Court Opinion

ID: 4336496
Source: CourtListenerOpinion
Date Created: 2018-11-14 02:52:56.635354+00
Date Added: 2024-06-11T07:50:10.396029
License: Public Domain

T.C. Summary Opinion 2007-78

                     UNITED STATES TAX COURT

               JAMES EDWARD TAYLOR, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent

     Docket No. 601-06S.                  Filed May 22, 2007.

     James Edward Taylor, pro se.

     Aaron D. Gregory, for respondent.

     COUVILLION, Special Trial Judge:    This case was heard

pursuant to section 7463 of the Internal Revenue Code in effect

at the time the petition was filed.1    Pursuant to the provisions

of section 7463(b), the decision to be entered is not reviewable

     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year at issue. All
Rule references are to the Tax Court Rules of Practice and
Procedure.
                                - 2 -

by any other court, and this opinion shall not be treated as

precedent for any other case.

     In a notice of deficiency, respondent determined a

deficiency of $33,456 in petitioner’s Federal income tax for the

year 2003; an addition to tax under section 6651(a)(1) in the

amount of $6,211; an addition to tax under section 6651(a)(2) in

the amount of $2,208.48; and an addition to tax under section

6654.    At trial, respondent conceded to a reduction of the

deficiency from $33,456 to $31,367 and conceded the section

6651(a)(2) addition to tax.2    Additionally, the parties reached a

basis of settlement on unreported wage and salary income paid to

petitioner during the year at issue, as well as income realized

by petitioner from real estate sales during that year.3

Subsequent to trial, respondent conceded the addition to tax

under section 6654.

     2
      The deficiency is based upon respondent’s determination
that petitioner realized net income from a trade or business
activity. In the notice of deficiency, petitioner’s gross
receipts from that activity were determined to be $91,000. At
trial, respondent conceded to a reduction of the gross receipts
to $83,720, resulting in a reduction of the deficiency to
$31,367, as well as a reduction in the secs. 6651(a)(1) and 6654
additions to tax. At trial, respondent further conceded the sec.
6651(a)(2) addition to tax, which also necessitates a
recomputation of the sec. 6651(a)(1) addition to tax. The
decision, therefore, will be entered under Rule 155.
     3
      The parties agreed that petitioner earned wages of $54,869
during the year at issue from Lawyers Title Insurance Corp. on
which there were income tax withholdings of $5,850. The parties
further agreed that petitioner earned no income from real estate
sales during the year at issue.
                               - 3 -

     Some of the facts were stipulated or otherwise agreed to

and, accordingly, are so found.   The Court incorporates by

reference a written stipulation of facts submitted by the parties

at trial.   At the time of trial, petitioner was a legal resident

of Virginia.4

     Based on the representations of the parties at trial, all

adjustments in the notice of deficiency were settled.   However,

petitioner contended at trial that he was entitled to two

dependency exemption deductions for his children.   He presented

no evidence to establish his entitlement to such deductions, such

as, for example, the names and ages of the claimed dependents,

whether he or his former spouse had custody of the children, the

total support provided to the claimed dependents from all sources

during the year at issue, and whether the support he provided

constituted more than one-half of the support for each child.     In

addition, petitioner did not file a Federal income tax return for

the year at issue.

     Section 151(c) allows taxpayers an annual exemption amount

for each “dependent” as defined in section 152.   Under section

     4
      At the conclusion of the trial, petitioner was ordered to
file an opening brief. Petitioner submitted an opening brief;
however, the brief was not filed and was returned for copies as
required by Rule 151(d). Respondent was ordered to file an
answering brief, and a brief was submitted to the Court by
respondent. That brief, however, was not filed and was returned
because petitioner’s brief was not filed. Petitioner has not
resubmitted his brief.
                               - 4 -

152(a), the term “dependent” means certain individuals, such as a

son, daughter, stepson, or stepdaughter, “over half of whose

support, for the calendar year in which the taxable year of the

taxpayer begins, was received from the taxpayer (or is treated

under subsection (c) or (e) as received from the taxpayer)”.

     Section 152(e) provides a special support test in the case

of divorced parents or parents who have never been married with

respect to the dependency exemption deductions for such children.

See King v. Commissioner, 121 T.C. 245, 250 (2003).    Absent

exceptions not applicable here, if both parents together provide

over half of the support of a child, the parent having custody of

the child for the greater portion of the taxable year is entitled

to the dependency exemption for such child.    Sec. 152(e)(1).

     There are no facts that were presented to the Court upon

which the Court could decide whether petitioner is entitled to

the claimed dependency exemption deductions.    On the record

presented, the Court has no choice but to reject petitioner’s

claim to the claimed deductions.

     In the notice of deficiency, respondent determined that

petitioner was liable for the section 6651(a)(1) addition to tax

for the failure to file a timely Federal income tax return for

the year at issue.   As noted above, petitioner did not file a

Federal income tax return for 2003; yet, petitioner admittedly

earned income that year.   Petitioner did not establish that his
                               - 5 -

failure to file the return was due to reasonable cause and not

due to willful negligence.   See Higbee v. Commissioner, 116 T.C.
438, 446 (2001).   The addition to tax under section 6651(a)(1)

is, therefore, applicable, and respondent is sustained on that

determination.

                                       Decision will be entered

                               under Rule 155.