DocketNumber: No. 12651-02
Citation Numbers: 2003 T.C. Memo. 223, 86 T.C.M. 138, 2003 Tax Ct. Memo LEXIS 223
Judges: \"Chiechi, Carolyn P.\"
Filed Date: 7/29/2003
Status: Non-Precedential
Modified Date: 4/18/2021
*223 Petitioner was found liable.
MEMORANDUM OPINION
CHIECHI, Judge: Respondent determined the following deficiencies in, and additions to, petitioner's Federal income tax (tax):
Additions to Tax | ||||
Year | Deficiency | 1Sec. 6651(a)(1) | Sec. 6651(a)(2) | Sec. 6654(a) |
1996 | $ 62,718 | $ 13,661.55 | $ 3,946.67 | $ 3.164.00 |
1997 | 42,929 | 3,893.63 | 2,941.85 | 2,296.75 |
The issues remaining for decision are: 2
(1) Is the net profit for each of the years at issue from
petitioner's washing machine repair business subject to tax?
We hold that it is.
*224 (2) Is the pension income that petitioner received during 1997
subject to tax? We hold it is.
(3) Is petitioner liable for 1997 for the 10-percent additional
tax under
that he received during that year? We hold that he is.
(4) Is petitioner liable for each of the years at issue for an
addition to tax under
(5) Is petitioner liable for each of the years at issue for an
addition to tax under
Background
Some of the facts have been deemed established pursuant to the Court's Order under
At the time he filed the petition in this case, petitioner's*225 address was in Morton Grove, Illinois.
During 1996 and 1997, petitioner was engaged in a washing machine repair business from which he had net profit of $ 30,200.31 and $ 30,227.02, respectively.
On April 18, 1996, respondent received from petitioner an estimated tax payment for 1996 in the amount of $ 2,000.
On April 17, 1997, respondent received from petitioner a payment of $ 25,624 with respect to his taxable year 1996 and a document dated April 12, 1997 (petitioner's document for 1996). Respondent did not receive from petitioner any tax return or other document pertaining to his taxable year 1997.
Petitioner's document for 1996 consisted of Form 1040, U. S. Individual Income Tax Return (Form 1040), for 1996 from which petitioner had stricken much of the preprinted language, including the declaration that appeared above the place for the taxpayer's signature, and on which petitioner had made certain entries and had written certain language, including the phrase "Without Prejudice" that appeared above his signature on that document. In petitioner's document for 1996, petitioner showed $ 9,237 of interest, $ 1,632 of dividend, $ 97,284 of capital gain, $ -803 with respect to rental*226 real estate, and tax due of $ 25,624. Petitioner did not include in petitioner's document for 1996 Schedule C, Profit or Loss From Business (Schedule C), or any other schedule showing receipts and expenses with respect to the washing machine repair business that petitioner conducted during 1996.
Respondent did not file petitioner's document for 1996 as petitioner's tax return for that year. Nor did respondent file a tax return for petitioner for 1997.
Respondent issued to petitioner a notice for his taxable years 1996 and 1997. In that notice, respondent determined, inter alia, that petitioner had Schedule C net profit subject to tax of $ 67,703 and $ 116,306 for 1996 and 1997, respectively. Respondent further determined in the notice that during 1997 petitioner received pension income of $ 3,852 and that he is liable for that year for the 10-percent additional tax under
On March 7, 2003, petitioner submitted a document to the*227 Court entitled "Trial Memorandum of Petitioner" that the Court had filed (petitioner's trial memorandum). Petitioner's trial memorandum contained various statements, contentions, and arguments with respect to what constitutes income for tax purposes that the Court found in an Order dated March 10, 2003 (March 10, 2003 Order) to be frivolous and groundless. In the Court's March 10, 2003 Order, the Court reminded petitioner about
Discussion
Respondent concedes that the examination of the years at issue commenced after July 22, 1998. Consequently, respondent has the burden of production under
Petitioner acknowledges (1) that he has net profit for 1996 and 1997 from his washing machine repair business in the amounts of $ 30,201 4 and $ 30,227, 5 respectively, and (2) that he has pension income for 1997 of $ 3,852. However, it is petitioner's position that neither his net income for each of the years at issue from his washing machine repair business nor his pension income for 1997 is subject to tax.
