TAX COURT OPINION

Case: Thomas George Hanson
Docket Number: 24145-08S
Judge: Colvin
Opinion Type: bench
Filed: 12/28/2009
Pages: 5

UNITED STATES TAX COURT WASHINGTON , DC 2021 7 THOMAS GEORGE HANSON , Petitione r V . COMMISSIONER OF INTERNAL REVENUE , Respondent Docket No . 24145-08S . O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s . 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 Special Trial Judge John F . Dean at Seattle, Washington, on November 19, 2009, containing his oral findings of fact and opinion rendered at the conclusion of the trial . In accordance with the oral findings of fact and opinion, decision will be entered for respondent . (Signed) John F . Dean Special Trial Judg e Dated : Washington, D .C . December 28, 2009 SERVED 'JAN 5 2~1Q 3 1 Bench Opinion by Special Trial Judge John F . Dea n 2 Docket No . 24145-08S November 19, 2009 3 Thomas George Hanson v . Commissione r 4 THE COURT : The Court has decided to rende r 5 oral findings of fact and opinion in this case and the 6 following represents the Court's oral findings of fact 7 and opinion . The oral findings of fact and opinio n 8 shall not be relied upon as precedent in any other 9 case . 10 In this oral opinion all section numbers refer 11 to the Internal Revenue Code in effect for the taxable 12 year in issue and all rule references are to the Tax 13 Court Rules of Practice and Procedure . 14 This proceeding was heard as a Small Tax Case 15 pursuant to the provisions of section 7463 and Rules 16 170 through 179 . 17 For 2006, respondent determined a deficiency in 18 the petitioner's Federal income tax in the amount of 19 $600 . 20 The issue for decision is whether petitioner 21 received unreported gambling winnings of $3,962 in 22 2006 . 23 The stipulated facts and exhibits are 24 incorporated herein by reference . Petitioner resided 25 in Washington State at the time the petition in this Heritage Reporting Corporatio n (202) 628-4888 4 1 case was filed . 2 Petitioner does not deny that he received 3 gambling winnings of $3,962 from the Muckleshoo t 4 Indian Casino in 2006 that he did not report on his 5 Federal income tax return, although he did attach to 6 the return Forms W2-G, Certain Gambling Winnings, to 7 the return . Petitioner, however, claims that hi s 8 gambling losses equal or exceed his winnings . Because 9 petitioner's return preparation software would not let 10 him claim wagering losses in excess of his wagerin g 11 gains, petitioner omitted his wagering income, 12 thinking the software was defective . Petitione r 13 14 claimed the standard deduction on his Federal incom e tax return for 2006 . 15 Generally, the Commissioner's determinations in 16 a notice of deficiency are presumed correct, and the 17 taxpayer has the burden of proving that thos e 18 determinations are erroneous . Se Rule 142(a) ; Welch 19 v . Helvering, 290 U .S . 111, 115 (1933) . In some cases 20 the burden of proof with respect to the relevan t 21 factual issues may shift to the Commissioner under 22 section 7491(a) . As petitioner has not met th e 23 requirements of section 7491(a)(2), however, section 24 7491(a) . will not apply in this case . 25 Under section 165(a), taxpayers are allowed a Heritage Reporting Corporatio n (202) 628-4888 5 1 deduction for a loss sustained during the year that i s 2 not compensated by insurance or otherwise . Taxpayers 3 who are individuals may only deduct a loss that i s 4 either : (a) Incurred in a trade or business, (b) 5 incurred in a transaction entered into for profi t 6 though not connected with a trade or business, or (c) 7 arising from a casualty or theft . Sec . 165(c) . 8 Section 165(d) provides, however, that losses fro m 9 wagering transactions are allowed "only to the extent 10 of gains from such transactions ." Petitioner has the 11 burden of proving that he sustained such losses . E .g . 12 Stein v . Commissioner , 322 F .2d 78 (5th Cir . 1963) , 13 affg . T .C . Memo . 1962-19 ; Mack v . Commissioner , 429 14 F .2d 182 (6th Cir . 1970), affg . T .C . Memo . 1969-26 . 15 Petitioner, as evidence of his losses, ha s 16 produced copies of bank statements showing withdrawals 17 made from an automated teller machine at the 18 Muckleshoot Indian Casino . Petitioner cannot , 19 however, show how the withdrawn amounts were expended . 20 Accordingly, the Court holds that petitioner mus t 21 include in his income for 2006 his $3,962 in winnings 22 from gambling at the Muckleshoot Indian Casino without 23 reduction for wagering losses . 24 To reflect the foregoing, decision will be 25 entered for the respondent . Heritage Reporting Corporation (202) 628-4888 1 This concludes the Court's oral findings of 2 fact and opinion in this case . 3 (Whereupon, at 10 :06 a .m ., the bench opinion in 4 the above - entitled matter was concluded . ) 6 5 6 7 8 9 10 11 12 13 14 1 5 16 17 18 19 20 2 1 22 2 3 24 25 Heritage Reporting Corporation (202) 628-4888