TAX COURT OPINION

Case: Matthew J. Blinderman
Docket Number: 15789-10S
Judge: Goeke
Opinion Type: bench
Filed: 06/23/2011
Pages: 6

UNITED STATES TAX COURT WA SHINGTON, DC 20217 MATTHEW J. BLINDERMAN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) ) ) O R D E R Docket No. 15789-10S. 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 the transcript the trial in the above case before Judge Joseph Robert Goeke at findings of Petitioner and to respondent a copy of the pages of of Tampa, Florida, on June 7, 2011, containing his oral fact and opinion rendered at the conclusion of the trial. In accordance with the oral fact and opinion, a decision will be entered for respondent as to the deficiency and to petitioner as to the addition tg tax. findings of , gra, (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. June 23, 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 3 Bench Opinion By Judge Joseph Robert Goeke June 7, 2011 Matthew J. Blinderman v. Commissioner Docket No. 15789-10S 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. The oral findings of fact and opinion shall not be relied upon as precedent in any other case. This case was heard pursuant to the provisions of Section 7463 of the Internal Revenue Code in effect at the time the petition was filed. Pursuant to Section 7463 (b) the decision to be entered is not reviewable by any other court. Section references after this are to the Internal Revenue Code in effect for 2007, which is the year in issue in this case. And Rule references are to the Tax Court Rules of Practice and Procedure. This is a deficiency case where Respondent issued a Notice of Deficiency to the Petitioner for the year 2007. In that Notice of Deficiency the Respondent determined a deficiency in Federal Income Tax in the amount of $3,917, and an addition to tax under Section 6651(a) (1) in the amount of $463. 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 4 The deficiency relates to the disallowance of itemized deductions claimed on the Petitioner's Schedule A of the 1040 Federal Income Tax Return filed for 2007. The additions to tax relate to the fact that the Petitioner filed the return in October of 2008, which Respondent maintains was late since the return was due by April 15, 2008. At trial the Petitioner presented no evidence relative to the underlying deductions in dispute, but did testify himself and called his father as a witness concerning the circumstances surrounding the filing of his 2007 Form 1040. Petitioner has the burden of proof with respect to the deficiency amounts based upon the disallowance of the itemized deductions; T.C. Rule 142(a) and Welsh v. Helvering, 290 U.S. 111, 115 (1933). It's well known that deductions are a matter of legislative grace, and that the taxpayers bear the burden of proving their entitlement to deductions. Petitioner freely admitted that he had no substantiation for the underlying deductions in dispute in this case, and the Court is left with no choice but to sustain the deficiency amounts determined by Respondent because of the Petitioner's failure of proof. Heritage Reporting Corporation (202) 628-4888 5 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 We now turn to the additions to tax under Section 6651(a) (1). The Petitioner has the burden of establishing that he had reasonable cause for his failure to file the return for the year 2007 by April 15, 2008. The parties have stipulated the return was not filed until October of 2008. So Respondent has carried the burden of going forward with the evidence to support the addition to tax. At trial Petitioner himself testified that he believed he had filed an extension requesting time until October 15, 2008 to file the 2007 return. Petitioner's testimony in this regard was vague, but then he called his father as a witness and his father testified specifically that an extension was prepared and was mailed by himself, and that he had previously filed for extensions.with the Internal Revenue Service and felt this was done in the same form as other extensions he had done over many years. Respondent had no contrary evidence other than the fact that Respondent did establish there was no record with the Internal Revenue Service that this request for extension had been filed. Given the facts presented and the credible testimony of Petitioner's father, we believe that the Petitioner was reasonable in presuming that he had 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 6 requested an extension through October 15, 2008, despite the fact that there is no record of the Internal Revenue Service having received such extension. So under the limited circumstances of this case we determine that the addition to tax under Section 6651(a) (1) is not applicable because Petitioner has established reasonable cause for his delinquent filing of his 2007 Federal Income Tax Return. As a result of this opinion a decision will be entered for the Respondent relative to the deficiency amount in the amount of $3,917, and the decision will be entered for the Petitioner concerning the additions to tax under Section 6651(a) (1). This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 1:44 p.m., the bench opinion in the above-entitled matter was concluded.) // // // // // // Heritage Reporting Corporation (202) 628-4888 7 Certificate of Transcriber and Proofreader CASE NAME: Matthew J. Blinderman v. Commissioner DOCKET NUMBER: 15789-10S We, the undersigned, do hereby certify that the foregoing pages, numbers 1 through 6 inclusive, are the true, accurate and complete transcript prepared from the tape made by electronic recording by Gretchen Schultz, on June 7, 2011 before the United States Tax Court at its session in Tampa, Florida, in accordance with the applicable provisions of the current verbatim reporting contract of the Court, and have verified the accuracy of the transcript by comparing the printed transcript against the verbal recording. (Signature of Transcriber) (Print-Transcriber Name) Gretchen L. Schultz 6/13/2011 (Date) (Signature of Proofreader) (Print-Proofreader Name) Rebecca L. McCrary 6/14/2011 (Date) Heritage Reporting Corporation (202) 628-4888