TAX COURT OPINION

Case: James R. Hussey
Docket Number: 1973-24L
Judge: Carluzzo
Opinion Type: bench
Filed: 05/20/2025
Pages: 6

JAMES R. HUSSEY, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent United States Tax Court Washington, DC 20217 Docket No. 1973-24L. 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 Special Trial Judge Carluzzo at Dallas, Texas, on April 16, 2025, 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, a decision will be entered for respondent. (Signed) Lewis R. Carluzzo Special Trial Judge Served 05/20/25 1 2 3 4 5 6 7 8 9 10 11 Bench Opinion by Judge Lewis R. Carluzzo April 16, 2025 3 James R. Hussey v. Commissioner of Internal Revenue Docket No. 1973-24L 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 (bench opinion). Section references made in this bench opinion are to the Internal Revenue Code of 1986, as amended, in effect for the relevant period, and Rule references are to the Tax Court Rules of Practice and 12 Procedure. 13 14 15 16 17 18 19 20 21 22 23 24 25 This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. Except as provided in Rule 152(c), this bench opinion shall not be cited as authority. By Order served March 5, 2025, this case was set for trial on April 16, 2025, in Dallas, Texas. The trial proceeded as scheduled. Joseph L. Damele and Christopher Kippes appeared on behalf of respondent. Petitioner, who lived in Texas when the petition was filed, did not appear for trial nor did anyone on his behalf. Pursuant to procedures described in section 6320 and section 6330, respondent proposed to collect by levy and a Notice of Federal Tax Lien petitioner's outstanding 1 2 3 4 5 6 7 8 9 federal tax liabilities as follows: (1) For 2018, an 4 outstanding income tax liability assessed, along with related amounts as a result of the deficiency procedures described in sections 6211, 6212, and 6213 (underlying income tax liability); and (2) for 2015, 2016, 2017, 2018, and 2019, penalties assessed pursuant to section 6702. Two section 6702 penalties have been assessed for some of the years, but none of the penalties are based upon duplicates or copies of any submission (underlying penalty 10 liabilities). See Kestin v. Commissioner, 153 T.C. 14 11 (2019). 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A fair reading of the amended petition shows that petitioner challenges only the underlying liabilities in this proceeding. With respect to the underlying penalty liabilities, we find that he is entitled to do so, although appreciate arguments made in respondent's Pretrial Memorandum that he is not. In pretrial submissions the parties also quibble over whether petitioner is entitled to challenge the income tax liability in this proceeding. According to respondent, he is not because the assessment of the income tax liability is based upon a Notice of Deficiency that was issued to him for that year. According to petitioner, "his records" do not show that a Notice of Deficiency was issued to him for that year, but if it was, he did not 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 receive it, but if he did receive it, the determinations 5 made in that Notice of Deficiency are invalid. Receipt of the Notice of Deficiency is important as a taxpayer is precluded from challenging an underlying liability in cases such as this one if the taxpayer received a notice of deficiency for that tax liability. See section 6330(c)(2)(B). Under the circumstances, we see little point in resolving the dispute between the parties on the point and consider it more efficient to ignore respondent's arguments to the contrary and proceed to consider petitioner's challenge to the underlying liabilities. Proceeding in that manner, our review of the underlying liabilities is de novo, and we keep in mind that petitioner bears the burden of proving that the underlying income tax liability is in some manner or another erroneous, and that respondent bears the burden of proving that petitioner is liable for each of the assessed 19 penalties. 20 21 22 23 24 25 We'll start with the underlying income tax liability. Regardless of what petitioner's record show, or don't show, the evidence shows that respondent issued a Notice of Deficiency to petitioner in which a deficiency in his 2018 federal income tax was determined. The determination made in that notice are presumptively 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 correct. Petitioner has offered no evidence to rebut that 6 presumption. Because the evidence shows that respondent properly assessed the deficiency and related amounts, we reject petitioner's claim that he is not liable for the underlying income tax liability because he has failed to satisfy his burden of proof on the issue. Next we consider the underlying penalty liabilities. The evidence shows that for each year that the penalty was imposed petitioner received income that required him to file a federal income tax return. The evidence further shows that for each of those years petitioner submitted a frivolous return (or amended return), followed in some years by yet another frivolous submission. Given the income petitioner enjoyed for each year as shown in respondent's evidence, a simple review of each of the relevant documents supports the imposition of the penalty, and other than that simple review, we are not inclined to comment further. See Crain v. Commissioner, 737 F.2d l4l7 (5th Cir. 1984). The evidence shows that each document that prompted respondent to impose a section 6672 penalty is frivolous within the meaning of section 6702, and further shows that respondent complied with section 6751(c) before each penalty was assessed. It follows that respondent has satisfied his burden of proof with respect to the 1 2 3 4 5 6 7 8 9 10 11 12 imposition of the penalties, see section 6703, and we so 7 hold. Petitioner's challenge to those liabilities is rejected. In closing we note that with respect to respondent's proposed collection actions, the evidence shows that respondent has proceeded as required by section 6320 and 6330, and although petitioner complains about the process, there is no evidence in the record to suggest otherwise. To reflect the foregoing, decision will be entered for respondent. And that concludes the bench opinion in this 13 matter. 14 15 16 17 18 19 20 21 22 23 24 25 (Whereupon, at 3:49 p.m., the above-entitled matter was concluded.)