2003 federal income tax return, on which he 21 reported gross income of zero, federal income tax 22 withheld of 10,287, which amount was then reduced by 23 $6,864, and attached to this third document for 2003 24 was a Form 4852, "Substitute for W-2," on which 2003 25 wages of taxpayer were reported as zero . Heritage Reporting Corporation (202) 628-4888 5 1 The records, employment records, of Point 2 360 have been subpoenaed, are in court, and i n 3 evidence, and they indicate Petitioner received wage 4 income in 2003 from Point 360 of approximatel y 5 $44,000 . 6 Petitioner here makes frivolous arguments as 7 to the taxability of payments he received from Poin t 8 360 . 9 On the evidence before us, it is clear that 10 the law is clear that the taxpayer owes federal income 11 taxes in the amount determined by Respondent, $5,765, 12 on the wages he received, or the payments he received, 13 in 2003 from Point 360 . 14 We sustain the tax deficiency . We sustain 15 the accuracy-related penalty . We also impose on the 16 taxpayer a penalty, under Section 6673, in the amount 17 of $1,000, on the Court's own initiative, based on the 18 fact that this lawsuit and the taxpayer's argument s 19 are completely without merit, are frivolous, are ill 20 advised, and most unfortunate . 21 The Court encourages the taxpayer, Mr . Lui 22 here, to try to come to his senses, to get rid of his 23 advisers and others who are so misinforming him and 24 leading him astray that he is digging a serious and 25 deep tax hole for himself that may take him years t o Heritage Reporting Corporation (202) 628-4888 6 1 get out of . 2 So I encourage you, Mr . Lui , to do what you 3 need to do to come to your senses and start paying your A 4 tax liabilities on time with timely tax returns . I 51S 5 hope that, for later years, you haven't done the same 6 thing you did for 2003 . You should be paying you r 7 taxes on time, on your income, on your wages, on your 8 salary, on your fees for your services, whatever yo u 9 want to call them, just like everyone else here in the 10 courtroom, or, at least, most everyone else here in 11 the courtroom . 12 And if you don't start doing it, you'r e 13 going to find yourself so far behind and so deep in 14 debt to the IRS for your federal taxes that it will 15 literally take you the rest of your lifetime t o 16 recover . 17 This concludes the Court's oral findings o f 18 fact and opinion in this case . Thank you all for your 19 time . 20 (Whereupon, at 2 :20 p .m ., the bench opinio n 2 1 2 2 2 3 2 4 25 in the above-entitled matter was concluded .) / I /I Heritage Reporting Corporation (202) 628-4888