FURNISS v. COMMISSIONER

MEMORANDUM OPINION

MARVEL, JUDGE: In separate notices of deficiency, respondent determined the following income tax deficiencies and penalties with respect to petitioner's Federal income taxes: ¹

               Addition to tax   Addition to tax

Taxable Year   Deficiency   Sec. 6651(a)(1)    Sec. 6654

____________   __________   _______________   _______________

   1990     $ 5,917      $ 1,479       $ 387

   1994      4,425        939        191

   1996      4,093       1,023        218

*166 After concessions, ² the only remaining issues for decision are: ³ (1) Whether petitioner received unreported income during 1990, 1994, and 1996 of $ 25,838, $ 30,243, and $ 29,812, respectively; (2) whether petitioner is liable for additions to tax for failure to file Federal income tax returns for 1990, 1994, and 1996; and (3) whether petitioner is liable for additions to tax for failure to make sufficient estimated tax payments in 1990, 1994, and 1996.

Some of the facts have been stipulated, and the stipulations are incorporated herein by this reference. Petitioner resided in Lawton, Oklahoma, at the time the petition was filed.

During 1990, *167 petitioner received commissions of $ 17,516, a pension of $ 3,433, unemployment compensation of $ 4,065, dividends of $ 20, and wages of $ 804. During 1994, petitioner received unemployment compensation of $ 2,450, dividends of $ 46, and wages of $ 27,747. During 1996, petitioner received a pension of $ 5,920, unemployment compensation of $ 3,705, interest of $ 20, dividends of $ 36, and wages of $ 20,131. Petitioner did not file income tax returns for 1990, 1994, or 1996.

Respondent determined that all of petitioner's receipts during the years in issue were income to petitioner. Petitioner does not dispute that he received the income; rather, he contends there is insufficient authority to hold him liable for an income tax.

The crux of petitioner's argument is found in his trial memorandum and supplement to trial memorandum. ⁴ These trial memoranda are merely lists of disjointed brief quotations and erroneous statements of law. Giving petitioner the benefit of the doubt, we construe petitioner's argument to be that the income tax is unconstitutional and, alternatively, that the definition of income excludes his receipts. We reject petitioner's argument for*168 well- established reasons. First, the income tax repeatedly has been held constitutional. See Charczuk v. Commissioner, 771 F.2d 471, 472-473 (10th Cir. 1985), affg. T.C. Memo. 1983-433; Abrams v. Commissioner, 82 T.C. 403, 406-407 (1984); Bivolcic v. Commissioner, T.C. Memo. 2000-62; see also Stelly v. Commissioner, 761 F.2d 1113, 1115 (5th Cir. 1985) (listing cases in each circuit holding the income tax constitutional). Second, section 61(a) defines gross income generally as "all income from whatever source derived," including, but not limited to, compensation for services, commissions, interest, dividends, and pensions. See sec. 61(a)(1), (4), (7), (11). Section 85(a) provides: "In the case of an individual, gross income includes unemployment compensation." Under section 61(a)(1), (4), (7), and (11), and section 85(a), petitioner clearly is required to include in gross income all his receipts in the years in issue.

*169 Petitioner contends that income is defined only by section 911 and the regulations under section 861 and that his receipts are excluded from those definitions. Neither section 911 nor section 861 operates to prevent section 61 from applying to petitioner's receipts. See Solomon v. Commissioner, T.C. Memo. 1993-509, affd. without published opinion 42 F.3d 1391 (7th Cir. 1994).

Petitioner's reliance on section 911 is misplaced. Section 911(a) allows an exclusion from gross income for foreign earned income at the election of a qualified individual, defined as an individual whose tax home is in a foreign country. See sec. 911(d)(1). Petitioner had no foreign earned income and is not a qualified individual for purposes of section 911(a). Section 911(a) has no bearing on the taxation of petitioner's receipts.

Petitioner's reliance on section 861 likewise is misplaced. Petitioner reads section 861 to provide that items not defined therein are not subject to tax. Section 861(a)(1) and (3) provides that interest from the United States and compensation for labor or personal services performed in the United States (with exceptions not applicable here) are items of*170 gross income which shall be treated as income from sources within the United States. Nothing in section 861 operates to exclude from income any of petitioner's receipts.

We hold that petitioner received unreported income of $ 25,838, $ 30,243, and $ 29,812 during 1990, 1994, and 1996, respectively.

Petitioner asserted that he was entitled to Schedule A, Itemized Deductions, and Schedule C, Profit or Loss From Business, deductions for the years in issue. ⁵ Petitioner has the burden of proof on this issue. See Rule 142(a). We allowed petitioner ample time to present evidence establishing these deductions. Petitioner failed to introduce any such evidence or even indicate the specific deductions to which he believed he was entitled. We hold that petitioner failed to carry his burden of proof. See INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84, 117 L. Ed. 2d 226, 112 S. Ct. 1039 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440, 78 L. Ed. 1348, 54 S. Ct. 788 (1934); Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513 (10th Cir. 1947). Petitioner is not entitled to any Schedules A or C deductions for the years in issue. *171

Section 6651(a)(1) authorizes the imposition of an addition to tax for failure to file a timely return, unless it is shown that such failure is due to reasonable cause and not due to willful neglect. See sec. 6651(a)(1); United States v. Boyle, 469 U.S. 241, 245, 83 L. Ed. 2d 622, 105 S. Ct. 687 (1985); United States v. Nordbrock, 38 F.3d 440, 444 (9th Cir. 1994); Harris v. Commissioner, T.C. Memo. 1998-332.

Petitioner did not file Federal income tax returns or applications for extensions of time to file for 1990, 1994, or 1996. Petitioner stated in his petition that he was not liable for penalties as determined by respondent. The record is devoid of*172 any evidence establishing a reasonable cause for his failure to file a return; thus, we hold petitioner is liable for the section 6651(a)(1) addition to tax.

Section 6654(a) imposes an addition to tax in the case of any underpayment of estimated tax by an individual. Unless a statutory exception applies, the addition to tax under section 6654(a) is mandatory. See sec. 6654(a), (e); Recklitis v. Commissioner, 91 T.C. 874, 913 (1988); Grosshandler v. Commissioner, 75 T.C. 1, 20-21 (1980); Estate of Ruben v. Commissioner, 33 T.C. 1071, 1072 (1960) ("This section has no provision relating to reasonable cause and lack of willful neglect. It is mandatory and extenuating circumstances are irrelevant."). None of the statutory exceptions under section 6654(e) applies in this case. Petitioner stated in his petition that he was not liable for penalties as determined by respondent, but presented no further argument regarding payments of estimated tax. We thus hold petitioner liable for the section 6654(a) addition to tax.

We have carefully considered all remaining arguments made by petitioner for contrary*173 holdings and, to the extent not discussed, find them to be irrelevant or without merit.

To reflect the foregoing,

Decision will be entered for respondent.