TAX COURT OPINION

Case: Hari Washington Nagar
Docket Number: 11289-09S
Judge: Carluzzo
Opinion Type: bench
Filed: 12/28/2010
Pages: 6

UNITED STATES TAX COURT 20217 WASHINGTON, D.C. HARI WASHINGTON NAGAR, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent . ) ) ) ) ) ) ) ) ) Docket No. 11289-09S O R 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 transcript of Trial Judge Lewis R. Carluzzo at Houston, Texas, on November 18, 2010, containing his oral fact and opinion rendered at the above case before Special the conclusion of trial. the pages of the the trial of findings of 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. December 28, 2010 SERVED MC 2 9 20s 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 3 Bench Opinion by Special Trial Judge Lewis R. Carluzzo November 18, 2010 Nagar v. Commissioner Docket No. 11289-09S 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. This proceeding for the redetermination of a deficiency is conducted ras a Small Tax Case pursuant to the provisions of section 7463 of the Internal Revenue Code of 1986, as amended, and Rules 170 through 175 of the Tax Court Rules of Practice and Procedure. 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. Subsequent section references made in this bench opinion are to the Internal Revenue Code of 1986, as amended, in effect for 2006. Hari Washingtòn Nagar appeared pro se. Derek B. Matta appeared on behalf of respondent . In a notice of deficiency dated February 23, 2009, respondent determined a $738 deficiency in petitioner's 2006 Federal income tax. Heritage Reporting Corporation (202) 628-4888 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 4 The issue for:decision is whether petitioner understated his interest income on his timely filed 2006 Federal income taxireturn. Some of the facts have been stipulated and are so found. At the time the petition was filed, petitioner resided in Téxas. At all times relevant petitioner was employed as a chemical engineer. In addition to bank accounts maintained at other financial institutions, from time to time during 2006 petitioner maintained at least six interest-bearing accounts with the Bank of America. Some of these accounts were in the form of certificates of deposit and at least one account was a money market checking account. Sometimes as one certificate of deposit matured, petitioner used the proceeds to open another. According to the records of the Bank of America, petitioner earned interest income totaling $16,411 (all references to interest income amounts are rounded) attributable to these six accounts. Some of this interest income was forfeited, as shown on the Bank of America's records and line 30 of petitioner's 2006 return). Petitioner's 2006 return was self-prepared. The adjusted gross income shown on that return Heritage Reporting Corporation (202) 628-4888 5 includes interest income totaling $14,218. Of that amount, the return shows the Bank of America as the "payer" of $13,780. The balance -- that is, $438 -- is shown on the return to have been paid to petitioner by other financial institutions. In the notice of deficiency respondent increased petitioner's interest income by $2,632 (the disputed interest income). The disputed interest income represents the difference between the amount shown on the Bank of America's records as interest income paid to petitioner during 2006 ($16,411) and the amount shown on petitioner's return ($13,780) as having been paid to him by that bank (the $1 discrepancy is due to rounding). At the time that petitioner prepared his 2006 return, he had received a Combined Tax Statement for Year 2006 from the Bank of America listing three of the six interest-bearing accounts mentioned above (the interest statement). (The interest statement represents the functional equivalent of, among other information reports, a more well-known Form 1099-INT). The $13,780 interest reported on the interest statement from those three accounts is, as noted 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 . above, the amount petitioner shows as interest income 25 from Bank of America on his return. Petitioner has Heritage Reporting Corporation (202) 628-4888 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 6 never received a Form 1099-INT or other information report from the Bank of America with respect to the disputed interest income Petitioner does not claim that the disputed interest income is somehow excludable from his income. See sec. 61(a) (4). Neither does he claim that the accounts which generated the'disputed interest.income, as shown in the records of the Bank of America, were not his accounts. Instead, he believes that the disputed interest income, which is attributable to three interest-bearing accounts closed during 2006, has been duplicated in the interest income shown on the interest statement. 3 As petitioner views the matter, he has already included all of the interest income paid to him by the-Bank of America in the interest income reported on his 2006 return. Respondent disagrees and so do we. If petitioner is correct, then the balances of the Bank of America interest-bearing accounts that remained open as-of the close of 2006 would have been short by the amount of the'disputed interest income. Stated differently, -as of the close of 2006, petitioner's savings -on deposit in Bank of America accounts would not have increased by $16,411, as the bank records suggest, b t-only by $13,780. Given Heritage Reporting Corporation (202) 628-4888 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 8 demonstrate that the disputed interest income was paid to petitioner during 2006, and petitioner has failed to persuade us that those records are not accurate. Respondent' s adjustment to petitioner' s 2006 income, which is based upon information received from the Bank of America, is therefore sustained. To reflect the foregoing decision will be entered for respondent. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 12:56 p.m., the bench opinion in the above-entitled matter was concluded.) // // // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888