The opinion
T.C. Memo. 1996-545
UNITED STATES TAX COURT
CRESTON SWAIM, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 20684-94. Filed December 17, 1996.
Creston Swaim, pro se.
Michael D. Zima, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
DEAN, Special Trial Judge: This case was assigned pursuant
to the provisions of section 7443A(b)(3) and Rules 180, 181, and
182.1
Respondent determined a deficiency in petitioner's 1992
Federal income tax in the amount of $2,850 and additions to tax
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year at issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure. Dollar amounts are rounded to the nearest dollar.
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under section 6651(a) in the amount of $674 and under section
6654(a) in the amount of $91.
The issues for decision are: (1) Whether certain payments
received by petitioner during 1992 are includable in his gross
income; (2) whether petitioner is liable for additional tax on
early retirement distributions under section 72(t); and (3)
whether petitioner is liable for additions to tax under sections
6651 and 6654.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the exhibits received into evidence
are incorporated herein by reference. Petitioner resided in
Altamonte Springs, Florida, at the time he filed his petition.
FINDINGS OF FACT
For the 1990 and 1991 tax years, petitioner filed Forms 1040
which he signed without altering the jurat. For the 1992 tax
year, however, petitioner filed a Form 1040NR (U.S. Nonresident
Alien Income Tax Return) dated June 15, 1993, which was received
by respondent on June 22, 1993. On this return petitioner
reported that he was a citizen of the country of "Florida,
America". Petitioner claimed "other single nonresident alien"
filing status. After reported estimated tax payments, Federal
income tax withheld, and excess Social Security tax withheld,
petitioner claimed a tax refund of $9,707. The only income
petitioner reported was $7,537 of unemployment compensation.
Petitioner altered the jurat on the 1040NR form by adding the
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phrase "With express reservation of all my rights in law, equity
and all natures of law". Respondent considered this return to be
frivolous, and it was not processed.
Respondent issued a notice of deficiency to petitioner based on
information returns received from several payors indicating
payments to petitioner during 1992 as follows:
Type of
Payor Payment Amount
Office Equipment Exchange Wages $1,586
Florida Department of Labor Unemployment 5,962
& Employment Security Compensation
Nationsbank of Texas IRA Distribution 8,408
Kemper Clearing Corp. IRA Distribution 1,000
A.G. Edwards & Sons Dividends 2
A.G. Edwards & Sons Stock Sale Proceeds 1,466
A.G. Edwards & Sons Stock Sale Proceeds 198
UCF Federal Credit Union Interest 22
Respondent determined petitioner's tax under section 1(c)
for unmarried individuals. The deficiency in income tax includes
the 10-percent additional tax imposed by section 72(t) on early
distributions from qualified retirement plans. Respondent also
determined that petitioner was liable for additions to tax under
section 6651(a)(1) for failure to file a timely return and under
section 6654(a) for failure to make estimated tax payments.
OPINION
Respondent's determinations are presumed correct, and
petitioner bears the burden of proving otherwise. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933).
1. Gross Income
Section 61(a) defines gross income as "all income from
whatever source derived". The burden is on petitioner to
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demonstrate that the payment in question falls into a specific
statutory exclusion. Commissioner v. Glenshaw Glass Co., 348
U.S. 426, 429-431 (1955).
Petitioner concedes that he received the payments in
question in the amounts determined by respondent.2 Petitioner
does not contend that any of the payments fall into a specific
statutory exclusion. Consequently, we sustain respondent's
determination that the amounts in question are includable in
petitioner's gross income.
2. Section 72(t) Additional Tax
Section 72(t)(1) imposes an additional tax equal to 10
percent of the portion of an early distribution from a "qualified
retirement plan" that is includable in the taxpayer's gross
income. An individual retirement account (IRA) is included in
the definition of a "qualified retirement plan". Secs. 72(t)(1),
4974(c)(4).
Section 72(t)(2) provides for certain exceptions to the
general rule contained in paragraph (1). One important exception
provides that the 10-percent additional tax does not apply if the
distribution was made on or after the date that the taxpayer
attained age 59 1/2. Sec. 72(t)(2)(A)(i).
2
In the stipulation of facts, petitioner concedes that he
received the payments in question, but some of the amounts
stipulated are slightly greater (by less than one dollar) than
the amounts determined in the notice of deficiency. To the
extent the amounts in the stipulation of facts exceed the amounts
in the notice of deficiency, we deem respondent to have conceded
the excess.
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There is no dispute that petitioner received IRA
distributions in 1992 in the amount of $9,408, or that that
amount was includable in petitioner's gross income. Petitioner
was born on August 10, 1958, and clearly had not attained the age
of 59 1/2 at the time of the distributions. Petitioner does not
claim to fall within any of the other statutory exceptions found
in section 72(t)(2). Consequently, we hold that petitioner is
liable for the 10-percent additional tax pursuant to section
72(t) as determined by respondent.
3. Section 6651(a)(1) Failure To File a Timely Return
Section 6651(a)(1) provides for an addition to tax of 5
percent of the tax required to be shown on the return for each
month or fraction thereof for which there is a failure to file,
not to exceed 25 percent. The addition to tax for failure to
file a timely return will be imposed if a return is not timely
filed unless the taxpayer shows that the delay was due to
reasonable cause and not willful neglect. Sec. 6651(a)(1).
Petitioner's 1992 Federal income tax return was due on
April 15, 1993. Sec. 6072(a). Respondent received petitioner's
Form 1040NR (which is dated June 15, 1993) on June 22, 1993.
However, petitioner introduced no evidence or testimony to
establish, contrary to respondent's determination, that such
document constitutes a "return" for purposes of section
6651(a)(1). See Beard v. Commissioner, 82 T.C. 766, 777 (1984),
affd. per curiam 793 F.2d 139 (6th Cir. 1986). For example,
there is no evidence here to show that there was "an honest and
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reasonable attempt to satisfy the requirements of the tax law".
Id. Accordingly, we find that petitioner's purported return does
not constitute a return for purposes of section 6651. Petitioner
offered no evidence to show that his failure to file a timely
return was due to reasonable cause and not willful neglect, and
we therefore sustain respondent's imposition of the addition to
tax under section 6651(a)(1).
4. Section 6654 Failure To Pay Estimated Tax
Where payments of tax, either through withholding or by
making estimated quarterly tax payments during the course of the
year, do not equal the amount required under the statute,
imposition of the addition to tax under section 6654 is
automatic, unless the taxpayer shows that one of the statutory
exceptions applies. Niedringhaus v. Commissioner, 99 T.C. 202,
222 (1992); Grosshandler v. Commissioner, 75 T.C. 1, 20-21
(1980). Petitioner bears the burden to show qualification for
such exception. Habersham-Bey v. Commissioner, 78 T.C. 304, 319-
320 (1982). Petitioner has not sustained his burden; therefore,
we hold that he is liable for the addition to tax under section
6654 for the 1992 taxable year.
To reflect the foregoing,
Decision will be entered
for respondent.