DocketNumber: Docket No. 23732-09
Citation Numbers: 104 T.C.M. 38, 2012 Tax Ct. Memo LEXIS 195, 2012 T.C. Memo. 192
Judges: PARIS
Filed Date: 7/12/2012
Status: Non-Precedential
Modified Date: 11/20/2020
Decision will be entered under
PARIS,
The parties submitted this case fully stipulated pursuant to
During 2007 Mrs. Kramer worked part time for Beall's Corp. (Beall's) and for the St. Johns County School District (school district). Beall's paid Mrs. Kramer $8,288 for the work she performed, and the school district paid her $10,393. In addition to withholding Social Security and Medicare taxes, Beall's and the school district withheld $168 and $392, respectively, in Federal income taxes.
Mr. Kramer also worked during 2007. He worked full time for Azalea Bioenergy Co. (Azalea), which paid him $7,500 for the work he performed and withheld Social Security and Medicare taxes and $840 in Federal income tax.
Petitioners timely filed a Federal income tax return for 2007. On their return petitioners reported $19 of interest income, $79 of dividend income, and $10,857 of passive income from Motherwell Corp., a subchapter S corporation. Petitioners reported zero wages, zero taxable income, and a zero tax liability.
Despite receiving information returns from their respective employers, petitioners attached to their return a self-prepared Form *197 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., for each employer. On the Forms 4852 petitioners reported withholdings for Federal income, Social Security, and Medicare taxes; however, they reported zero wages, tips, and other compensation.
Petitioners subsequently filed an amended Federal income tax return for the 2007 tax year in April 2009. On their amended return petitioners reported an additional $156 of dividend income and $2,192 of passive income. Again petitioners reported a zero tax liability.
In July 2009 respondent sent petitioners a notice of deficiency. Respondent determined that petitioners received, but failed to report, taxable wages of $7,500, $8,288, and $10,393, from Azalea, Beall's, and the school district, respectively. *198 As a result, respondent determined that petitioners were liable for a deficiency in Federal income tax, and, in his answer, alleged that petitioners were also liable for an accuracy-related penalty.
Generally, the taxpayer bears the burden of proving that the Commissioner's deficiency determinations are incorrect.
Petitioners claim that their tax returns are credible evidence that shifts the burden of proof to respondent under
Credible evidence is defined as "the quality of evidence which, after critical analysis, the court would find sufficient upon which to base a decision on the issue if no contrary evidence were submitted".
Indeed, petitioners' stipulation of facts renders
Similarly, petitioners assert that respondent has the burden of production under
Respondent determined that petitioners *201 are liable for a Federal income tax deficiency for failing to report wages received from their respective employers during 2007. Petitioners do not dispute that Azalea paid Mr. Kramer $7,500 for work he performed in 2007, and that Beall's and the school district paid Mrs. Kramer $8,288 and $10,393, respectively, for work she performed in 2007. Moreover, on brief, petitioners do not dispute that wages are income. Rather, they claim that "income" is not defined in the Code and the payments made to them are not "gross income".
Petitioners' assertion to the contrary, that is, the payments made to them are not gross income, is frivolous and characteristic of rhetoric that has been universally rejected by this and other courts.
Under
In his answer respondent asserted that an *203 accuracy-related penalty pursuant to
Under
Petitioners reported a zero tax liability on their original and amended tax returns for 2007. However, petitioners received taxable wage income from their respective employers in 2007 and, as discussed above, were liable for Federal income taxes on their wages. Petitioners therefore had an underpayment within the meaning of
Petitioners do not dispute that they worked during 2007 and that they received payments from their respective employers in the amounts set forth in the notice of deficiency. In fact, petitioners acknowledge that they received information statements from their employers reporting these payments, but, instead of relying on these statements, they attached to their return Forms 4852 that reported zero wages.
As discussed above, it is well settled that wages are taxable income and should be reported *205 as such.
The Court has considered the parties' arguments and, to the extent not addressed herein, concludes that they are moot, irrelevant, or without merit.
To reflect the foregoing,
1. Unless otherwise indicated, section references are to the Internal Revenue Code (Code) in effect for 2007, and Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. After issuing the notice of deficiency, respondent conceded $183 of retirement income proposed in the notice. Petitioners conceded an additional $156 of taxable dividends and $2,192 of passive income by reporting these amounts in an amended return.↩
3. In the notice of deficiency respondent determined that petitioners also received an additional $156 of taxable dividends, $2,192 of passive income, and $183 of retirement income. As stated above, respondent conceded the latter, and petitioners, by reporting the additional dividends and passive income on their amended return, conceded the former.
4. In an attempt to avoid these stipulations petitioners now assert that they have "consistently disputed receiving unreported income".
Estate of Quick v. Commissioner , 110 T.C. 172 ( 1998 )
Neil C. Hyslep v. United States , 765 F.2d 1083 ( 1985 )
Glenn Crain v. Commissioner of Internal Revenue , 737 F.2d 1417 ( 1984 )
Robert P. Wilcox v. Commissioner of Internal Revenue , 848 F.2d 1007 ( 1988 )
Welch v. Helvering , 54 S. Ct. 8 ( 1933 )
Roberts v. Commissioner , 62 T.C. 834 ( 1974 )
Wnuck v. Commissioner , 136 T.C. 498 ( 2011 )
Thomas M. Ferrill, Jr. And Louise B. Ferrill v. ... , 684 F.2d 261 ( 1982 )