TAX COURT OPINION

Case: Ruby H. & James A. Lowe
Docket Number: 15836-08
Judge: Colvin
Opinion Type: bench
Filed: 07/13/2009
Pages: 5

UNITED STATES TAX COURT WASHINGTON , DC 2021 7 RUBY H . AND JAMES A . LOWE , Petitione r V . COMMISSIONER OF INTERNAL REVENUE , Respondent 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 hall transmit herewith to petitioners and to respondent a copy of the pages of the transcript of the trial in the above case before Judge Joseph Robert Goeke at Honolulu, Hawaii, on June 18, 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 under Rule 155 .' (Signed) Joseph Robert Goeke Judg e Dated : Washington, D .C . July 13, 2009 SERVED JUL 15 2009 3 1 Bench Opinion by Judge Joseph Goeke June 18, 200 9 2 Lowe v . Commissioner Docket No . 1586-08L 3 THE COURT : The Court has decided to render 4 oral findings of fact and opinion in this case, an d 5 the following represents the Court's oral findings of 6 fact and opinion . The oral findings of fact an d 7 opinion shall not be relied upon as precedent in any 8 other case . . 9 This bench opinion is rendered pursuant to 10 Tax Court Rule of Practice and Procedure 152 . 11 Petitioners filed a petition in this case 12 seeking review of Respondent's determination of a 13 deficiency for 2006 . Petitioners attached a notice of 14 levy to the petition and the case was incorrectl y 15 designated as a collection case and given an L docket 16 number . 17 Respondent's answer and a subsequent motion 18 correctly explained that the case involved both the 19 Petitioners, Ruby H . and James A . Lowe, and that the 20 case was filed in response to a notice of deficiency, 21 not a notice of determination concerning collection 22 action . Respondent pointed out that no notice o f 23 determination was issued to the Petitioners for 2006 . 24 Accordingly, the caption of the case should 25 be Ruby H . & James A . Lowe, Docket No . 15836-08 . We Heritage Reporting Corporatio n (202) 628-4888 4 1 will issue an order to that effect . 2 The merits of the case involve Petitioners' 3 2006 Federal income tax liability and several issues 4 raised by Petitioners in response to the notice o f 5 deficiency issued by Respondent for that year . The 6 case also involves a prior assessment made by th e 7 Respondent based upon a mathematical error in th e 8 Petitioners' 2006 return, which Petitioners contest . 9 The case was tried on June 15, 2008, and 10 testimony from James A . Lowe as well as exhibits were 11 admitted into the record . The issues in the case are 12 largely based upon substantiation of expenses an d 13 bases . 14 At trial, it became apparent that the case 15 involved a breakdown of communication because of Mr . 16 Lowe's refusal to cooperate with Respondent . Once the 17 facts of the case were developed at trial, th e 18 resolution of the substantiation issues became 19 apparent to the Court . 20 The first issue involves a simple math error 21 made by the Petitioners on their 2006 income ta x 22 return, the omission of $9,383 reported on the return 23 in Schedule D but not added into gross income on page 24 1 of the return . This issue was correctly determined 25 by Respondent in the assessment for the mathematical Heritage Reporting Corporatio n (202) 628-4888 r f 5 1 error and was subject to a levy, which resulted in the 2 collection of the underlying liability resulting from 3 the math error prior to the commencement of this case 4 in Tax Court . 5 The other issues were determined in the 6 notice of deficiency . These issues involve d 7 additional income under Section 61, presuming tha t 8 Respondent's determinations of the amounts in question 9 are correct . The first issue involves a 10 redetermination of dividends as reported b y 11 Petitioners . Petitioners reported $572 of dividend 12 income, and Respondent determined an additional amount 13 of $4,015 . 14 A review of Respondent's records of source 15 documents relied upon in issuing the notice o f 16 deficiency causes the Court to find that the actual 17 taxable dividends were $568 and that the Petitioner s 18 in fact had overreported dividends by $4 . The Court 19 so holds relative to that issue/. ''- v P 11 20 The next issue involves interest income of 21 $881 . The Court finds that the determination in the 22 notice of deficiency was a duplication of incom e 23 reported by the Petitioners on their 2006 Federal 24 income tax returns, and accordingly, there is no 25 unreported interest income in 2006 . . Heritage Reporting Corporation (202) 628-4888 6 1 The final issue involves a transactio n 2 reported on line 16 of the attachment to Schedule D on 3 Petitioners' 2006 income tax return . Petitioner s 4 reported a gain of $1,979 .92, but Petitioners no w 5 claim that this amount was overstated . Respondent's 6 notice of deficiency asserted an additional gain of 7 $1,297 . 8 At trial, the evidence of amounts reporte d 9 to Respondent sustains the gain as originally reported 10 by the Petitioners, and the Court finds that th e 11 amount originally reported was correct . Based upon 12 these determinations, a Rule 155 computation will be 13 required . 14 This concludes the Court's oral findings of 15 fact and opinion in this case . 16 (Whereupon, at 10 :30 a .m ., the bench opinion 17 in the above-entitled matter was concluded . ) 18 19 20 21 2 2 23 24 25 Heritage Reporting Corporation (202) 628-4888