Court Opinion

ID: 6335765
Source: CourtListenerOpinion
Date Created: 2022-04-28 14:01:33.747751+00
Date Added: 2024-06-11T09:24:01.988619
License: Public Domain

United States Tax Court
                                 Washington, DC 20217

Joseph C. Honer, Jr.,

                Petitioners

                v.                             Docket Nos. 3985-20.

COMMISSIONER OF INTERNAL
REVENUE,

                Respondent

                                      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 in the above
captioned case before Judge Christian N. Weiler at Tampa, Florida on March 30,
2022, containing his Oral Findings of Fact and Opinion rendered at the trial session
at which the case was heard.

      In accordance with the Oral Findings of Fact and Opinion, decision will be
entered for respondent.

                              (Signed) Christian N. Weiler
                                        Judge

                                  Served 04/28/22
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1    Bench Opinion by Judge Christian N. Weiler

2    March 30, 2022

3    Joseph C. Honer, Jr. v. Commissioner

4    Docket No. 3985-20

5               THE COURT:   The Court has decided to render oral

6    findings of fact and opinion in this case, and the

7    following represents the Court's oral findings of fact and

8    opinion.   The oral findings of fact and opinion shall not

9    be relied upon as precedent in any other case.

10              This bench opinion is made pursuant to the

11   authority granted by I.R.C. §7459(b) of the Internal

12   Revenue Code of 1986, as amended, and Rule 152 of the Tax

13   Court Rules of Practice and Procedure.   Unless otherwise

14   indicated, all statutory references are to the Internal

15   Revenue Code, Title 26 U.S.C., in effect at all relevant

16   times, and all Rule references are to the Tax Court Rules

17   of Practice and Procedure.

18              Joseph C. Honer, Jr., petitioner, resided in

19   Florida at the time his petition was filed, and appeared

20   at trial pro se.   Chardea C. Murray appeared on behalf of

21   the Commissioner of Internal Revenue, respondent.

22              This case arises from a notice of deficiency

23   dated January 6, 2020, issued to petitioner proposing an

24   increase in tax of $6,491, and an addition to tax under

25   section 6662 in the amount of $1,298 for the 2017 tax
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1    year.   Petitioner timely filed his petition with the Tax

2    Court on February 27, 2020.

3               Before trial the parties agreed that petitioner

4    underreported his gains on the sales of securities by

5    $26,255, and dividends of $9,775 for 2017.    Before trial

6    respondent conceded that petitioner is not liable for the

7    addition to tax under section 6662.   The remaining issues

8    for trial are whether petitioner is liable for a tax

9    deficiency and whether petitioner has an overpayment for

10   2017.

11                         Findings of Fact

12              The parties filed with the Court a stipulation

13   of facts, with accompanying exhibits, that is incorporated

14   herein by this reference.

15              Petitioner timely filed his personal income tax

16   return for 2017, reporting adjusted gross income of

17   $139,441, taxable income of $103,687, and tax liability of

18   $23,328.   In total, petitioner paid $36,424 in taxes for

19   2017, which consisted of tax withholding of $6,000,

20   estimated tax payments of $20,000, and carry forward

21   credits from a prior tax period of $10,424.    On his 2017

22   tax return, petitioner chose to apply any overpayment of

23   his taxes to the 2018 tax year and the Internal Revenue

24   Service (hereinafter "IRS") applied $13,096 to

25   petitioner's 2018 tax year.   Petitioner has an overpayment
                                                                  5
1    or credit balance for 2018 and refund checks have been

2    issued to petitioner.

3               In 2020 the IRS conducted a review of

4    petitioner's 2017 tax return.    The IRS received a third-

5    party report from Vanguard Brokerage Services reflecting

6    taxable dividends of $9,775 received by petitioner in

7    2017.   The IRS also received third-party reports from

8    Boston Financial Data Services and Vanguard Brokerage

9    Services, reflecting sale of taxable securities by

10   petitioner of $103,056.    Petitioner's 2017 income tax

11   return reported no dividends and the sale of taxable

12   securities of $76,701.

13              Based on these third-party reports, the IRS

14   adjusted petitioner's return by including as additional

15   income dividends of $9,775 and additional sales of taxable

16   securities of $26,355, which is the difference between the

17   amount reported from third-parties and the amount shown on

18   petitioner's 2017 tax return.

19              On March 2, 2022 respondent filed a motion for

20   entry of decision based on the filed stipulation.    On

21   March 14, 2022, petitioner filed his response opposing

22   respondent's motion for entry of decision.    On March 16,

23   2022, petitioner filed a motion for declaratory judgment.

24   During trial petitioner and respondent both withdrew their

25   respective motions.     At trial, petitioner also moved to
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1    seek sanctions against respondent and requested that the

2    Court hold respondent in contempt.

3                                Opinion

4    I.        Summary of Petitioner's Arguments

5              Petitioner contends that respondent acted in bad

6    faith in handling his case and objects to the length of

7    time this matter has taken to be resolved.     Petitioner

8    disputes there is a deficiency in tax owed and points the

9    Court to the amount of tax he paid for 2017.     In other

10   words, petitioner argues there is no tax deficiency since

11   the total tax due - as adjusted to include the deficiency

12   - would still reflect an overpayment after considering the

13   amounts paid.

