DocketNumber: No. 13402-02L
Judges: "Jacobs, Julian I."
Filed Date: 7/12/2004
Status: Non-Precedential
Modified Date: 4/18/2021
Decision was entered for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
JACOBS, Judge: Pursuant to
Some of the facts have been stipulated and are so found. The stipulation of facts and the exhibits submitted therewith are incorporated herein by this reference.
At the time the petition in this case was filed, petitioner resided in Clearwater, Florida.
Petitioner graduated from Stetson University in Deland, Florida, where he received a bachelor of science degree in physics. After graduating from college, petitioner served in the military, and, after a 3-year tour of duty with the Signal Corps, he attended and graduated from law school. Petitioner returned to the military and practiced criminal law in the U.S. Army at Fort Ord, California. He later worked as an attorney for the Department of Energy, where he practiced patent law.
In 1985, petitioner moved to Clearwater, Florida, where he has been practicing law as a sole practitioner. The bulk of his private law practice has consisted of criminal work. Petitioner failed to pay employment taxes pertaining to his law practice, and the Internal Revenue Service (IRS) assessed those taxes.
Petitioner filed delinquent income tax returns for 1996-99 after he was contacted by a representative of the IRS. Petitioner*168 and his former wife filed joint returns for 1996-98. Petitioner filed his return for 1999 as single. He failed to remit all the taxes shown as due on the returns. The IRS assessed additions to tax for late filing under
Year Date Return Filed Assessment Date
____ _________________ _______________
1996 5/7/01
1997 5/7/01
1998 5/7/01
1999 4/16/01
Petitioner and the IRS entered into an installment agreement in connection with the collection of petitioner's tax liability. This agreement covered both petitioner's income and employment tax liabilities, as well as additions to tax and interest. Petitioner defaulted on his agreement after making two monthly payments.
On December 7, 2001, the IRS filed a notice of Federal tax lien for income taxes (including additions to tax and interest) owed by petitioner for 1996-99. On December 11, 2001, the IRS*169 sent petitioner a Form 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing Under
Petitioner's case was assigned to Appeals Officer James H. Reagan. On April 2, 2002, Appeals Officer Reagan sent petitioner a letter in which a face-to-face hearing, as authorized by
On June 20, 2002, Appeals Officer Reagan sent petitioner a letter in which Appeals Officer Reagan recommended that petitioner consider making a partial payment and pay the balance due the IRS in installments. The letter stated that if petitioner wanted to enter into an installment agreement, then, by July 8, 2002, petitioner would have to complete a Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, (which was enclosed with Appeals Officer Reagan's*170 letter) and provide Appeals Officer Reagan with copies of petitioner's personal and business bank statements and check registers for March-May 2002. Petitioner did not complete the Form 433-A or submit copies of his bank statements to the IRS by July 8, 2002. On July 18, 2002, the IRS sent petitioner a Notice of Determination Concerning Collection Action(s) Under
The interest cannot be abated since the interest is assessed
on underpayments in tax, and the abatement provisions or
interest on a deficiency attributable in whole or in part
to any unreasonable error [or] delay by an officer or employee
of the Internal Revenue Service (acting in his official
capacity) in performing a ministerial or managerial*171 act.
The reason given for denying petitioner's request for the abatement of additions to tax was:
The delinquency penalty and failure to pay penalty will not be
abated since you have failed to show that your failure to timely
file and pay the tax due was due to reasonable cause and not
willful neglect. The estimated tax penalty will not be abated
since you have failed to show that you qualify for a statutory
waiver provided by
On August 20, 2002, petitioner filed a petition with this Court under
OPINION
Preliminarily we deal with a jurisdictional issue. Petitioner maintains that we should consider his income and employment tax liabilities together because the assigned IRS revenue officer pursued the collection of petitioner's income tax liabilities in conjunction with his employment tax liabilities. Respondent, on the other hand, objects to petitioner's raising of respondent's collection activities of petitioner's employment tax liability. Respondent maintains that the lien in question pertains only to petitioner's unpaid income taxes for 1996-99, not petitioner's unpaid employment taxes. In this regard, respondent asserts that the filing of the lien is the event that triggered petitioner's right to a
We now turn to whether respondent's denial of petitioner's request for the abatement of additions to tax was an abuse of discretion. Both parties acknowledge that this Court has jurisdiction in this
The income tax assessments for the years in question include assessments for additions to tax under
A delay in filing a return is due to a reasonable cause "If the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time".
more than an inconvenience to the taxpayer. It must appear that
substantial financial loss, for example, loss due to the sale of
property at a sacrifice price, will result to the taxpayer from
making payment on the due date of the amount with respect to
which the extension is desired. If a market exists, the sale of
property at the current market price is not ordinarily
considered as resulting in an undue hardship.
In order to avoid the
The reasons offered by petitioner for his failure to timely file his returns and pay his income taxes are (1) his marital troubles, which concluded in divorce, and (2) his financial setbacks caused by his ex-wife's spending habits and his deployment to Saudi Arabia during Operation Desert Shield/Storm, as a reservist, from November, 28, 1990, until June 29, 1991.
In defense of respondent's refusal to abate the late-filing and late-payment additions to tax, respondent states in his posttrial brief filed with the Court the following:
With respect to his marital troubles, petitioner failed to
establish how the illness of his wife, and his eventual divorce
from her, prevented him from timely filing and paying his taxes
over a four year period, i.e., from April 1997 through May of
2001. Petitioner did not allege, for example, that during this
four year stretch he was unable to function due to an emotional
or physical disability connected to his troubled marriage. The
evidence is to the contrary. During this time, petitioner was
fully able to carry out the duties of an attorney representing
*177 clients in criminal matters, as well as manage his sole practice
on a day to day basis. Moreover, petitioner was not hospitalized
or otherwise incapacitated during this period.
In this regard it is important to note that it is only
after the revenue officer assigned to the case contacted
petitioner, requested his delinquent income tax returns, and
commenced collection activities, that petitioner came forward
and filed his returns during 2001. This evidence tends to negate
that petitioner's delinquency was due to disability or other
reasonable cause.
* * * * * * *
Petitioner's argument that his service during Desert Storm
during 1990 and 1991 somehow affected his ability to comply with
internal revenue laws almost six years later is implausible, and
not supported by any evidence in the record. Petitioner
abandoned that argument upon questioning by the court.
Respondent's position in this regard is well taken. The Court further notes that petitioner did not provide Appeals Officer Reagan or this Court with any financial records that might have supported petitioner's claim of undue hardship. We may infer that petitioner had no records that would*178 have supported his claim.
We have carefully considered the reasons offered by petitioner for his failure to timely file his 1996-99 tax returns and timely pay the amounts shown on the returns for such years when filed belatedly. Neither reason offered by petitioner constitutes "reasonable cause".
As to the
In sum, we conclude that respondent's denial of petitioner's request for abatement of the additions to tax under
Decision will be entered for respondent.