TAX COURT OPINION

Case: Lawrence D. Dubin
Docket Number: 7752-18
Judge: Thornton
Opinion Type: bench
Filed: 05/06/2019
Pages: 5

UNITED STATES TAX COURT WASHINGTON, DC 20217 LAWRENCE D. DUBIN, Petitioner, v. ) ) ) ) Docket No. 7752-18. 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 Judge Michael B. Thornton at New York, New York, 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, a decision will be entered for respondent. (Signed) Michael B. Thornton Judge Dated: Washington, D.C. May 6, 2019 SERVED May 08 2019 Bench Opinion by Judge Michael B. Thornton APril 15, 2019 3 Lawrence D. Dubin v. Commissioner of Internal Revenue Docket No. 7752-18 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. Except as otherwise provided by Rule 152(c) of the Tax Court Rules of Practice and Procedure, the oral 1 2 3 4 5 6 7 8 9 10 findings of fact and opinion shall not be relied upon as 11 Precedent in any other case. 12 This bench opinion is made pursuant to the 13 authority granted by section 7459(b) and Rule 152. 14 Section references are to the Internal Revenue Code as in 15 effect for the taxable year at issue. All rule references 16 are to the Tax Court Rules of Practice and Procedure. All 17 monetary amounts are rounded to the nearest dollar. 18 This case was tried on April 15, 2019, in New 19 York, New York. Petitioner appeared pro se. Brian E. 20 Peterson appeared on behalf of respondent. 21 Findings of Fact 22 23 24 25 During 2015 petitioner was employed as a substance abuse counselor. In August of 2015, his employment was terminated. He began receiving unemployment compensation from the New York State Department of Labor, which reported to the Internal Revenue Service (IRS) on Form 1099-G that in 2015 it paid 4 to petitioner unemployment compensation totaling $9,300. Additionally, petitioner received $29 from a settlement fund, as reported to the IRS on a Form 1099-MISC. On his 2015 income tax return, petitioner reported only $915 of unemployment compensation; he did not report the $29 settlement fund payment. By notice of deficiency respondent determined a $1,263 deficiency in petitioner's 2015 Federal income tax resulting from petitioner's underreporting of unemployment compensation and omission of the settlement proceeds. 1 2 3 4 5 6 7 8 9 10 11 12 13 While residing in New York, petitioner timely petitioned 14 this Court. 15 Opinion 16 The Commissioner's determinations in a notice of 17 deficiency are generally presumed correct, and the 18 19 20 21 22 taxpayer bears the burden of proving those determinations erroneous by a preponderance of the evidence. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). The United States Court of Appeals for the Second Circuit, to which any appeal of this case would 23 ordinarily lie, see secs. 7482(b)(1) (A) and (2), has held 24 that for the presumption of correctness to attach to the 25 notice of deficiency in unreported income cases, the 5 1 2 3 4 5 6 7 8 9 Commissioner must establish some evidentiary foundation connecting the taxpayer with the income-producing activity. See Llorente v. Commissioner, 649 F.2d 152, 156 (2d Cir. 1981), aff'g in part, rev'g in part and remanding 74 T.C. 260 (1980). Respondent has introduced sufficient evidence connecting petitioner with the unemployment compensation and the settlement fund proceeds, as reported to the IRS on Forms 1099. In any event, petitioner has not disputed receiving the income. Respondent has met his 10 burden and the presumption of correctness properly 11 12 attaches to respondent's deficiency determination. Pursuant to section 61(a), gross income includes 13 all income from whatever source derived, unless the 14 15 16 17 18 taxpayer can establish that the specific item of income is nontaxable. Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 429-430 (1955). Petitioner has not raised any genuine issue with respect to the amount or taxability of the unemployment compensation or settlement proceeds that 19 he received in 2015. 20 21 22 Petitioner testified that his tax preparer advised him that his unemployment compensation is nontaxable. Any such advice was erroneous. Section 85(a) 23 explicitly includes in gross income an individual's 24 unemployment compensation. While we sympathize with 25 Petitioner about the quality of the tax advice he (9733406-2250!operationseescribersaetlwww.escríbetsmet allegedly received, this is simply no reason to relieve Petitioner of taxes which were legally owing and which should have been paid upon the filing of his 2015 return 6 if they had been correctly calculated. We sustain respondent's determination and will enter decision for respondent. This concludes the Court's findings of fact and OPinion in this case. (Whereupon, at 4:03 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