14             In short petitioner's argument conflates the

15   issue of a tax deficiency with the issue of whether there

16   is an overpayment of tax.    The two issues are not

17   synonymous; rather, they are parallel issues and will be

18   separately addressed herein by the Court.

19   II.       Is a Tax Deficiency Due by Petitioner?

20             When the IRS determines that there is a

21   deficiency in tax due, the IRS is authorized to send

22   notice of such deficiency to the taxpayer by certified

23   mail or registered mail.    See I.R.C. § 6212.   When a

24   petition is timely filed by a taxpayer in response to the

25   IRS notice, the Tax Court has jurisdiction to redetermine
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1    the correct amount of the deficiency.   See I.R.C. § 6214.

2    The redetermined deficiency as decided by the Tax Court is

3    then assessed by the IRS.   See I.R.C. § 6215.

4               We find that petitioner is liable for a tax

5    deficiency of $6,491.   This tax deficiency is based on the

6    stipulated adjustments to petitioner's 2017 tax return,

7    and includes the additional income that was not originally

8    reported by petitioner of taxable dividends of $9,775 and

9    sale of securities of $26,355.

10   III.       Is there an Overpayment by Petitioner?

11              Based on the original return as filed by

12   petitioner, there was an original overpayment of the tax

13   of $13,096.   Petitioner argues that after the increased

14   tax deficiency of $6,491, no balance should remain since

15   the tax deficiency is less than petitioner's overpayment

16   amount.   However, petitioners argument fails to consider

17   how he directed the overpayment amount to be carried

18   forward to 2018.   The IRS honored petitioner's request and

19   applied $13,096 to petitioner's 2018 tax year.

20   Consequently, we find no overpayment remains for 2017.

21   IV.        Can the Court Require the IRS to Apply
                Petitioner's Overpayment for 2018 to His 2017
22              Tax Deficiency?

23              Under section 6512(b)(1) we have jurisdiction to

24   find that there is a deficiency in tax, or to find that

25   there is no deficiency in tax, and, in either situation,
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1    we also have jurisdiction to determine whether there has

2    been an overpayment.     Steinberg v. Commissioner, T.C.

3    Memo. 1999-311, aff'd, 19 F. App'x 498 (9th Cir. 2001).

4    However, the Tax Court is a court of limited jurisdiction

5    and a timely filed petition in response to a notice of

6    deficiency only invokes the Court's jurisdiction over the

7    tax year at issue.     See I.R.C. § 6213(a).

8              Accordingly, our jurisdiction in this case is

9    limited to petitioner's 2017 tax year, and we have no

10   jurisdiction to order the IRS to offset or apply

11   petitioner's 2018 overpayment amount to petitioner's tax

12   deficiency for 2017.     See Savage v. Commissioner, 112 T.C.

13   46 (1999); Buckner v. Commissioner, T.C. Memo. 2013-243.

14             Although we do not have jurisdiction to order

15   the IRS to apply the overpayment amount from 2018 to 2017,

16   this may very well be done by the IRS once the 2017 tax

17   deficiency amount is assessed against petitioner, after a

18   decision is entered by the Tax Court.

19   V.        Other Issues Raised by Petitioner at Trial

20             At trial petitioner also moved to seek sanctions

21   and requested an amount of $250, reflecting what he

22   considered to be costs he incurred in this case,

23   comprising of filings fees, certified mailings, and

24   transportation costs.

25             Under the current circumstances, any delays in
                                                                 9
1    the handling of this case were not intentional but were

2    likely caused by the COVID-19 pandemic.     Petitioner's

3    arguments for sanctions are entirely unsubstantiated.

4    Therefore, we deny petitioner's request.

5              Finally, petitioner requested that we hold

6    respondent in contempt of court; however, petitioner

7    provides no evidence of respondent failing to comply with

8    any order of the Court.     Accordingly, we likewise deny

9    this request.

10             Consistent with the preceding discussion, a

11   decision will be entered for respondent.

12             This concludes the Court's oral findings of fact

13   and opinion in this case.

14             (Whereupon, at 10:43 a.m., the above-entitled

15             matter was concluded.)

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1            CERTIFICATE OF TRANSCRIBER AND PROOFREADER

2    CASE NAME:    Joseph C. Honer, Jr. v. Commissioner

3    DOCKET NO.:   3985-20

4        We, the undersigned, do hereby certify that the

5    foregoing pages, numbers 1 through 10 inclusive, are the

6    true, accurate and complete transcript prepared from the

7    verbal recording made by electronic recording by Adrian

8    Morris on March 30, 2022 before the United States Tax

9    Court at its session in Tampa, FL, in accordance with the

10   applicable provisions of the current verbatim reporting

11   contract of the Court and have verified the accuracy of

12   the transcript by comparing the typewritten transcript

13   against the verbal recording.

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17       _______________________________________________

18       Meribeth Ashley, CET-507                 4/3/22

19       Transcriber                              Date

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22       _______________________________________________

23       Lori Rahtes, CDLT-108                    4/3/22

24       Proofreader                              Date

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