TAX COURT OPINION

Case: Paul Thomas Demos
Docket Number: 26341-11
Judge: Colvin
Opinion Type: bench
Filed: 07/10/2013
Pages: 5

UNITED STATES TAX COURT WASHINGTON, DC 20217 RMM PAUL THOMAS DEMOS, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 26341-11. ) ) ) ) ) ) ) ) ) OR D E R 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 Maurice B. Foley at Phoenix, Arizona, 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) John O. Colvin Chief Judge Dated: Washington, D.C. July 10, 2013 SERVED Jul 11 2013 Capital Reporting Company 3 Bench Opinion by Judge Maurice B. Foley June 6, 2013 Paul Thomas Demos v. Commissioner Docket No. 26341-11 THE COURT: I will now read into the record a bench decision relating to Paul Thomas Demos, docket number 26341-11. THE COURT HAS DECIDED TO RENDER ORAL FINDINGS OF FACT AND OPINION 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 bench opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code of 1986, as amended, and Rule 152 of the Tax Court Rules of Practice and Procedure. All section references are to the Internal Revenue Code in effect for the year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. The facts are as follows: In late March of 2006, petitioner was released from jail. From April 3, 2006, through 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 April 26, 2006, petitioner lived in a residence he 25 had purchased in 2004 (first residence). On April 6, 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 2006, petitioner filed a bankruptcy petition with the U.S. Bankruptcy Court for the District of Arizona (Bankruptcy Court). Petitioner listed the first residence as his address on the bankruptcy petition; other documents filed with the Bankruptcy Court on 6 April 18, 2006, June 29, 2006, December 19, 2006, and 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 May 3, 2007; and his 2006 tax return dated January 31, 2007. Petitioner, on May 23, 2007, sold the first residence and, on April 8, 2009, purchased a new residence (second residence). On his 2005 and 2006 Federal income tax returns, petitioner listed the first residence as his "Home address". On his 2007 Federal income tax return, petitioner listed a rental property as his "Home address". On his 2008 Federal income tax return, petitioner listed the second residence as his "Home address" and claimed a first-time homebuyer credit (FTHBC) relating to his purchase of this residence. On August 22, 2011, respondent sent petitioner a notice of deficiency relating to 2008. In the notice, respondent determined that petitioner was not entitled to a FTHBC and was liable for a section 6662(a) accuracy-related penalty. On November 16, 2011, petitioner, while residing in 25 Arizona, filed his petition with the Court. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 9 10 11 Discussion of legal authorities: Section 36(a) allows a credit for a first-time homebuyer of a principal residence. A "first-time homebuyer" is any individual having no present ownership interest in a principal residence for three years prior to the date of purchase of a principal residence. Sec. 36(c) (1). Thus, petitioner is eligible for a FTHBC if he had no interest in a principal residence after April 7, 2006, and before April 8, 2009 (i.e., the period three years prior to his purchase of the second residence@8, Petitioner owned the first residence -Y 12 until May 23, 2007, and used this residence as his 13 14 15 16 17 18 19 20 21 22 23 24 25 principal residence from April 3, 2006, through April 26, 2006. See sec. 36(c) (2); Foster v. Commissioner, 138 T.C. 51, 53 (2012). Accordingly, he is not entitled to the FTHBC he claimed on his 2008 tax return. Respondent determined that petitioner was liable for a section 6662(a) accuracy-related penalty relating to 2008. See sec. 6662 (a) and (b) (2). Respondent bears, and has met, the burden of production relating to this penalty. See sec. 7491(c); Higbee v. Commissioner, 116 T.C. 438, 446 (2001). Petitioner has not, pursuant to section 6664 (c) (1), established reasonable cause for his 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 underpayment or that his 2008 tax return was prepared in good faith. See sec. 1.6664-4 (b) (1), Income Tax Regs. Accordingly, we sustain respondent's determination. Contentions we have not addressed are irrelevant, moot, or meritless. Decision will be entered for respondent. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 12:19 p.m., the above- entitled matter was concluded.) 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