TAX COURT OPINION

Case: Jint & P.E. Jiralerspong
Docket Number: 4980-10
Judge: Colvin
Opinion Type: bench
Filed: 02/25/2011
Pages: 5

UNITED STATES TAX COURT WASHINGTON, DC 20217 KVC JINT & P . E . JIRALERSPONG, Petitioners, v. ) Docket No. 4980-10 COMMISSIONER OF INTERNAL REVENUE, Respondent. O R D E R Pursuant to Rule 152 (b) , Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioners and to respondent a copy of transcript of January 27, 2011, containing her oral opinion rendered in this case. findings of fact and the above case before Judge Diane L. Kroupa on the pages of the In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Diane L. Kroupa Judge Dated: Washington, D.C. February 25, 2011 SERVED Feb 28 2011 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 2 Bench Opinion by Judge.Diane L. Kroupa Jiralerspong v. Commissioner Docket No. 4980-10 January 27, 2011 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. These oral findings of fact and opinion shall not be relied upon as precedent in any other case. This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. All section references are to the Internal Revenue Code in effect for 2007, and all Rule references are to the Tax Court Rules of Practice and Procedure. Petitioners appeared on their own behalf, and Benjamin Peeler appeared on behalf of Respondent. FINDINGS OF FACT Petitioners resided in Cypress, Texas, at the time they filed the petition. Petitioners deviated from the instructions for their Federal income tax return for 2007 by choosing to exclude qualified dividends from line 9a. They believed that the Form 1040 conflicted with Publication 17. To compensate for this perceived inconsistency, they only reported qualified dividends Heritage Reporting Corporation (202) 628-4888 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 3 on line 9b. Respondent issued to Petitioners a deficiency notice in which Respondent determined a $2,445 deficiency in Federal income tax for 2007. Since that time, the parties have explained and argued their positions with apparent increasing frustration. Eleven days before trial, Respondent filed a Motion for Leave to File Amendment to Answer to increase the amount of the deficiency. The Court shall deny Respondent's motion. OPINION This case highlights the Code's complexity. We begin with the fundamental principle of tax litigation that the Commissioner's determination^in the deficiency notice are presumed correct and taxpayers bear the burden to establish those determinations are incorrect. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). The record reflects that Petitioners spent a great deal of time trying to explain their calculations and very passionately defend their position. They argue that qualified dividends must not be included in line 9a of their tax return and that the maximum capital gains rate applicable to their dividends is 5 percent. We find nonetheless Heritage Reporting Corporation (202) 628-4888 i 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 that Petitioners failed to prove that Respondent's determination and calculation of the deficiency amount is incorrect. Indeed, Petitioners seem to have misunderstood the application of certain tax laws and seem to have confused the tax rate with the effective tax rate. Furthermore, Petitioners support their arguments with excerpts from Publication 17, which is not authoritative tax law. See Green v. Commissioner, 59 T.C. 456, 458 (1972). The Court recognizes that the Tax Code is complex. This case highlights the unfortunate difficulties of calculating tax liabilities and the frustration that can arise in communicating about differing positions. The Court notes, however, 'that Petitioners would have been better served by unemotional attempts to understand Respondent's calculations and interpretation of the Code. Similarly, the Court wishes Respondent would not have resorted to asserting an increased deficiency in explaining his interpretation of the Code's complex provisions. To reflect the foregoing, decision will be entered for Respondent. This concludes the Court's oral findings of fact and opinion in this case. Heritage Reporting Corporation (202) 628-4888 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 (Whereupon, at 10:36 a.m., the bench opinion in the above-entitled matter was concluded.) 5 // // // // // // // // // // // // // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888