DocketNumber: Tax Ct. Dkt. No. 21823-96
Citation Numbers: 1998 T.C. Memo. 28, 75 T.C.M. 1624, 1998 Tax Ct. Memo LEXIS 27
Judges: CHABOT
Filed Date: 1/22/1998
Status: Non-Precedential
Modified Date: 4/18/2021
*27 An appropriate order granting respondent's motion for judgment on the pleadings will be issued; decision will be entered for respondent.
Respondent moved under
HELD: Respondent's motion for judgment on the pleadings is granted; decision will be entered for respondent as to all the deficiencies and additions to tax determined in the notices of deficiency.
MEMORANDUM OPINION
CHABOT, JUDGE: This matter is before us on respondent's motion for judgment on the pleadings under
Additions to Tax | ||||
Year | Deficiency | Sec. 6651(f) | Sec. 6654 | Sec. 6663 |
1989 | $ 21,344 | $ 15,474 | $ 112 | |
1990 | 11,065 | $ 8,299 | ||
1991 | 6,882 | 5,162 | ||
1992 | 11,934 | 8,652 | 336 | |
1993 | 11,597 | n18,408 | 486 | |
1994 | 14,183 | 6,170 | 662 |
*29 FOOTNOTE TO TABLE
END OF FOOTNOTE TO TABLE
*30 The issues for decision are (1) whether there are any genuine issues as to material facts and, if there are no such issues, then (2) whether respondent is entitled to judgment as a matter of law on the deficiencies and additions to tax.
BACKGROUND -- PROCEDURE
Petitioner invoked this Court's jurisdiction by filing a timely petition from the two notices of deficiency that embodied respondent's determinations described supra. Respondent filed an answer to the petition, including specific allegations with regard to the fraud determinations. Petitioner did not file a reply to this answer. Respondent filed a motion pursuant to
On May 20, 1997, the Court served the parties with notice of trial in St. Louis, Mo., the location designated by petitioner. On August 22, 1997, respondent filed the instant motion for judgment on the pleadings. After several unsuccessful informal attempts to contact petitioner to arrange for a telephone conference to discuss the instant motion, 3 the Court struck the case from the October 27, 1997, St. Louis trial session and established a briefing schedule on the instant motion. Petitioner has not filed any brief or otherwise responded to the instant motion.
Our findings are based entirely on those matters that are admitted or deemed admitted in the pleadings.
*32 BACKGROUND -- FACTS
When the petition was filed in the instant case, petitioner resided in Belleville, Illinois.
During each of the years 1989, 1990, 1991, 1992, 1993, and 1994, petitioner was engaged in the business of publishing a magazine entitled "Southern Illinois Prep Sports" (hereinafter sometimes referred to as SIPS), featuring local high school athletes. Petitioner conducted this business as a sole proprietorship doing business as "Southern Illinois Prep Sports". In each of the years 1990, 1991, 1992, 1993, and 1994, petitioner published two editions of SIPS: a football issue in the fall and a basketball issue in the winter. In 1989, he published three editions -- fall, winter, and spring.
During the period 1989, through 1994, petitioner sold advertising in SIPS to local businesses at the following rates: $55 for a business card-sized advertisement; $85 for one-sixth page; $120 for one-quarter page; $200 for one-half page; and $360 for a full page.
During 1990 and 1991, petitioner derived revenue in the amounts of $50,710 and $44,125, respectively, from selling advertising in SIPS. Of the amounts so derived, $25,140 and $20,895*33 were not reported on petitioner's income tax returns for 1990 and 1991, respectively. Petitioner understated his taxable income on his tax returns for 1990 and 1991 in the amounts of $30,385 and $26,670, respectively. Petitioner understated his income tax liabilities on his tax returns for 1990 and 1991 in the amounts of $11,065 and $6,882, respectively.
Petitioner did not file income tax returns for 1989, 1992, 1993, and 1994. During 1989, 1992, 1993, and 1994, petitioner derived revenue in the amounts of $77,175, $52,485, $53,575, and $59,780, respectively, from selling advertising in SIPS. Petitioner failed to report taxable income for 1989, 1992, 1993, and 1994, in the amounts of $57,505, $31,885, $30,477, and $36,551, respectively. As a result of not filing income tax returns for 1989, 1992, 1993, and 1994, petitioner understated his income tax liabilities for those years in the amounts of $21,344, $11,934, $11,597, and $14,183, respectively.
Petitioner failed to produce any records or other information with respect to these sales of advertising, to respondent in connection with the examination of*34 his tax returns for 1990 and 1991, and in connection with the examination of petitioner's 1989, 1992, 1993, and 1994 income tax liabilities.
DISCUSSION
(1) JUDGMENT ON THE PLEADINGS
A motion for judgment on the pleadings will be granted only if the pleadings do not raise a genuine issue as to a material fact and the moving party is entitled to a judgment as a matter of law.
(2) GENUINE ISSUE AS TO MATERIAL FACT
In the instant case, there are no genuine issues as to the material facts found supra, under Background -- Facts, these matters having been deemed admitted by order of the Court.
