TAX COURT OPINION

Case: Kim Elise Glasgow
Docket Number: 20539-14
Judge: Morrison
Opinion Type: bench
Filed: 02/29/2016
Pages: 7

SYM UNITED STATES TAX COURT WASHINGTON, DC 20217 KIM ELISE GLASGOW, Petitioner v. ) ) ) ) Docket No. 20539-14. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ORDER OF SERVICE OF TRANSCRIPT 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 Judge Richard T. Morrison, at Los Angeles, California, 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, an appropriate decision will be entered. (Signed) Richard T. Morrison Judge Dated: Washington, D.C. February 29, 2016 SERVED Mar 01 2016 Capital Reporting Company Bench Opinion by Judge Richard T. Morrison 3 November 17, 2015 Kim Elise Glasgow Docket No. 20539-14 THE COURT: The Court has decided to render 1 2 3 4 5 6 Oral Findings of Fact and Opinion in this case. The 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 following represents the Court's Oral Findings of Fact and Opinion, which shall not be relied on as precedent in any other case. This bench opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code, and Rule 152 of the Tax Court Rules of Practice and Procedure. Unless otherwise indicated, all references to sections are to sections of the Internal Revenue Code in effect for tax year 2010, and all references to Rules are to the Tax Court Rules of Practice and Procedure. FINDINGS OF FACT In 2010, Glasgow received $418 in ordinary I dividend income, $20,531 in interest income, and $145 in taxable Social Security benefits. Glasgow did not file a tax return for the year. Nor did she make any tax payments for the year. Glasgow does not dispute that the IRS filed 866.488.DEPO www.CapitalReportingCompany.com 1 Capital Reporting Company 4 a substitute for return for 2010. The substitute for return reflected a tax liability of $1,340, based on the income she received. On July 23, 2014, the IRS issued a notice of deficiency for the tax year 2010 determining a deficiency of $1,340, liability for the failure-to- file penalty in the amount of $301.50, and liability for the failure-to-pay-tax penalty in the amount of $241.50. Opinion Glasgow was a resident of California when she filed her petition. 1. Deficiency. Glasgow admits that she received the inc.ome that gave rise to the tax liability reflected on the notice of deficiency. However, she contends that the IRS has waived its right to collect the deficiency amount. We observe tha,t the IRS included with its notice of deficiency a waiver form that, if signed by the taxpayer, would have allowed the IRS to immediately assess the deficiency. This in effect would be a waiver of the taxpayer's right against immediate assessment, a right given by section 6213(a). Glasgow may have confused this form, which would waive the taxpayer's rights, with a form 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 waiving the IRS's rights. 2 3 Glasgow also contends that she had the right to offset her 2010 tax liability with a $1 4 billion debt supposedly owed to her by the IRS. It 5 6 appears that Glasgow contends that the IRS failed to provide a remedy for the alleged stabbing o.f 7 Glasgow's mother by a nursing-home worker. However, 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 she failed to demonstrate that any such claim against the IRS was reduced to judgment. The Tax Court does not have jurisdiction to adjudicate the claim. See, e.g., Broemer v. Commissioner, T.C. Memo. 2009-72, slip op. at . Glasgow also contends that she suffered a $38,500 loss in 2008 that should carry over to 2010.. However, the record does not reveal how a loss sustained in 2008 would affect Glasgow's 2010 tax liability. Section 165(a), for example, allows the taxpayer to deduct a loss for a taxable year but only if the loss is sustained in that year. Although section 7491(a) may shift the burden of proof to the IRS in specified circumstances, Glasgow did not satisfy the prerequisites under section 7491(a)(1) and (2) for such a shift. I conclude that the deficiency for 2010 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 should be sustained. 2. Glasgow is liable for the failure-to- timely-file-addition to tax. Section 6651(a)(1) imposes an addition to tax if the taxpayer fails to timely file a tax return, unless the failure is due to reasonable cause and not willful neglect. A substitute for return prepared by the IRS is not considered a return for this purpose. Sec. 6651(g)(1). The IRS has the burden of producing evidence that impo,sing the failure-to-timely-file addition to tax is appropriate. Sec. 7491(c); see Higbee v. Commissioner, 116 T.C. 438, 446-447 (2001). The IRS has satisfied its burden. As Glasgow admits, she did not file a return for tax year 2010. Once the IRS produces evidence that the. taxpayer is liable for the addition to tax, the taxpayer must provide sufficient evidence to persuade the Court the IRS's determination is incorrect. See id. at 447-448. The addition to tax is inapplicable if the taxpayer's failure to file the return was due to reasonable cause and not willful neglect. See sec. 6651(a)(1). Glasgow testified that she did not timely file a tax return for 2010 because she was handling other matters. However, she did not explain 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 specifically what prevented her from filing a return during the relevant time frame. Her 2010 return was due on April 15, 2011. Furthermore, the reasons. given by Glasgow for not filing the return would not be reasonable causes for her failure to file, even if they actually prevented her from filing a return. For example, she testified that she was too busy handling correspondence from the IRS to file her 2010 return. But she did not explain why she gave a higher priority to the correspondence than to her legal obligation to file her tax return. I conclude that Glasgow has not shown reasonable cause for her failure to file her 2010 return. 3. Glasgow is liable for the failure-to-pay- tax-shown-on-the-return addition to tax. Section 6651(a)(2) imposes an addition to tax if the taxpayer fails to timely pay the amount shown as tax on a tax return, unless the failure is due to reasonable cause and not willful neglect. The substitute for return prepared by the IRS for 2010 is considered a return for this purpose. Sec. 6651(g)(2). The IRS has the burden of producing ev.idence, under section 7491(c), that imposing this addition is appropriate. The IRS has satisfied its 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company ...,- - 8 1 2 3 4 5 6 7 8 9 10 11 burden because it introduced records showing that Glasgow made no payments against her 2010 tax liability. See Winslow v. Commissioner, 139 T.C. 270, 275-276 (2012). Furthermore, Glasgow admits that she did not make any payments against her 2010 tax liability. Glasgow is required to prove that she had reasonable cause for her failure to pay tax and that the failure was not due to willful neglect. See id. at 276. Glasgow contends that she did not pay her tax liability for 2010 because the IRS owed her $1 12 billion. However, she did not demonstrate that this alleged debt had been reduced to judgment. Nor did she consult a lawyer or a tax professional regarding its effect on her obligation to make the tax payment'. See Henningsen v. Commissioner, 26 T. C. 528, 536 (1956), aff'd, 243 F.2d 954 (4th Cir. 1957). Her failure to pay her tax liability was not due to reasonable cause. 4. Conclusion. A decision will be entered for respondent. This ends the bench opinion. (Whereupon, at 3:09 p.m., the above- entitled matter was concluded. ) 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com