TAX COURT OPINION

Case: Michael M. Sasaki
Docket Number: 3448-12
Judge: Gale
Opinion Type: bench
Filed: 06/25/2013
Pages: 8

ALS UNITED STATES TAX COURT WASHINGTON, DC 20217 MICHAEL M. SASAKI, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent OR D E R ) ) ) ) ) Docket No. ) ) ) ) 3448-12. 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 Joseph H. Gale at Honolulu, Hawaii, on June 14, 2013, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. Decision will be entered for respondent in accordance with the oral findings of fact and opinion. (Signed) Joseph H. Gale Judge Dated: Washington, D.C. June 25, 2013 SERVED Jun 26 2013 Capital Reporting Company 3 1 2 Bench Opinion by Judge Joseph H. Gale June 14, 2013 3 Michael M. Sasaki v. Commissioner 4 5 6 7 8 9 10 11 12 1.3 14 15 16 17 18 19 20 21 22 23 24 25 Docket No. 3448-12 THE COURT: The Court has decïded to render oral findings of fact and opinion in this case and the following represents the Court's oral I findings of fact and opinion. The 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) of the Internal Revenue Code and Rule 152 of the Tax Court Rules of Practice and Procedure. Hereinafter, all section references are to the Internal Revenue Code in effect for the year at issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. Petitioner Michael M. Sasaki appeared on his own behalf. Jonathan J. Ono appeared on behalf of respondent. Respondent determined a $13,726 deficiency in petitioner's 2008 Federal income tax, with additions to tax of $3,088.35 under section 6651(a) (1), $1,990.27 under section 6651(a) (2), 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 and $441.12 under section 6654 (a). Petitioner timely petitioned for redetermination. BACKGROUND . The parties did not stipulate any facts or evidence. Some facts have been deemed admitted pursuant to Rule 90(c). Petitioner resided in Hawaii at the time the petition was filed. Petitioner did not file a Federal income tax return for 2008. He did not have any Federal income tax withheld for that year, and he did not make any estimated tax payments. Based on the information returns filed by third-party payors, respondent issued to petitioner a notice of deficiency for 2008, determining the deficiency and additions to tax at issue in this case. Petitioner timely filed a petition for redetermination wherein he asserted only frivolous reasons for disagreeing 18 with respondent's determinations, including that he 19 20 21 22 23 is not a "person liable" for tax under Subtitle A of the Internal Revenue Code, and that he received no "income" for 2008, according to his misguided reading of Eisner v. Macomber, 252 U.S. 189 (1920). On January 8, 2013, the Court issued a 24 Notice Setting Case for Trial and a Standing 25 Pretrial Order. The notice notified the parties of 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 the time and place of trial, and advised them that they were expected to be present and prepared to try the case. Among other things, the Standing Pretrial 4 Order directed the parties to begin discussing the 5 6 7 8 9 10 11 12 13 14 15 16 case and to stipulate facts to the maximum extent possible. also advised them that, in accordance with Rule 133, continuances would be granted "only in exceptional circumstances". On March 19, 2013, respondent served requests for admission on petitioner, requesting that he admit to receiving during 2008 the income upon which the deficiency is based. Specifically, respondent requested that petitioner admit he received $61,978 of capital gains related to the sale of stocks and bonds, $13,545 of dividends, and $22 of interest through an account he maintained 17 with E Trade Clearing LLC, as well as $1,951 of 18 nonemployee compensation from Amway Corporation. 19 Petitioner did not respond to the requests for admission. As a result, each requested admission is deemed admitted, see Rule 90(c), and conclusively established for purposes of this case, see Rule 90 (f). See also Smith v. Commissioner, 800 F.2d 930, 935 (9th Cir. 1986). 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 Petitioner appeared for trial and requested a continuance. Under Rule 133, requests for continuance made 30 days or less prior to the date of trial are ordinarily deemed dilatory, and 5 will be denied unless the ground therefor arose 6 7 8 9 10 11 12 13 14 15 16 17 during that period or there was a good reason for not making the request sooner. Petitioner offered no ground or reason, nor did he indicate why he was not -prepared for trial despite receiving five months advance notice. He only noted that he was too busy with his other case. Leading up to trial petitioner disregarded every attempt by respondent to move this case forward; he did not participate in the stipulation process or respond to the requests for admission, and he has not asserted a non- frivolous dispute with respondent's determinations. In light of petitioner's failure to participate in 18 pretrial matters and his failure to allege an 19 20 21 22 23 24 25 "exceptional circumstance" justifying continuance, his request was denied. DISCUSSION Generally, the Commissioner's determinations are presumed correct, and the taxpayer bears the burden of proving those determinations wrong. Rule 142(a); Welch v. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 Helvering, 290 U. S. 111, 115 (1933) . Petitioner 2 3 4 5 6 7 8 9 provided no testimony and offered no evidence at trial. He is deemed to have admitted receiving the income on which the deficiency was determined. His contention that the capital gains, dividends, interest, and nonemployee compensation he received in 2008 does not qualify as "income" is frivolous. See sec. 61(a). So too is his contention that he is not a "person liable" for Federal income tax. See 10 Rowlee v. Commissioner, 80 T.C. 1111, 1120 (1983). 11 Accordingly, we sustain respondent's deficiency 12 13 14 15 16 17 18 19 20 21 22 determination for petitioner's 2008 taxable year. Ordinarily the Commissioner bears the burden of production with respect to a taxpayer's liability for additions to tax. See sec. 7491(c). However, where a petition·fails to state a claim in respect of additions to tax, the Commissioner incurs no obligation to produce evidence in support of such determinations pursuant to section 7491(c). Funk v. Commissioner, 123 T.C. 213,218 (2004); see also Swain v. Commissioner, 118 T.C. 358 (2002) . Rule 34 (b) (4) requires that petitions filed with this 23 Court contain clear and concise assignments of each 24 25 and every error which the petitioner alleges to have been committed by the Commissioner in the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 determination of the deficiency or liability, including matters with respect to which the Commissioner has the burden of proof. Any issue not raised in the assignments of error shall be deemed to be conceded. Rule 34 (b) (4) . The petition in this case contains only frivolous arguments, and lacks any clear assignment of error allegedly committed by respondent in the determination of the additions to tax. Consequently, petitioner is deemed to have conceded the additions to tax, and respondent is not obliged under section 7491(c) to produce evidence that the additions to tax are appropriate. Funk v. Commissioner, 123 T.C. at 217-218; Swain v. Commissioner, 118 T.C. at 364-365. Accordingly, we sustain respondent's determination of additions to tax for petitioner's 2008 taxable year. By Order dated May 30, 2013, the Court advised petitioner that his petition contained a number of frivolous and/or groundless contentions, and warned him that if he persisted in maintaining frivolous or groundless positions in the case, the 22 Court may.impose a penalty under section 6673(a). 23 24 25 We decline to impose such a penalty in this case,, but petitioner is warned that if he takes frivolous or groundless positions in future proceedings before 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 this Court, the Court may impose a penalty under section 6673(a) of up to $25,000. Contentions we have not addressed are irrelevant, moot, or meritless. To reflect the foregoing, decision will be entered for respondent. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 1:13 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 25 866.488.DEPO www.CapitalReportingCompany.com