TAX COURT OPINION

Case: Al Pierro
Docket Number: 18809-07
Judge: Colvin
Opinion Type: bench
Filed: 11/05/2009
Pages: 8

UNITED STATES TAX COUR T WASHINGTON, DC 2021 7 AL PIERRO, Petitione r V . Docket No . 18809-07 . 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 in the above case before Judge Joseph Robert Goekeat Los Angeles, California, on September 17, 2009, 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, decision will be entered for respondent . (Signed) Joseph Robert Goeke Judge Dated : Washington, D .C . November 5, 2009. Vp Nag122009 %ER 3 1 Bench Opinion by Judge Joseph Robert Goeke 2 September 17, 200 9 3 Al Pierro Docket No . 18809-07 4 The Court has decided to render ora l 5 findings of fact and opinion in this case and the 6 following represents the Court's oral findings of fact 7 and opinion . The oral findings of fact and opinio n 8 shall not be relied upon as precedent in any other 9 case . 10 This is a deficiency case in which the 11 Respondent determined that the Petitioner had a 12 deficiency in income tax for 2002 in the amount of 13 $2,160 . Respondent, in a Notice of Deficiency, also 14 asserted additions to tax under Section 6651(a)(1) and 15 (2) because the Petitioner did not file an income tax 16 return for 2002 . 17 Section references throughout this Bench 18 Opinion are to the Internal Revenue Code . 19 Petitioner maintains that the income i n 20 question was actually received by a church and not by 21 himself, and that the church should be treated as the 22 taxpayer rather than himself . 23 Petitioner was a resident of California when 24 the petition was filed in this case . This case arises 25 from a class action lawsuit against the Department o f Heritage Reporting Corporation (202) 628-4888 4 1 Agriculture . A District Court opinion confirmed the 2 reasonableness and fairness of a consent decre e 3 entered between the class members of which Petitioner 4 was one and Dan Glickman, the then secretary of th e 5 Department of Agriculture . 6 The opinion of the District Court i s 7 reported as Piaford v . Glickman , 185 F .R .D . 82 (DDC 8 1999) . The District Court's opinion was affirmed b y 9 the Court of Appeals for the District of Columbia F3CL 10 Circuit in an opinion reported at 206 d, 1212 (D C 11 Circuit 2000) . 12 The reported District Court opinion makes no 13 reference to churches or religions as being part o f 14 the class subject to the settlement . The District 15 Court opinion does set forth the terms of th e 16 settlement . One of the terms is that the Department 17 of Agriculture would pay twenty-five percent of the 18 settlement amount, or $12,500, in tax directly to the 19 Internal Revenue Service on behalf of the members of 20 the class to satisfy income tax owed by members of the 21 class concerning the settlement . 22 Respondent represents the bulk of th e 23 settlement was paid to the Petitioner in 2001, but 24 Respondent's records and Respondent's assertions at 25 trial in this case are to the effect that $12,500 wa s Heritage Reporting Corporation (202) 628-4888 5 1 2 3 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 paid by the Department of Agriculture to the Interna l Revenue Service on the account of Petitioner's socia l security number in 2002 . We find based upon th e Internal Revenue Service records in evidence that, i n fact, such payment was made on behalf of th e Petitioner in 2002 . Petitioner's position is that the money wa s paid to him as agent for his church and that it shoul d not be taxed to him . He also asserts that he is a minister of the church and therefore is-not taxable . The trial of the case began on May 4 th, 2009 . At that time, Petitioner claimed to have documents , which would support the fact that the alleged churc h was the actual taxpayer . After receiving evidenc e from Respondent, the case was adjourned for th e purpose of allowing the Petitioner to provide th e additional evidence he asserted he had available . He was instructed to provide the evidence to Responden t by July 1st, 2009 and to come to the Recall of the cas e on September 14th, 2009 and provide testimony an d additional evidence to support his position . When the case was recalled on September 14th , 2009 for further trial, Petitioner failed to appear . The case was then recalled again on September 15th , 2009, and Petitioner again failed to appear . Bu t Heritage Reporting Corporation (202) 628-4888 6 1 Respondent's counsel provided the documents that the 2 Petitioner had produced in July 2009 in accord with 3 the Court's previous order . These documents wer e 4 received in the record as evidence and the record in 5 the case was closed . 