TAX COURT OPINION

Case: Timothy Roy Nuss
Docket Number: 22655-17S
Judge: Carluzzo
Opinion Type: bench
Filed: 11/09/2018
Pages: 6

RS UNITED STATES TAX COURT WASHINGTON, DC 20217 TIMOTHY ROY NUSS, Petitioner, v. ) ) ) ) Docket No. 22655-17S 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 petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Chief Special Trial Judge Lewis R. Carluzzo at Las Vegas, Nevada, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Lewis R. Carluzzo Special Trial Judge Dated: Washington, D.C. November 9, 2018 SERVED Nov 09 2018 Bench Opinion by Special Trial Judge Lewis R. Carluzzo 3 October 31, 2018 Timothy Roy Nuss v. Commissioner of Internal Revenue Docket No. 22655-17S 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. (Bench opinion) Section references made in this bench opinion 1 2 3 4 5 6 7 8 9 10 are to the Internal Revenue Code of 1986 as amended in 11 effect for the relevant period, and rule references are to 12 the Tax Court Rules of Practice and Procedure. This bench 13 opinion is made pursuant to the authority granted by 14 15 section 7459(b) and Rule 152, This proceeding for the redetermination of a 16 deficiency is a small tax case subject to the provision of 17 section 7463 and Rules 170 through 175. Except as 18 provided in Rule 152(c) this bench opinion shall not be 19 cited as authority and pursuant to section 7463(b) the 20 decision entered in this case shall not be treated as 21 precedent for any other case. 22 This case was tried in Las Vegas, Nevada on 23 October 30, 2018. Michael Thomas Garrett appeared on 24 behalf of respondent. There was no appearance by or on 25 behalf of petitioner. The evidence consists entirely of (973)406-2250|opetationseescribersnet|www.escribetsnet facts and exhibits included in a stipulation of facts 4 signed by petitioner on October 15, 2018, and respondent on the day of trial. The facts recited below are based upon unopposed allegations made in the petition, the stipulated facts and exhibits, and reasonable inferences drawn from those documents. At the time the petition was filed, petitioner was a resident of Nevada. In the Notice of Deficiency dated August 14, 2017 (Notice) respondent determined a 1 2 3 4 5 6 7 8 9 10 deficiency in petitioner's 2015 Federal income tax. 11 Petitioner attached a copy of the notice (without 12 13 attachments) to the petition. The deficiency results from (1) One or more distribution from petitioner's retirement 14 plan (pension distributions) administered by Metropolitan 15 Life Insurance Company (Met Life) and (2) Taxable interest 16 17 18 19 from the Clark County Credit Union. As best we can determine from a review of petitioner's 2015 Federal Income Tax Return (return) the income reported on that return does not include the interest or the pension 20 distributions identified in the notice. 21 A fair reading of the petition shows that 22 petitioner does not challenge respondent's adjustment with 23 24 25 respect to interest, and we proceed as though petitioner has conceded that adjustment. According to the petition, the pension distribution should not be included in f»73J406-2250|opentionseerrbertnet|www.esoibers.net 5 petitioner's 2015 income because any Federal income tax liability that could result from a distribution from his retirement plan has been paid in previous years. The issue for decision is whether the pension distributions are includable in petitioner's 2015 income. According to a form W-2 wage and tax statement included with petitioner's return, petitioner was employed by the Clark County School District and was covered by a "retirement plan", but we cannot tell from what has been submitted the type of retirement plan so referenced. The evidence shows the retirement plan was administered through an account maintained by Met Life but, with exceptions noted below, we have no information regarding the transaction history of the account from whatever unknown date it was established until the date it was closed in 2015, the year here in issue. A September 1, 2015 Met Life statement shows that as of August 28, 2015 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 petitioner had a $6,195.37 outstanding loan balance, 19 20 21 including principal and interest stemming from a $2,400 loan he made from his Met Life Retirement Plan on March 26, 1996, and because petitioner failed to repay the loan 22 when due, Met Life considered the loan to be in "full 23 default" and closed the account. 24 In the petition petitioner acknowledges receipt 25 of forms 1099-R that Met Life apparently issued with cnbers (973)406-2250|operationsgescribertnet|wwwiscribers.net respect to the pension distributions, but as noted claims 6 that he paid any Federal Income Tax due as a result in prior years. As we view petitioner's position he does not seem to dispute the general principles that the term "income" as used in the Internal Revenue Code means all income from whatever source derived, including distributions from a pension. Section 61(a)(11), 72 and 402(a). Or that for purposes of section 72 the term "distributions" includes proceeds of a defaulted loan from 1 2 3 4 5 6 7 8 9 10 various types of retirement accounts. See Section 72(q), 11 Perry v. Commissioner, T.C. Memo 2018-90. 12 Instead, petitioner seems to dispute only the 13 year the pension distributions should be considered 14 includable in his income. Nothing in evidence or 15 otherwise in the record, however, identifies what year he 16 had in mind when he prepared the petition. In general, 17 determinations made in a Notice of Deficiency are presumed 18 19 20 21 correct, and the petitioner has the burden of proving it to be wrong. Welch v Helvering, 290 U.S. 111, 115 (1933). See also Rule 142(a). Taking into account petitioner's residence at 22 the time that petition was filed in cases such as this one 23 24 involving unreported income, the presumption of correctness arises only if the evidence shows a nexus 25 between the taxpayer and the source of the unreported cribers (973)406-2250|operationseem.tibersnet|www.escribets.net 1 2 3 4 5 6 7 8 9 income. See Weimerskirch v Commissioners, 596 F. 2d 358, 360 (9th Circuit 1979), rev'g 67 T.C. 672 (1977). That nexus has been established with respect to each item of income referenced in the notice either through petitioner's deemed concession, or.through review of what limited evidence we do have before us, as summarized in the facts recited above. It follows that petitioner, who did not appear for trial, bears the burden of proving that the 10 determination made in the notice is erroneous. This he 11 12 13 14 15 has failed to do. If further follows that the interest income and pension distributions referenced in the notice are includable in petitioner's 2015 income as respondent has determined, and we so find. To reflect the foregoing decision will be 16 entered for respondent. This concludes the Court's bench opinion in this (Whereupon, at 11:04 a.m., the above-entitled matter was concluded.) case. 17 18 19 20 21 22 23 24 25 cribers 73)406-2250|opeptions®escdbersaet|www.escrbetsmet