DocketNumber： No. 13109-02S
Citation Numbers： 2004 T.C. Summary Opinion 31, 2004 Tax Ct. Summary LEXIS 33
Judges： "Couvillion, D. Irvin"
Filed Date： 3/16/2004
Status： Non-Precedential
Modified Date： 11/21/2020
2004 Tax Ct. Summary LEXIS 33">*33 PURSUANT TO INTERNAL REVENUE CODE SECTION 7463(b), THIS OPINION MAY NOT BE TREATED AS PRECEDENT FOR ANY OTHER CASE.
COUVILLION, Special Trial Judge: This case was heard pursuant to
ARL sent Mr. Hall weekly settlement statements. Each statement consisted of a "permanent check voucher" and a "settlement voucher," which listed the income Mr. Hall had earned on his trips for ARL, as well as any deductible charges he had incurred during that week. The charges included rent due on the trailer and other expenses advanced by ARL, such as truck tags needed to cross into various States, taxes, and expenses with respect to use of the leased trailer. Mr. Hall was obligated to repay such expenses. Each item of income and expense was enumerated. In the audit of their return by respondent, petitioners provided roughly two-thirds of the weekly statements for the year at issue. These statements were produced at trial. Other statements were either misplaced or lost.
On the lower portion of each weekly settlement statement were figures entitled, "YTD Amount" and "YTD 1099". These figures suggested a running total, as they tended to increase with each later statement. However, some statements contained the2004 Tax Ct. Summary LEXIS 33">*36 designation, "N/A," in the "YTD Amount" or "YTD 1099" column. The last statement for the year, dated December 21, 2000, showed a "YTD Amount" of $ 54,197.69 and a "YTD 1099" of $ 43,983.72.
During the course of the year, Mr. Hall noticed that his statements had inaccuracies. Specifically, he did not understand the instances when "N/A" appeared in the "YTD Amount" or "YTD 1099" column. Both he and Mrs. Hall attempted to contact ARL on several occasions for explanations; however, they were unsuccessful. Mr. Hall described these efforts to the Court:
During the course of the year, I had the pleasure to call ARL
constantly and question them about the figures on the bottom of
the settlement. The woman said okay, we'll try to get it
straight. We'll straighten it out.
* * * * * * *
I couldn't make heads or tails just looking at their paperwork
that they * * * [were] giving me a true figure because I had
inquired to these people over and over that my statements didn't
look right. The figures wouldn't match.
I was asking them for help to figure out their own2004 Tax Ct. Summary LEXIS 33">*37 paperwork,
and the woman there told me that she would try to figure it out.
Don't worry about it. It will be corrected. Just keep on
trucking. I was being honest with them, and I was hoping that
they were being honest with me.
* * * * * * *
When the figures did show up, I thought it was corrected. I took
it at face value that the figures were correct.
Petitioners eventually lost faith in ARL. Mr. Hall left the company in December 2000 to pursue more local trucking work with a different company.
Petitioners filed their 2000 Federal income tax return timely. On Schedule C, they reported $ 47,773 in gross receipts or sales from Mr. Hall's activity as a truck driver. This amount represented the $ 43,983.72 in the "YTD 1099" column on the December 21, 2000, settlement statement from ARL, plus payments received from two other companies, Gilco Properties and RB&B Trucking.
On Form 1099-MISC, Miscellaneous Income, ARL reported the amount it had paid to Mr. Hall in 2000 to the Internal Revenue Service. The parties stipulated that the information return issued by ARL reflected that ARL paid2004 Tax Ct. Summary LEXIS 33">*38 $ 95,455 to Mr. Hall during the year in question.
The Court concludes that respondent has met the burden of producing reasonable and probative information with respect to the deficiency. In the audit of petitioners' return, respondent's revenue agent, Elizabeth Isgett, obtained from ARL a summary of the checks issued to Mr. Hall in 2000 (check summary). The check summary was a complete record of ARL's payments and deductions with respect to Mr. Hall for the year at issue. It contained a column labeled "1099 Amount". Ms. Isgett determined that the income and expense items on the check summary, when combined, produced the net figure of $ 95,455 reported to the Internal Revenue Service by ARL.4 This information was reasonable, 2004 Tax Ct. Summary LEXIS 33">*40 probative, and supportive of the allegation of additional income. Respondent satisfies the requirements of
Although respondent bore the burden of proof with respect to the issue of unreported income, nonetheless, the ultimate burden of persuasion, or risk of nonpersuasion, remains on petitioners.
Gross income includes all income from whatever source derived.
Reviewed and adopted as the report of the Small Tax Case Division.
Decision will be entered under Rule 155.
1. Unless otherwise indicated, subsequent section references are to the Internal Revenue Code in effect for the year at issue. Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. Petitioners conceded the sec. 72(t) tax due on an early withdrawal from an Individual Retirement Account (IRA). Respondent conceded the accuracy-related penalty and $ 10,983 in additional allowable Schedule C expenses. Other adjustments are computational in nature.↩
3. In later correspondence with respondent, ARL indicated that the Form 1099 had understated the amount paid to Mr. Hall by $ 1,349. However, respondent has not sought an increased deficiency.↩