Cochrane v. Commissioner

*435 MEMORANDUM OPINION

CHIECHI, JUDGE: Respondent determined the following deficiencies in, and additions to, petitioner's Federal income tax (tax):

                    Additions to Tax

                    ________________

                  Section     Section

   Year    Deficiency      6651(a)(1)  ¹   6654

   ____    __________      _________    _______

   1989     $ 1,724        $ 349       ---

   1990     37,975        9,494     $ 2,486

   1991      2,462         616       141

   1992     25,267        6,317      1,102

   1993       812         189       ---

The issues remaining for decision are:

(1) Have the respective periods of limitations under section 6501 expired with respect to petitioner's taxable years 1989, 1990, 1991, and 1992? *436 We hold they have not.

(2) Is petitioner liable for the addition to tax under section 6651(a)(1) for each of the years 1989, 1990, 1991, and 1992? We hold that she is.

(3) Is petitioner liable for the addition to tax under section 6654 for each of the years 1990, 1991, and 1992? We hold that she is to the extent stated herein.

Some of the facts have been stipulated and are so found.

Petitioner, who was single during the years at issue, resided in Phoenix, Arizona, at the time the petition was filed.

Petitioner requested, and received, extensions of time until August 15, 1990, and August 15, 1991, respectively, within which to file her 1989 and 1990 tax returns and included tax payments with those requests in the amounts of $ 390 and $ 1,128.25, respectively. The Internal Revenue Service (Service) has no record that petitioner filed her 1989 and 1990 tax returns on those respective dates or on any other dates. Nor does the Service have a record that petitioner filed tax returns for 1991, 1992, and 1993.

Tax was withheld in the amounts of $ 330 and $ 58 from the wages that petitioner received during 1989 and 1993, respectively. No tax was withheld from the $ 18 of wages that petitioner*437 received during each of the years 1990 and 1991. No tax was withheld for petitioner's taxable year 1992 because she received no wages during that taxable year.

On April 10, 1998, respondent sent petitioner a notice of deficiency (notice) with respect to her taxable years 1989, 1990, and 1991 and a separate notice with respect to her taxable years 1992 and 1993. In those notices, respondent determined, inter alia, that petitioner had failed to file tax returns for the years at issue, that she is liable for additions to tax under section 6651(a)(1) for those years, and that she is liable for additions to tax under section 6654 for her taxable years 1990, 1991, and 1992.

Petitioner bears the burden of showing error in the determinations in the notices. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115, 78 L. Ed. 212, 54 S. Ct. 8 (1933). We reject petitioner's argument that the standard of proof applicable in criminal proceedings is controlling in the instant case.

Before addressing each of the issues remaining for decision, we note that we have considered all of petitioner's contentions and arguments that are not discussed herein, and we find them to be baseless, without merit, *438 and/or irrelevant. Period of Limitations

Although not pled in the petition, petitioner argues that the respective periods of limitations under section 6501 with respect to her taxable years 1989 through 1992 have expired. ² That is because, according to petitioner, she timely filed her tax returns for those years, and the notices with respect to those years were not issued until April 10, 1998. We reject petitioner's contention.

*439 Except for petitioner's self-serving, uncorroborated, and conclusory testimony that she timely filed her tax returns for the years 1989 through 1992, the record is devoid of evidence supporting petitioner's position under section 6501. In fact, official records of the Service that are part of the record in this case show that petitioner did not file tax returns for any of the years 1989 through 1992. ³We are not required to, and we shall not, accept petitioner's testimony that she timely filed her tax returns for those years. See Geiger v. Commissioner, 440 F.2d 688, 689 (9th Cir. 1971), affg. per curiam T.C. Memo 1969-159; Tokarski v. Commissioner, 87 T.C. 74, 77 (1986).

On the record before us, we find that petitioner has failed to establish that she filed tax returns for the years 1989 *440 through 1992. Accordingly, we hold that the respective periods of limitations under section 6501 with respect to those years have not expired.

ADDITION TO TAX FOR FAILURE TO FILE

Section 6651(a)(1) imposes an addition to tax for failure to file a tax return on the date prescribed for filing. That addition to tax does not apply if it is shown that the failure to file was due to reasonable cause, and not due to willful neglect. See sec. 6651(a)(1).