Petitioner is deemed to have admitted that he understated his tax liabilities by specified amounts for each of the 6 years in issue. This "bottom line" admission eliminates any need to consider matters which might otherwise affect tax liability, such as deductions, credits, or tax filing status.
Because petitioner has failed to plead that any addition to tax should*35 be reduced on account of prepayment credits, or that any fraud addition to tax should be reduced on account of some part of the underpayment's not being due to fraud, or that any addition to tax should be reduced on account of any matter other than the amount of the underpayment, there are no genuine issues as to material facts affecting the amounts of any additions to tax.
(3) JUDGMENT AS A MATTER OF LAW
Respondent is entitled to judgment as a matter of law with respect to the deficiencies and the additions to tax under
As to the fraud additions to tax, in order to carry the burden of proof for a year, respondent must prove two elements, as follows: (1) That petitioner has an underpayment of tax for that year, and (2) that some part of that underpayment is due to fraud.
For this purpose, respondent need not prove the precise amount of the underpayment resulting from fraud, but only that there is some underpayment and that some part of it is attributable to fraud. E.g.,
Where fraud is determined for each of several years, respondent's burden applies separately for each of the years.
The issue of fraud poses a factual question that is to be decided on an examination of all the evidence in the record.
In order to establish fraud*38 as to petitioner, respondent must show that petitioner intended to evade taxes, which he knew or believed were owed, by conduct intended to conceal, mislead, or otherwise prevent the collection of taxes. E.g.,
Respondent has proven by clear and convincing evidence that there was an underpayment of tax for each of the years in issue.
Respondent has proven by clear and convincing evidence that for 6 consecutive years petitioner received advertising revenue in amounts ranging from $44,125 to $77,175 per year, and averaging more than $56,000 per year. For 4 of these years petitioner omitted all of these receipts, for the other 2 years petitioner omitted about half of these receipts. For these 6 years petitioner omitted taxable income in amounts ranging from $26,670 to $57,505 per year, and averaging more than $35,000 per year. This pattern of consistent underreporting of income is strong evidence of fraudulent omissions of income, which resulted in underpayments of tax for each of the 6 years in issue.
When the foregoing is combined with petitioner's failure to produce to respondent any records or other information with respect to sales of advertising, in connection with respondent's examination of petitioner's income tax liabilities for the 6 years in issue, we conclude that respondent has proven by*40 clear and convincing evidence that a part or all of the underpayment for each of the years in issue is due to petitioner's fraud.
Petitioner has not alleged in the pleadings that any part of the deficiency for any of the years in issue is not due to fraud.
We hold that respondent's motion for judgment on the pleadings should be granted as to both the determined deficiencies and the additions to tax under
An appropriate order granting respondent's motion for judgment on the pleadings will be issued; decision will be entered for respondent.
1. Unless indicated otherwise, all Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. Unless indicated otherwise, all section references are to sections of the Internal Revenue Code of 1986 as in effect for the years in issue.↩
3. At some point after the notice of trial was served and before respondent filed the instant motion for judgment on the pleadings, petitioner apparently moved from the address listed in the petition. Petitioner has not communicated with the Court, formally or informally, since then.↩
Richard D. Bokum, Ii, Margaret B. Bokum v. Commissioner of ... , 992 F.2d 1132 ( 1993 )
Joseph R. Dileo, Mary A. Dileo, Walter E. Mycek, Jr., ... , 959 F.2d 16 ( 1992 )
B. B. Carter and Mrs. Tommie v. Carter v. Ellis Campbell, ... , 264 F.2d 930 ( 1959 )
Kenneth Poy Lee and Chow Joy Lee v. United States , 466 F.2d 11 ( 1972 )
Lazarus I. Levine and Norman L. Marks, Executors of the ... , 250 F.2d 798 ( 1958 )
estate-of-josephine-mazzoni-deceased-peter-mazzoni-and-peter-mazzoni-v , 451 F.2d 197 ( 1971 )
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Boyett Et Ux. v. Commissioner of Internal Revenue , 204 F.2d 205 ( 1953 )
Charles Oran Mensik and Mary Mensik v. Commissioner of ... , 328 F.2d 147 ( 1964 )
Abe B. And Leona M. Adler v. Commissioner of Internal ... , 422 F.2d 63 ( 1970 )
Robert W. Bradford v. Commissioner of Internal Revenue , 796 F.2d 303 ( 1986 )
George C. McGee v. Commissioner of Internal Revenue , 519 F.2d 1121 ( 1975 )
Bolen Webb and Cornelia Webb v. Commissioner of Internal ... , 394 F.2d 366 ( 1968 )
William J. Drieborg and Laura D. Drieborg v. Commissioner ... , 225 F.2d 216 ( 1955 )
Grace M. Powell, of the Estate of O. E. Powell, Deceased v. ... , 252 F.2d 56 ( 1958 )
Danenberg v. Commissioner , 73 T.C. 370 ( 1979 )
Gajewski v. Commissioner , 67 T.C. 181 ( 1976 )
Petzoldt v. Commissioner , 92 T.C. 661 ( 1989 )