Brooks v. Comm'r , 93 T.C.M. 1078 ( 2007 )

T.C. Memo. 2007-80
UNITED STATES TAX COURT
ROBERT S. BROOKS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 24689-04. Filed April 4, 2007.
P failed to file an income tax return or pay any amount
of Federal income tax for 2002. R issued a notice of
deficiency for the amount of the income tax plus additions
to tax. P filed a petition for review of the deficiency,
and both parties have moved for summary judgment.
Held: Summary judgment in favor of R is appropriate
with respect to P’s liability for the Federal income tax
plus the addition to tax for failure to file a return.
Summary judgment is not appropriate for the additions to tax
for failure to pay tax shown on a return or failure to make
estimated tax payments.
Robert S. Brooks, pro se.
Innessa Glazman-Molot, for respondent.
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MEMORANDUM OPINION
NIMS, Judge: Respondent determined a deficiency of $13,876
in petitioner’s Federal income tax for 2002. Respondent also
determined additions to tax of $3,122.10 for failure to file a
return under section 6651(a)(1), $1,040.70 for failure to pay tax
shown on a return under section 6651(a)(2), and $463.69 for
failure to pay estimated tax under section 6654(a).
Petitioner objects to paying the income tax on numerous
grounds, all of which are protester-type arguments. The issues
for our determination are whether respondent correctly determined
petitioner’s tax liability and the additions to tax.
Both parties have moved for summary judgment pursuant to
Rule 121. Unless otherwise indicated, all section references are
to the Internal Revenue Code in effect for the tax year in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
Background
At the time he filed the petition in this case, petitioner
resided in West Virginia.
In 2002, petitioner received W-2 income in the amount of
$68,708 from the Arlington County School Board. He also
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received interest income in the amount of $3,909.00 from First
Exchange Bank in Mannington, West Virginia. Petitioner did not
have any income taxes withheld, and he made no other tax payments
for the year.
Petitioner did not file an income tax return for 2002.
Respondent asserts that on August 2, 2004, a substitute for
return was filed on petitioner’s behalf pursuant to section
6020(b). On September 28, 2004, respondent mailed a notice of
deficiency to petitioner showing the calculated income tax along
with additions to tax and interest. After brief correspondence
with the Internal Revenue Service (IRS), petitioner filed his
petition challenging the deficiency and resulting additions to
tax.
Discussion
Petitioner makes various tax protester-type arguments,
ultimately concluding that no statutes render him liable for
Federal income taxes. For example, among other things,
petitioner claims in his amended petition that no deficiency for
2002 exists based on the definition of “deficiency”, that since
he received no income in the “constitutional” sense he had no
taxable income for 2002, and that because he received no income
in the “constitutional” sense, he determined that he had no
taxable income and therefore no tax liability to report. As we
have said of similar arguments on previous occasions,
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petitioner’s arguments are frivolous. We need not refute them
with somber reasoning and copious citation of precedent; to do so
might suggest that they have some colorable merit. See Crain v.
Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984); Guthrie v.
Commissioner, T.C. Memo. 2006-81. We hold that petitioner is
liable for Federal income tax for 2002 and the deficiency of
$13,876 as determined by respondent. Summary judgment for this
deficiency is granted in favor of respondent.
As previously stated, respondent also seeks additions to tax
of $3,122.10 for failure to file a return under section
6651(a)(1), $1,040.70 for failure to pay tax shown on a return
under section 6651(a)(2), and $463.69 for failure to pay
estimated tax under section 6654(a). Under section 7491(c), the
Commissioner has the burden of production as to whether a
taxpayer is liable for an addition to tax and must provide
sufficient evidence showing that imposing the addition to tax is
appropriate in the particular case. Higbee v. Commissioner, 116
T.C. 438 (2001).
Respondent has met this burden of production for the section
6651(a)(1) failure to file addition to tax. Respondent has shown
that petitioner did not file an income tax return for 2002, and
petitioner has set forth no specific facts showing that there is
a genuine issue for trial as to whether his failure to file was
due to reasonable cause. Accordingly, petitioner is liable for
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the $3,122.10 addition to tax under section 6651(a)(1), and we
shall grant summary judgment in favor of respondent on this
issue.
We hold that summary judgment is not appropriate regarding
the $1,040.70 addition to tax pursuant to section 6651(a)(2) for
failure to pay tax shown on a return by the due date for payment.
For the section 6651(a)(2) addition to tax to apply, there must
be an amount of tax shown on a return. Cabirac v. Commissioner,
120 T.C. 163, 170 (2003). Even where the taxpayer did not file a
valid return, as in this case, a return filed by the Secretary
pursuant to section 6020(b) is treated as a return filed by the
taxpayer under section 6651(g)(2). However, we have required
that certain elements be present for qualification as a
substitute return under section 6020(b) for section 6651(a)(2)
purposes.
To constitute a substitute return within the meaning of
section 6020(b), the components held out to be a return need to
be subscribed, contain sufficient information from which
petitioner’s tax liabilities can be calculated, and purport to be
a return. See Millsap v. Commissioner, 91 T.C. 926, 930 (1988).
We have held that certain combinations of items meet this
standard and have declined to deem others sufficient.
