TAX COURT OPINION

Case: David R. Jahn
Docket Number: 24302-08
Judge: Colvin
Opinion Type: bench
Filed: 12/08/2009
Pages: 9

UNITED STATES TAX COURT WASHINGTON , DC 2021 7 DAVID R . JAHN, RM Petitioner, v . ) Docket No . 24302-08 . 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 shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above case before Judge Thomas B . Wells at Philadelphia, Pennsylvania on November 20, 2009, containing his oral findings of fact and opinion rendered at the conclusion of trial . In accordance with the oral findings of fact and opinion, decision will be entered for respondent . (Signed ) Thomas B. Wells Judg e Dated : Washington, D .C . December 8, 2009 SERVED Dec 09 2009 3 1 Bench Opinion by Judge Thomas B . Wells 2 November 20, 200 9 3 Jahn v . Commissioner Docket No . 24302-08 4 THE COURT : The Court has decided to render 5 oral findings of fact and opinion in this case, an d the following represents the Court's oral findings of fact and opinion . The oral findings of fact an d opinion shall not be relied upon as precedent in any other case . 10 This is the case of David R . Jahn , 11 Petitioner , v . Commissioner of Internal Revenue, . .12 Respondent , .Docket No . 2430-08 . This bench opinion 18W 13 is made pursuant to the authority granted by § 7459(d ) 14 and Rule 152 . All section references are to the 15 Internal Revenue Code as in effect . for the year in 16 issue, and all rule references are to the Tax Cour t 17ules of practice and ~rocedure . 18 Respondent determined a deficiency against 19 Petitioner for his 2006 taxable year in the amount of 20 $36,373, an addition to tax under § 6651(a)(1) in the .21 amount of $1,608 .30, an addition to tax . under § 22 6651(a)(2) computed as of May 5, 2008, in the amoun t .23 of $464 .62,and an addition to tax under § 6654 in the -swl 24 amount of $184 .60 . By amended answer, . Respondent 25 ° seeks to increase the deficiency and additions to tax Heritage Reporting Corporation . (202) 628-4888 1 based upon Petitioner's receipt of additional $2,280 . 2 of miscellaneous income . 3 Respondent also seeks a penalty . agains t 4 Petitioner under § 6673 . Petitioner concedes that his 5 gross income must be increased by the amounts _ 6 determined in the notice of deficiency and by th e 7 amount set forth in Respondent's amendment to answer . 8 The remaining issues we must decide are the following : 1) Whether Petitioner is entitled to itemize hi s 10 deductions ; . 11 2) whether Petitioner is entitled to join t 12 return filing status ; 3) whether Petitioner is liable 13 for additions to tax pursuant to § 6651(a)(1) ; .4 ) 14 whether Petitioner is liable for additions to tax 15 pursuant to § 6651(a)(2) ; 5) whether Petitioner is 16 liable for additions to tax1 pvr4utnf to le § 6654 ; and 6 ) 17 whether Petitioner should be liable under § 6673 for a . 18 penalty. for making frivolous and groundless arguments 19 in this case . 20 Some of the facts and certain exhibits have 21 been stipulated by the parties . The stipulated facts 22 are incorporated herein by reference and are found 23 accordingly . At the time the petition was filed , 24 Petitioner was a resident of Glenolden, Pennsylvania . 25 In general, Respondent's determinations are entitled Heritage Reporting Corporatio n (202) 628-4888 1 to a presumption of correctness, and Petitioner bears 2 the burden of rebutting that presumption by a preponderance of the evidence . Welch V . Helvering , 290 U .S . ill (1933) ; Rule 142(a) . 5 Petitioner does not contend that § 7491(a) should apply to the instant case to shift the burden of proof to Respondent, nor did he establish that i t 8 should apply to the instant case . Therefore, the . . 9 burden of proof remains on Petitioner . In this case , 10 the Petitioner has failed to provide any credibl e 11 evidence that Respondent ' s deficiency determinations 12 are incorrect . 13 Petitioner has presented only frivolous and 14 groundless arguments . Petitioner ' s contentions are 15 tax protester - type arguments that are without meri t 16 and so trivial they do not warrant discussion . See 17 Crain V . Commissioner , 737 F ..2d 1417 (5th Cir . 1984) 18 ("We perceive no need to refute these arguments with 19 somber reasoning and copious citation of precedent ; to 20 do"so might suggest that these arguments have som e 21 colorable merit") . 22 As to itemized deductions, a taxpayer must 23 file a return in order to elect to itemize deductions . 24 See § 63(e)(1) and (2) . Petitioner did not .file a 25 return for 2006 . Accordingly, Petitioner is not Heritage Reporting Corporatio n (202) 628-4888 6 entitled to itemized deductions for his 2006 taxable year. See Andreas v . Commissioner , T .C . Memo 1993- 551 . As to joint return filing status, Vie- taxpaye r a. must file a joint return prior to submitting his case with the Court for decision . See Phillips v . Commissioner , 86 T .C . 433, 441, n .7 .,affd . 851 F .2d 1492 (D .C . Cir . 1988) . In this case, as there is no joint return in the record, Petitioner is not-entitled to joint retur n 10 filing status . As to the addition to tax under § 11 6651(a)(1), Petitioner bears the burden of proof . 