TAX COURT OPINION

Case: Thomas Gene & Karen Ann Prince
Docket Number: 9429-09
Judge: Colvin
Opinion Type: bench
Filed: 11/30/2009
Pages: 6

UNITED STATES TAX COURT WASHINGTON, D .C . 2021 7 THOMAS GENE AND KAREN ANN PRINCE, Petitioners , v . Docket No . 9429-0 9 COMMISSIONER OF INTERNAL REVENUE , Respondent . O R D E R Pursuant to Rule 152(b), Tax Court . Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewit to petitioners and to respondent a copy of the pages of the transcript of the trial of the above .case before Special Trial Judge Lewis R . Carluzzo at Atlanta, Georgia, on October 21, 200 containing his oral findings of fact and opinion rendered at. thE conclusion of trial . In accordance with the oral findings of fact and opinion, an appropriate order granting/respondent's oral motion, and granti g in part and denying in part what is now treated as respondent's motion for summary judgment will be entered, and order and decision will be entered for respondent . (Signed) Lewis R. Carluzzo Special Trial Judg e Dated : Washington, D .C . November 30, 2009 SERVED N 3 0 2009 1 Bench Opinion by Special Trial Judge Lewis R . Carluzzo 2 Docket Number 9429-09 October 21, 200 9 3 Thomas Gene & Karen Ann Prince v . Commissione r 4 5 The Court has decided to render oral findings of fact 6 and opinion in this case, and the following represents 7 the Court's oral finding of fact and opinion . Thi s 8 oral findings of fact and .opinion shall not be cite d as authority in any other case . 10 Section references contained in this benc h 11 opinion are to the Internal Revenue Code of 1986, as 12 amended, in effect for 2006 . Rule references are to 13 the Tax Court Rules of Practice and Procedure . 14 This proceeding for the redetermination of a 15 deficiency is conducted pursuant to the provisions of 16 section 7443A(b)(3) and-Rules 180, 181, and 182 . This 17 bench opinion is made pursuant to the authorit y 18 granted by section .7459(b) and Rule 152 . 19 This case is before the Court o n 20 Respondent's motion to dismiss for failure to state a 21 claim upon which relief can be granted, filed June 12, 22 2009 (Respondent's motion), and Respondent's ora l 23 motion to dismiss for lack of prosecution, made on 24 October 20, 2009 (Respondent's oral motion) . .25 Petitioners' objection to Respondent's motion was Heritage Reporting Corporatio n (202) 628-4888 3 1 filed July 21, 2009 . 2 A hearing was conducted on Respondent' s 3 motion in Atlanta, Georgia, on October 19, 2009 . The 4 parties appeared at the hearing and were heard ; 5 Petitioners appeared pro sese and Respondent appeared 6 through his attorney, Kristen I . Nygren . Ms . Nygren 7 again appeared on behalf of Respondent when the case 8 was called for trial, but there was no appearance at 9 that time by or on behalf of Petitioners . 10 The relevant facts necessary to th e 11 resolution of Respondent's motion and oral motion are 12 easily summarized . In a notice of deficiency date d 13 January 12, 2009 (the notice), Respondent determined a 14 deficiency in and an accuracy-related penalty wit h 15 respect to Petitioner's 2006 Federal income tax . The 16 deficiency is computed with reference to specifi c 17 various items of income attributed to one or the other 18 Petitioner, but not reported on Petitioners' timel y 19 filed joint 2006 Federal income tax return . 20 Petitioners now admit to the receipt of all of those 21 items of income . 22 In their petition and again at the hearing, 23 Petitioners challenge the deficiency on two grounds : 24 (1) According to Petitioners, Respondent does not have 25 the authority to change their 2006 Federal , income tax Heritage Reporting Corporation (202) 628-4888 4 1 return ; and (2) noting that all but one of the 2 adjustments made in the notice suggest tha t 3 Petitioners were employees of various employers . And 4 although they now admit that each of them performe d 5 services for the various employers identified in the 6 notice and were compensated for doing so, neither was, 7 in their misguided opinions, an "employee" (a s 8 Petitioners define the term) of any of them . 9 Petitioners' first position is rejected 10 without further comment . As for their secon d 11 position, it matters not for purposes of this case 12 whether either Petitioner was or was not an employee 13 of the employer that compensated them for thei r 14 services . See sec . 61(a) . Having admitted to having 15 received the compensation attributed to each in the 16 notice, those items of income should have bee n 17 included in the income reported on their 2006 Federal 18 income tax return, and with one exception , 19 Respondent's adjustments to that end are sustained . 20 The exception is the adjustment evidenced in the 21 notice by a Form 1009-R (the pension distribution .) 22 Petitioners do not know if any portion of the pension 23 distribution represents any investment in th e 24 contract . See sec . 72 . At the hearing, trial on this 25 adjustment was set for a time and date certain of 1 :30 Heritage Reporting Corporation (202) 628-4888 1 p .m . on October 21, 2009, in Atlanta, Georgia . We 2 note that Petitioners did not dispute the imposition 3 of the accuracy-related penalty in their petition . 4 Consequently, we proceed as though they have conceded 5 that item . 6 Because Petitioners' admissions constitute a 7 "matter" outside of the petition, Respondent's motion 8 will be treated as a motion for summary judgment . See 9 Rules 40 and 121 . So construed, so much o f 10 Respondent's motion as relates to the adjustments 11 contained in the notice, with the exception of the 12 pension distribution, will be granted and so much of 13 Respondent's motion as relates to the pensio n 14 distribution will be denied . 15 As noted, there was no appearance by or on 16 behalf of Petitioners when'the case was called for 17 trial in Atlanta on October 20, 2009 . The trial time 18 and date were set it Petitioners' presence and neither 19 expressed any objection to the time or date o r 20 scheduled . Apparently, Petitioners notifie d 21 Respondent's counsel that they did not intend to 22 appear for trial . 23 As it stands, it is Petitioners' burden to 24 establish that the pension distribution should b e 25 reduced to account for any previously portion of that Heritage Reporting Corporatio n (202) 628-4888 .! L 6 1 distribution that might have been previously taxes . 2 Rule 142 ( a) . There has been no evidence introduced in 3 support of that burden , and Respondent concedes n o 4 error with respect to the pension distribution 5 adjustment . 6 Respondent ' s motion to dismiss for lack of 7 prosecution will be granted . 8 To reflect the foregoing , an appropriate 9 order granting Respondent's oral motion, and granting 10 in part and denying in part what is now treated a s 11 Respondent ' s motion for summary judgment will b e 12 issued , and decision will be entered for Respondent . 13 This concludes the Court's oral findings of 14 fact and opinion in this case . 15 (Whereupon , at 1 :40 p .m ., the bench opinion 16 in the above - entitled matter was concluded . ) 17 18 19 20 2 1 22 2 3 24 25 Heritage Reporting Corporation (202) 628-4888