For example, in Hennard v. Commissioner, T.C. Memo. 2005-
275, an unsubscribed Form 1040, U.S. Individual Income Tax
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Return, a revenue agent’s report containing sufficient
information to calculate petitioner’s tax liability, a Form 4549,
Income Tax Examination Changes, and a Form 13496, IRC Section
6020(b) Certification, signed by respondent’s examination
operations manager combined to yield a substitute return. An
unsubscribed Form 1040 along with the attached revenue agent’s
report containing all relevant information also qualified as a
substitute return in Millsap v. Commissioner, supra. Finally, in
Conovitz v. Commissioner, T.C. Memo. 1980-22, we held that a Form
1040 with the taxpayer’s name, address, and Social Security
number plus a Form 1902-E, Explanation of Adjustments, showing
petitioner’s wages, standard deduction, and exemption that was
prepared at the same time and in conjunction with the Form 1040
was a substitute return.
In contrast to the above cases, we have declined to accept
other combinations of evidence as substitute returns for section
6651(a)(2) purposes. A record containing a substantially blank
and unsubscribed Form 1040 filed February 23, 2000, a notice of
proposed adjustments dated May 31, 2000, and a revenue agent’s
report attached to the notice, which contained sufficient
information from which to calculate petitioner’s tax liability,
nevertheless did not meet the standard in Cabirac v.
Commissioner, supra. In Spurlock v. Commissioner, T.C. Memo.
2003-124, an untranslatable computer printout noting a received
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date of October 7, 1999; Form 1040 with petitioner’s name,
address, Social Security number, and filing status dated
September 23, 1999; both computer-generated and manual Forms
5344, Examination Closing Record, showing petitioner’s tax
liability, payments, and adjustments; Form 4549, Income Tax
Examination Changes, dated October 18, 1999; and signed “30-day
letter” dated October 18, 1999, did not constitute a substitute
for return (SFR). In a final example, a statement of account
showing SFR document locator numbers for what were presumed to be
“dummy returns” showing only taxpayer’s name, address, and Social
Security number did not qualify as an SFR in Phillips v.
Commissioner, 86 T.C. 433 (1986), affd. in part, revd. in part on
a different issue 851 F.2d 1492 (D.C. Cir. 1988). In Wheeler v.
Commissioner, 127 T.C. 200, 210 (2006), a Form 4340, Certificate
of Assessments, Payments, and Other Specified Matters, containing
a cryptic reference to a “Substitute for Return” was not
considered sufficient for purposes of section 6020(b).
In this case, respondent asserted in his motion for summary
judgment that an SFR was prepared on petitioner’s behalf on
August 2, 2004. Respondent offered this purported “return” in an
attached exhibit containing only a Form 13496, IRC Section
6020(b) Certification, signed by respondent’s exam operations
manager, a Form 4549, Income Tax Examination Changes, and a
substantially incomprehensible computer printout of numbers and
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symbols. Notably missing is anything resembling a Form 1040 or a
transcript of account showing the entry of data used to establish
the taxpayer’s IRS account, as claimed in the certification. In
a separate exhibit, respondent offered a printout of petitioner’s
IRS account as evidence that an assessment had not been made in
this case. Though this printout appears to reflect an SFR entry
on July 26, 2004, with an accompanying document locator number,
this printout lacks any pertinent information besides the
taxpayer’s Social Security number. Even if we were to reasonably
infer that the administrative SFR entry corresponds to a dummy
return for petitioner for the year 2002, see Phillips v.
Commissioner, supra at 437, we cannot say that these documents
meet the requirements of a section 6020(b) return.
An assortment of documents spread throughout the record,
though altogether providing the requisite information, does not
constitute a return. Cabirac v. Commissioner, supra at 172.
Furthermore, simply being able to determine the tax liability
from respondent’s files does not accord them status as a return.
Spurlock v. Commissioner, T.C. Memo. 2003-124. Indeed, if such a
lack of formality were to prevail, the section 6651(a)(2) penalty
would be appropriate in every case by virtue of sections 6020(b)
and 6651(g). Cabirac v. Commissioner, supra at 172.
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Overall, to say that respondent’s evidence in this case
shows that a return meeting the requirements of section 6020(b)
was filed is too much of a stretch, especially given respondent’s
burden of production. We therefore hold that neither petitioner
nor respondent is entitled to summary judgment on this issue.
Respondent also has not met the burden of production with
respect to the section 6654 addition to tax for failure to make
estimated tax payments. To meet this burden, respondent must
show that petitioner had a “required annual payment” as set forth
in section 6654(d). Wheeler v. Commissioner, supra at 200, 210-
212. The required annual payment equals the lesser of (1) 90
percent of the tax shown on the return for the taxable year (or
90 percent of the tax for such year if no return is filed), or
(2) 100 percent of the tax shown on the individual’s return for
the preceding taxable year (if the individual filed a return for
that preceding year). Sec. 6654(d)(1)(B). We know that 90
percent of the tax for the 2002 taxable year is $12,488.40 (90
percent of $13,876). But, respondent has not offered anything
showing either the amount of tax shown on petitioner’s 2001
return or whether petitioner failed to file a return for 2001.
Since the possibility exists that petitioner filed a return for
2001 on which the amount of tax shown was zero, thus making the
lesser of the two amounts equal to zero for purposes of section
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6654(d)(1)(B), we therefore cannot definitively conclude that
petitioner had a required annual payment. Summary judgment is
not appropriate on this issue.
An appropriate order
will be issued.