TAX COURT OPINION

Case: Richard Mark Schmerman
Docket Number: 26261-10
Judge: Halpern
Opinion Type: bench
Filed: 07/11/2012
Pages: 5

UNITED STATES TAX COURT WASHINGToN, DC 20217 RICHARD MARK SCHMERMAN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) Docket No. 26261-10. ORDER 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 of the above case before Judge James S. Halpern at Phoenix, Arizona on June 6, 2012, containing his oral findings of fact and opinion rendered at the conclusion of trial. In accordance with the oral findings of fact and opinion, a decision will be entered for respondent. (Signed) James S. Halpern Judge Dated: Washington, D.C. July 11, 2012 SERVED Jul 12 2012 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 James S. Halpern June 6, 2012 Richard Mark Schmerman Docket No. 26261-10 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 Bench Opinion is made pursuant to the authority granted by § i7459 (b) of the Internal Revenue Code of 1986, as amended, and Rule 152 of the Tax Court Rules of Practice and Procedure. Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. By notice of deficiency dated August 23, 2010, Respondent determined a deficiency of $265,515 in Petitioner's federal income tax for 2007 and additions to tax of $59,740.87, $34,516.95 and $12,084.36 under Sections 6651 (a) (1) , 6651 (a) (2) and. 6654 (a) , respectively. The parties have entered into a stipulation of settled issues. Some issues are merely computational. The issues remaining for decision are (1) an adjustment increasing Petitioner's 2007 gross Heritage Reporting Corporation (20$) 628-4888 I 4 income by $23%,19f, and (2) additions to tax. The parties have stipulated certain facts. The stipulation of facts, with attached exhibits, is incorporated herein by this reference . Except as otherwise mentioned, Petitioner bears the burden of proof . See Rule 142 (a) . Petitioner received a 2007 Form 1099-MISC, Miscellaneous Income, from Charles Schwab and Co. . (Schwab) , showing non-employee compensation earned by Petitioner of $234,195. Petitioner does not dispute that he earned fees in that amount from Schwab, but he testified that all fees that he earned from Schwab were paid by it to Mutual Service Corp. (Mutual) and included in income reported by Mutual as non-employee compensation earned by Petitioner . Petitioner thus argues that to require him to include in gross income the $234,195 reported by Schwab would mean hd was required to include in gross income the same amount twice. Petitioner presents a question of fact, i.e., whether the income reported to him by Mutual includes the amount of income separately reported to him by . Schwab. Petitioner relies solely on his testimony that his income was pa d to Mutual. Without any corroborating evidence, we find Petitioner's testimony unconvincing. Petitioner called no one from Mutual or 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 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 5 a successor organization, nor did he call anyone from Schwab. He provided no paperwork confirming his testimony. Petitioner has failed to prove that his income would to any extent be double counted by including in his gross income the $2i34,195 earned from Schwab. We sustain Respondent's adjustment on that account. Section 6651(a) (1) imposes an addition to tax where a taxpayer's failure to file timely returns unless the taxpayer can establish that such failure is due to reasonable cause and not due to willful neglect. Section 6651(a) (2) imposes an addition to tax when a taxpayer fails to pay the amount of tax shown on a return by the described date unless the taxpayers shows that such failure is due to reasonable cause and not due to willful neglect. Under § 6020(b), when a taxpayer fails to make any return required by law, the IRS, acting for the Secretary, must make a return from such information as it can obtain. Under § 6651(g) (2), any return so made is treated as the taxpayer's return for purposes of § 6651(a) (2). Petitioner does not contest the § 6651(a) (1) and (2) additions except t claim that his failures were due to reasonable cause and not due to willful neglect. He argues that the fire in his office on 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 September 8, 2007, destroyed his records so that he could not make accurate returns, and this excused his failure to file and pay. Petitioner made a similar argument in Schmerman v. Commission, T.C. Memo 2010-135, and we rejected it there saying , "Lack of access to records does not constitute reasonable cause for failing to timely file a tax return. Estate of Vriniotis v. Commissioner, 79 T.C. 298, 311 (1982) (faxpayers who do not have access to their records must nevertheless file their tax returns timely using the most accurate estimates available). If necessary, the taxpayer may file an amended return once the records are available or when more accurate information is available. Ià." We likewise reject the argument here. Section 6654 provides for an addition to tax on account of the failure by an individual to pay estimated income tax. Petitioner has failed to show the application of any exception to the application of § 6654. We sustain the addition to tax under § 6654. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. DECISION WILL BE ENTERED FOR RESPONDENT. (Whereupon, at 10:05 a.m., the bench opinion in the above-entitled matter.was concluded.) Heritage Reporting Corporation (202) 628-4888