12 Rule 142(a) Under § 7491(c), Respondent must produce 13 evidence that it is appropriate to impose a penalty ; 14 however, Petitioner has the burden of proof . Higbee 15 v . Commissioner , 116 T .C . 438, 446 (2001) . 16 The record shows that Respondent has met his 17 burden of production on this issue . Petitioner failed 18 to offer any credible evidence on this issue . 19 Consequently, Petitioner is liable for the addition t o 20 tax under § 6651(a)(1) . As to the addition unde r 21 6651 (a) ,(2) , ,that section provides for an addition to 22 tax for failure to pay the amount shown on a ta x 23 return on or before the payment due date . The 24 addition to tax is 0 .5 percent per month and an 25 additional 0 .5 percent per month for each month the Heritage Reporting Corporation (202) 628-4888 7 failure continues up to 25 percent . In instances where the taxpayer fails to file a return, the return prepared by the Commissioner pursuant to § 6020(b) shall be treated as the retur n filed by the taxpayer for the purpose of calculating the addition to tax pursuant to § 6651( a)(2) . See § 6651 ( g)-(2 ) For a return to constitute a § 6020(b ) 8 return, it must be subscribed . It must contai n sufficient information from which to compute th e 10 taxpayer's liability, and the return form and an y 11 attachments must purport to be a return . Spurlock v . 12 13 Commissioner T .C . Memo.2003-124 . Respondent bears the burden of productio n 14 under § 7491(c), and Petitioner bears the burden of 15 proof . Higbee v . Commissioner , 116 T .C . 438, 446, 16 (2001.) . In this case, the record contains a 17 substitute return for 2006 . The substitute return is 18 subscribed and includes a § 6020(b) certification , 19 From 4549, Income Tax Examination, and Form 886-A, 20 Explanation of Items . 21 Those forms are sufficient to compute 22 Petitioner's tax liability for 2006, and Respondent iec 23 has certified that the substitute return will be 24 treated as a return . Because Petitioner 4s ne~d- has 25 not paid the amounts shown, he is liable for the Heritage Reporting Corporatio n (202) 628-4888 i13w -row/ 8 addition to tax under § 6651(a)(2) . . As to the addition to . tax under § 6654 , 3 taxpayers are liable for an addition to tax fo r 4 failure to pay estimated taxes where prepaymentSo f 5 tax, either through withholding or by making estimated 6 quarterly payments during the year do not equal th e 7 lesser of 90 percent of the tax for the curren t 8 taxable year or 100 percent of the tax shown for the 9 previous taxable yearif a return was filed for the 10 previous year . 11 An exception applies if . the tax due for the 12 year in issue is less than $1,000, the individual had 13 no tax liability for the preceding year or a waiver 14 applies. Section 6654( e) . Respondent bears the 15 burden of production to . show the taxpayer had an 16 estimated tax obligation)whichincludes whether a 17 return was filed for the preceding year . Section 18 7491(c), Wheeler v . Commissioner , 127 T .C . 200, 211- 19 212 (2006), affd . 521 F .3d 1289 (10th Cir . 2008) . 20 Petitioner bears the burden of proof . Higbee v . 21 Commissioner , supra . 22 In this case, the record shows tha t 23 Petitioner failed to file returns for his 2005 and 24 2006 taxable years, and he therefore was required to 25 make estimated payments equal to 90 percent of the ta x Heritage Reporting Corporation (202) 628-4888 for the year in issue . § 6654(d) (1) (A) , .(B) (i) and (ii) .' Petitioner ' made .'no estimated payments of ta x and has failed to show that any exception applies . Accordingly, Petitioner is-liable for the § 6654 addition to tax . As tolthe penalty under § 6673, § 6673(a)(1 ) provides that this Court may require the taxpayer t o pay a penalty not in excess of $25,000 whenever it appears to this Court that the . proceedings were 10 instituted and maintained by the taxpayer primarily 11 for delay, or . the taxpayer's position is frivolous or 12 groundless .-,Petitioner is no stranger to this Court .* 13, He was before the Court in Docket No . 6162-07 for hi s 14 2004 - taxable year , a case involving similar issues as 15 those in this case ., which resulted . in an opinion for 16 Respondent reported at Jahn v . Commissioner , T .C . Memo . 17 2008-141 . 18 In this case , despite being warne d 19 repeatedly that his positions were frivolous and 20 . groundless , Petitioner continued to advance thos e 21 positions . .' Accordingly, we shall impose a penalty on 22 Petitioner in the amount of $10,000 . Contentions we 23 have not addressed are irrelevant , moot or meritless . 24 To reflect the foregoing, decision will be entered .for 25 Respondent .' The foregoing represents the Court's .oral Heritage Reporting Corporatio n (202) 628-4888 findings of fact and opinion in this case . This concludes this case . . Thank you . (Whereupon, , at . 10 :21 a .m ., the bench opinio n in the above-entitled matter was concluded . ) 1 0 1 0 1 5 16 //, .:Heritage Reporting Corporatio n (202) 628-4888