Cahan v. Commissioner

MEMORANDUM OPINION

WELLS, Judge ^*: Respondent determined deficiencies in petitioners' *51 Federal income tax and additions to tax for calandar years 1976 and 1977 as follows:

Respondent's answer alleged in the alternative that if petitioner Norman Cahan was not liable for additions to tax for fraud under section 6653(b), then he was liable for additions to tax under section 6651(a)(1) and under section 6653(a) for the years 1976 and 1977.

The sole issue that the Court must decide is whether respondent's assessment and collection of the additions to tax pursuant to sections 6651(a)(1) and 6653(a), first asserted in his answer, are barred by the statute of limitations. ²

*52 All of the facts have been stipulated and are so found. Petitioners resided in Huntingdon Valley, Pennsylvania, on the date the petition was filed. Petitioners filed delinquent tax returns for 1976 and 1977. Respondent's notice of deficiency determined the addition to tax pursuant to section 6653(b) against petitioner Norman Cahan. Petitioners timely filed their petition and respondent timely filed his answer thereto. In his answer, respondent plead the addition to tax pursuant to section 6653(b) and plead, in the alternative, the additions to tax pursuant to sections 6651(a)(1) and 6653(a). Petitioners concede the deficiencies in income taxes for both years as set forth in the statutory notice of deficiency. Respondent concedes that petitioner Norman Cahan is not liable for the addition for fraud pursuant to section 6653(b). Petitioner Norman Cahan concedes that he is liable for the additions to tax for failure to file pursuant to section 6651(a)(1) and negligence pursuant to section 6653(a), if these additions are not barred by the statute of limitations.

Petitioners suggest that the timely mailing of a notice of deficiency for a taxable year suspends the statute of limitations*53 only with respect to such items contained in the notice. Petitioners contend that since respondent did not raise the additions to tax for failure to file and negligence until he filed his answer that the statute continued to run with respect to such additions. Petitioners' claim is without merit. While, under Rule 142, the burden of proof is on respondent with respect to the failure to file and negligence additions, petitioners have admitted liability for the additions, if they are not barred. It is undisputed that the notice of deficiency was mailed within the three year limitations period under section 6501(a). The mailing of the notice tolls the statute of limitations. See section 6213(a). Respondent may, at the trial, assert a claim for an addition to tax for the year at issue, even though at such time the statute of limitations would bar the assessment were the running of the limitations period not suspended. Section 6214(a); , affg. a Memorandum Opinion of this Court; ; .*54 ³

Therefore, the additions to tax for failure to file pursuant to section 6651(a)(1) and for negligence pursuant to section 6653(a) as claimed by respondent in his answer are sustained.

Decision will be entered under Rule 155.