In support of his position with respect to his net profit for each of the years at issue from his washing machine repair business, petitioner argues, inter alia, that that profit was "directly derived from the exchange of Petitioner's personal property (labor and time)" and that such profit, which petitioner refers to as "non-statutory wages", is not subject to tax. In support of his position with respect to*229 his pension income for 1997, petitioner argues that, because such income "was derived from non- statutory wages of previous years * * * the withdrawal of the earlier deposited non-statutory wages, which are non taxable funds, does not convert them to taxable gross income." 6
Petitioner's position that his net profit for each of the years at issue from his washing machine repair business and his pension income for 1997 are not subject to tax is frivolous and groundless. On the record before us, we hold that petitioner's net profit for each of the years at issue from his washing machine repair business is subject to tax. We further hold on that record that petitioner's pension*230 income for 1997 is subject to tax and that petitioner is liable for that year for the 10-percent additional tax under
We turn now to the addition to tax under
*231 With respect to petitioner's document for 1996, respondent's explanation as to why respondent did not file that document as petitioner's tax return for 1996 is that petitioner did not sign that document under penalties of perjury, as required by
With respect to the addition to tax under
Although respondent does not ask the Court to impose a penalty on petitioner under
In the*233 Court's March 10, 2003 Order, at the call of this case from the calendar on March 24, 2003, and at the call of this case on that date for trial, the Court reminded petitioner about
We have considered all of petitioner's statements, contentions, and arguments that are not discussed herein, and we find them to be without*234 merit and/or irrelevant.
To reflect the foregoing and the concessions of the parties,
Decision will be entered under
1. All section references are to the Internal Revenue Code in effect for the years at issue. All Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. Before trial, the parties filed a stipulation of settled issues setting forth their agreement as to the disposition of certain determinations in the notice of deficiency (notice) that respondent issued to petitioner for the years at issue. After trial, respondent conceded the determinations in the notice under
In addition to the issues remaining for decision listed below, there are other questions relating to certain determinations in the notice that are computational in that their resolution flows automatically from our resolution of the remaining issues that we address herein, from the parties' stipulation of settled issues, and from respondent's concession of the determinations under
3. At trial, the parties called no witnesses, and respondent introduced into the record certain exhibits.↩
4. Petitioner rounded his net profit for 1996 from his washing machine repair business to $ 30,201. According to the parties' stipulation of settled issues, the actual net profit for 1996 from that business is $ 30,200.31.↩
5. Petitioner rounded his net profit for 1997 from his washing machine repair business to $ 30,227. According to the parties' stipulation of settled issues, the actual net profit for 1997 from that business is $ 30,227.02.↩
6. Petitioner introduced no evidence and makes no argument about the 10-percent additional tax under
7. Petitioner argues that, regardless of whether and when he filed a tax return for 1997, the issue under
8. Petitioner struck from Form 1040 for 1996 that he used in preparing petitioner's document for 1996, inter alia, the declaration that appeared above the place where he signed that document.↩
9. On Apr. 17, 1997, respondent also received a payment of
10. The record also established that petitioner reported total tax of $ 11,477 in the tax return that he file for 1995.↩
Lorin G. Sloan v. Commissioner of Internal Revenue , 53 F.3d 799 ( 1995 )
United States v. David N. Moore , 627 F.2d 830 ( 1980 )
Welch v. Helvering , 54 S. Ct. 8 ( 1933 )
Cupp v. Commissioner , 65 T.C. 68 ( 1975 )
Sloan v. Commissioner , 102 T.C. 137 ( 1994 )