Gempel v. Commissioner

MEMORANDUM FINDINGS OF FACT AND OPINION

IRWIN, Judge: In a notice of deficiency mailed August 15, 1973, respondent determined deficiencies in petitioner's income tax*506 returns for 1966-1971, and additions to tax for those years under sections 6651(a), 6653(a), and 6654(a) ¹ as follows:

The parties have resolved the deficiencies by stipulations. Thus, the sole issue remaining for our consideration is whether petitioner's failure to file his income tax returns for the years in issue was due to reasonable cause or to willful neglect or intentional disregard of rules and regulations. ²

Petitioner also requests the privilege of filing joint returns for the year 1969, 1970 and 1971.

FINDINGS OF FACT

The facts in this case are not in dispute. Gordon L. Gempel (hereafter*507 petitioner) was a resident of Harbor Beach, Mich., at the time of filing his petition. Petitioner filed estimated tax returns for the years in issue and paid on the estimates as filed. However, petitioner did not file individual income tax returns for the taxable years 1966 to 1971, inclusive. Respondent, therefore, computed petitioner's tax using the married, filing separate status.

Petitioner is married and a self-employed businessman operating an insurance agency in Harbor Beach, Mich., under the name Gordon Gempel Insurance Agency. Petitioner refused to file his returns because of an administrative dispute with the Internal Revenue Service with respect to a prior year not in issue. It is unquestioned that petitioner acted in good faith and believed he was justified in not filing his returns in order to force the Internal Revenue Service to resolve the dispute which was due in large part to the Service's inattention to petitioner's request for assistance and to claims for refunds. Petitioner was continually in contact with the Service during the entire period, and at no time did he attempt to conceal the fact he did not file and at all times he made available his business*508 and personal records to the Service.

OPINION

Petitioner requests the privilege of filing joint returns for the years 1969, 1970, and 1971 on the grounds that the statute of limitations had not run on those years at the time of the audit in 1972. This issue was previously decided against petitioner by Court order dated December 4, 1975.

Section 6651(a) ³ imposes an addition to tax for failure to file unless such failure is due to reasonable cause and not due to willful neglect. The regulations provide little indication of what constitutes reasonable cause, stating simply that "if the taxpayer exercised ordinary care and prudence and was nevertheless unable to file the return within the proscribed time, then the delay is due to a reasonable cause. Sec. 301.6651-1(c)(1), Income Tax Regs. Petitioner, of course, has the burden of proof on this issue. Fischer v. Commissioner,50 T.C. 164 (1968).

*509 Petitioner withheld filing returns for the years 1966 through 1971 due to an administrative dispute with the Internal Revenue Service with respect to a prior year not before the Court. While we are sympathetic to petitioner, we stated in Glowinski v. Commissioner,25 T.C. 934 (1956), affd. per curiam 243 F. 2d 635 (D.C. Cir. 1957),

The fact that petitioner has a grievance with respondent over his tax liability for particular years is not a justifiable reason for failing to comply with the law requiring the filing of returns and declarations for entirely different years. * * *

The addition to tax must, therefore, stand.

Section 6653(a) ⁴ imposes an addition to tax whenever "any underpayment * * * is due to negligence or intentional disregard of rules and regulations." Petitioner's allegations and testimony show that he intended to disregard those rules and regulations which required him to pay Federal income taxes. Petitioner's good faith in not trying to avoid taxes does not negate that intent. See Muste v. Commissioner,35 T.C. 913, 919 (1961). Therefore, respondent's assertion of the additions to tax under section 6653(a) *510 is sustained for all years in issue.

Because of the concessions by both parties on other issues,

Decision will be entered under Rule 155.