TAX COURT OPINION

Case: Frank John Feela & Carole Ann Feela
Docket Number: 17111-18
Judge: Goeke
Opinion Type: bench
Filed: 10/02/2020
Pages: 5

UNITED STATES TAX COURT WASHINGTON, DC 20217 FRANK JOHN FEELA & CAROLE ANN FEELA, Petitioner(s), v. ) ) ) ) ) ) Docket No. 17111-18. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORDER 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 containing his oral findings of fact and opinion rendered at the remote St. Paul, Minnesota trial session at which this case was heard. 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. October 2, 2020 SERVED Oct 05 2020 1 2 3 4 5 6 7 8 9 Bench Opinion by Judge Joseph Robert Goeke september 22, 2020 Frank John Feela & Carol Ann Feela v. Commissioner Docket No. 17111-18 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 10 opinion is rendered pursuant to Rule 152 of the Tax Court 11 Rules of Practice and Procedure, and section 7459(b) of 12 13 14 15 the Internal Revenue Code. Section codes here and after cchemus are to the Internal Revenue Code as applicable to this case. Our jurisdiction over the present case is 16 Provided by section 6213(a) as this is a case that is 17 Petitioned by the Taxpayer after the receipt of a Notice 18 of Deficiency. The Petitioners in this case received a 19 Notice of Deficiency for the years 2014 and 2015, which 20 began our jurisdiction over this case. The parties have 21 22 23 24 agreed to certain stipulated paragraphs and stipulated documents and the Petitioner husband, Mr. Feela, testified. The Notice of Deficiency issued by Respondent 25 asserted deficiencies in income tax for 2014 in the amount Cribers 1 2 3 4 5 6 7 8 9 10 11 of $29,443 and for 2015 in that amount of $27,589. The Notice of Deficiency also assertedAaddition to tax under section 6651(a)(1) in the amount of $7,360.75 for 2014 and $6,633.75 for 2015. Finally, the Notice of Deficiency asserted the addition to tax under section 6662(a) in the amount of $5,888.60 for 2014 and $5,517.80 for 2015. The Parties have subsequently agreed to reduced amounts of deficiencies in this case, and the deficiencies are no longer at issue. The parties have agreed to a deficiency in the amount of $2,962 for 2014 and $6,602 for 2015. Only the additions to tax remain in dispute. 12 Petitioner asserts reasonable cause as a defense to these 13 additions to tax, and Petitioner also claims that 14 Respondent has failed to properly obtain supervisory 15 16 17 approval with respect to the addition to tax under section 6662(a). We do not reach that issue, because we focus on the application of section 6664(c) and the question of 18 whether the Petitioner had reasonable cause for the 19 understatement of tax in and 2015, which would atc 20 alleviate the application of 6662(a). Petitioner, 21 22 23 24 husband, testified he gave his return preparer of 25 years the QuickBooks of his business, and he relied upon that return preparer to compute the correct amounts of expenses he was entitled to. We know that this activity by the 25 return preparer did not involve a complex analysis of the Cribers 1 2 3 4 5 6 7 8 9 tax law, but really was more of an accounting analysis and that Petitioner had come to trust his return preparer because of his involvement in Petitioner's return for over 25 years. We note that Respondent and Petitioners have agreed to a dramatically reduced deficiency amount from the amount originally associated with the Notice of Deficiency. Given the record as a whole, and the testimony of Petitioner husband, we do find that 10 Petitioner's reliance on the return preparer for the 11 activities associated with this income tax return were 12 13 14 15 16 17 reasonable, and we do not uphold the application of the 6662 addition to tax. Regarding the additions to tax under sections 1 6651(a)(1), we find the Petitioners did not have reasonable cause for the late filings of their returns for 2014 and 2015, and we uphold the section 6651(a) addition 18 to tax for both years as applicable to the revised 19 deficiency amendments. 20 The parties have stipulated that the 21 Petitioners' returns for 2014 and 2015 were both filed on 22 January 25th, 2017, which is quite delinquent from the 23 actual return due dates. As we previously stated we do 24 not analyze the question of whether the penalty approval 25 form was timely executed by the supervisor of the Revenue 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 agent assigned to Petitioner's case, as we have determined that the additions to tax associated with that form are not applicable, because of reasonable cause. Given the parties eeneseeaen of the deficiency and our analysis of Schwd . the additions to fact a Rule 155 computation will be necessary in this case. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 1:25 p.m., the above-entitled matter was concluded.) BEIEE