6 The additional documents, which Petitioner 7 produced in accord with the Court's order t o 8 Respondent in July 2009 include one statement o f 9 financial activity in an account in the name of Power 10 Mountain - The Church . This activity is dated in May 11 of 2001 . 12 The additional information included in the 13 Petitioner's production to Respondent include s 14 correspondence, which he signed and othe r 15 correspondence he received from state and county tax 16 authorities concerning his assertion relative to the 17 Power Mountain Church . This information an d 18 documentation simply does not support Petitioner' s 19 assertion that he was an agent of a church he received 20 the $12,500 benefit from the Department of Agriculture 21 in 2002 . 22 In general, Respondent's determinations in a 23 Notice of Deficiency are presumed correct, and the 24 burden of proof is on the Petitioner to establish 25 otherwise . Tax Court Rule of Practice and Procedur e Heritage Reporting Corporation (202) 628-4888 7 1 142(a)(1) ; and Welsh v . Helvering, 290 US 111, 115 2 (1933) . 3 Section 6201(d) provides that in any Court 4 proceeding if a taxpayer asserts a reasonable dispute 5 with respect to any item of income reported on an 6 information return, such as a Form 1099 filed by a 7 third party, and the taxpayer has fully cooperate d 8 with the Internal Revenue Service, Respondent has the 9 burden of producing reasonable and probativ e 10 information concerning the deficiency in addition to 11 the Form 1099 itself . 12 We find that the Petitioner has failed to 13 assert information that would generate a reasonable 14 dispute as to his receipt of the income in question . 15 And we also find that Petitioner not cooperated with /A 5 16 Respondent in providing information to support hi s 17 position . Accordingly, it is clear that Section 18 6201(d) does not apply to the facts of this case . 19 Section 61(a) provides that generally gross 20 income includes income from whatever source derived . 21 The term, gross income, includes the payment of a n 22 individual's tax liability on his behalf . Old Colony 23 Trust Company v . United States , 279 US 716, 72 9 24 (1929) . 25 Petitioner's arguments that the amounts pai d Heritage Reporting Corporation (202) 628-4888 8 1 on his behalf should have been paid to his church or 2 were, in fact, taxable to his church as opposed t o 3 himself is without merit . Petitioner's provided no 4 evidence that he, in fact, operated as an agent of a 5 church . 6 Even if we assume that the church is a 7 viable entity and it does exist, it does not follow 8 that the amounts in question would not be taxable to 9 the Petitioner . Without a principle agen t 10 relationship between the church and the Petitioner, he 11 cannot assign income to the church to avoid payin g 12 taxes . McGahen v . Commissioner , 76 TC 468 (1981) . 13 Petitioner has simply provided no credible 14 evidence that would lead the Court to conclude tha t 15 anyone other than himself was the taxpayer in question 16 in this case . See also Stevenson v . Commissioner , 79 17 TC 995 (1982), and Kelly v . Commissioner , 62 TC 13 1 18 (1974) . 19 As previously stated, this case als o 20 involves additions to tax under Section 6651(a)(1) and 21 (a)(2) . Section 6651(a)(1) imposes an addition to tax 22 for failure to file a return on or before th e 23 prescribed filing date unless it is shown that the 24 failure to file is due to reasonable cause and not 25 willful neglect . Heritage Reporting Corporation (202) 628-4888 1 Petitioner provided no evidence that woul d 2 support a finding of reasonable cause in this case , 3 and Respondent ' s records demonstrate that Petitione f, hq5 ta 9 4 not filed a federal income tax return for the yea r 5 2002 . We find this evidence to be conclusive in light 6 of Petitioner ' s failure to rebut Respondent ' s position 7 and failure to show a reasonable cause . Therefore, we 8 find that Section 6651 ( a)(1) is applicable to the tax 9 obligation of the Petitioner for the year 2002 . 10 Section 6651 ( a)(2) applies to the failure to 11 pay the balance of tax owed within the time prescribed 12 by law . The evidence in the record establishes that 13 the Petitioner failed to pay the balance of tax owed 14 within the time prescribed by law . Petitione r 15 provided no reasonable basis for his failure to do so . 16 Therefore , we uphold the addition to tax under Section 17 6651(a)(2) . 18 Based upon the foregoing analysis, a 19 decision will be entered for Respondent . This 20 concludes the Court ' s oral findings of fact and 21 opinion in this case . 22 (Whereupon , at 12 :25 p .m ., the Benc h 23 Decision in the above - entitled matter was concluded .) 2 4 25 Heritage Reporting Corporation (202) 628-4888