Petitioner contends that she is not liable for the additions to tax under section 6651(a) for the years 1989 through 1992. ⁴

In support of her position, petitioner states, inter alia:

   Why did it take Respondent nine years to notify Petitioner that

   they did not have her returns on file the years 1989 through

   1993, if, in fact, they did not have the returns, unless

   Respondent, through laxity and clerical bungling, *441 lost track of

   Petitioner's returns; or else, deceitfully and intentionally,

   with malice aforethought, submerged Petitioner's returns and

   deferred contact with her, all the while tabulating penalties

   and interest that would have been far less significant had the

   "Total" lines been timely drawn? The Notice of Deficiency sent

   to Petitioner in January of 1998 clearly witnesses that the

   potential for stunning penalties and interest is increased

   proportionate to the delay in notification * * *.

           *   *   *   *   *   *   *

   If the IRS is allowed to collect monies for alleged "unfiled"

   returns from 10 years past, when taxpayers are only required to

   keep them for three, what's to stop them from seeking to collect

   for returns they claim to have no record of that date back 20

   years, or more? The taxpayer should have some means of

   protecting him -- or herself from the burden of filing proof

   when the date of notification exceeds the requirement date for

   keeping such return. If Respondent can't keep track of a taxpayer

   in this high-tech age, when everything about everyone is easily

*442    knowable and privacy rights are flagrantly violated by legions

   of both professional and personal snoops -- many of them

   employed by Respondent * * *, then Respondent deserves to lose

   any revenue that would accrue from its assessments, whether

   taxpayer has proof of filing or not. If Respondent deliberately

   defers contact with a taxpayer in order to subsequently collect

   greater penalties and interest, then this would constitute not

   only malicious intent, but fraud.

           *   *   *   *   *   *   *

     It is convenient -- and necessary, in the absence of

   proof -- for Respondent to assert that Petitioner did not

   file taxes for the years 1989 through 1993, though it

   is impossible to prove such assertion. In fact, would not dare

   willfully omit a filing, in view of the harassment visited upon

   her by Respondent in years when her returns did not bear the

   signature of a professional preparer. The provisions of Section

   6651 cannot even apply to Petitioner because Petitioner did,

   in fact, file her returns, and Respondent has offered

   no proof to the contrary, nor can it. If the burden*443 of proof

   rests with Petitioner, there is a standoff, and the case should

   be dismissed.

We find petitioner's contentions and arguments under section 6651(a)(1) to be baseless, without merit, and/or irrelevant. On the record before us, we find that petitioner has not shown that her failure to file tax returns for her taxable years 1989 through 1992 was due to reasonable cause, and not to willful neglect. Consequently, we sustain respondent's determinations that petitioner is liable for additions to tax under section 6651(a)(1) for those years.

ADDITION TO TAX FOR FAILURE TO PAY ESTIMATED TAX

Section 6654(a) imposes an addition to tax for failure to pay estimated tax. The addition to tax under section 6654(a) is mandatory unless the taxpayer establishes that one of the exceptions in section 6654(e) applies. See Grosshandler v. Commissioner, 75 T.C. 1, 20-21 (1980).

Petitioner contends that she is not liable for the additions to tax under section 6654(a) for the years 1990 through 1992. In support of that contention, petitioner argues:

   in 1990, Petitioner prepaid over 100% of the estimated

   taxes owed in 1989; thus, no further estimated*444 payments

   were required and no penalty was due therefor in 1990.

   In 1991, no tax was due; thus, no estimated tax payment

   was required in 1992.  No estimated taxes were required

   to be paid from 1989 through 1993. Exceptions to the

   underpayment penalty under section 6654(e)(2), apply for 1990

   and 1992.

  Section 6654(e) provides in pertinent part:

   (e) Exceptions. --

     (1) Where tax is small amount. -- No addition to tax

   shall be imposed under subsection (a) for any taxable

   year if the tax shown on the return for such taxable

   year (or, if no return is filed, the tax), reduced by

   the credit allowable under section 31, is less than

  $ 500.

     (2) Where no tax liability for preceding taxable

   year. -- No addition to tax shall be imposed under subsection

   (a) for any taxable year if --

        (A) the preceding taxable year was a taxable

     year of 12 months,

        (B) the individual did not have any liability

     for tax for the preceding taxable year, and

        (C) the individual was a citizen or resident

     of the United States throughout the preceding

*445      taxable year.

The parties made various concessions at trial as well as in the stipulation of facts and the supplemental stipulation of facts filed in this case. Consequently, computations under Rule 155 will be necessary. On the present record, we find that petitioner is liable for the additions to tax under section 6654(a) for 1990, 1991, and 1992 except to the extent that the Rule 155 computations in this case establish that the exception provided in either section 6654(e)(1) or section 6654(e)(2) applies for any such year.

To reflect the foregoing and the concessions of the parties,

Decision will be entered under Rule 155.