UNITED STATES TAX COURT

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T.C. Memo. 2012-323

UNITED STATES TAX COURT

SANDY GOOD, Petitioner y.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 13413-10.

Filed November 20, 2012.

Sandy Good, pro se.

Horace Crump, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

MARVEL, Judge: Respondent determined deficiencies in petitioner's

Federal income tax and additions to tax under sections 6651(a)(2) and (f) and

6654(a)1 as follows:

IUnless otherwise indicated, section references are to the Internal Revenue

(continued...)

OERVED ÅÛE 2 0 2012

-2[*2]

Year

Deficiency

2002

2003

2004

2005

2006

$15,889

16,403

64,969

44,044

12,705

Sec. 6651(a)(2)

Addifions to tax

Sec. 6651(f)1

Sec. 6654(a)

$3,972

4,101

16,242

To be determined2

$11,520

11,892

47,103

s l,932

9,211

$531

423

1,862

1,767

601

iAlternatively, respondent determined that petitioner is liable for additions

to tax under sec. 6651(a)(1) if we conclude that he is not liable for the additions to

tax under sec. 6651(f).

2The sec. 6651(a)(2) addition to tax is 0.5% of the amount of tax shown on

the return, with an additional 0.5% per month during wlÏich the failure to pay

continues, up to a maximum of 25%. In the notice of deficiency respondent did

not calculate the amounts of the sec. 6651(a)(2) additions to tax for 2005-06

because the period necessary to support the assertion of the maximum penalty

amount under sec. 6651(a)(2) had not yet been attained.

The issues for decision are: (1) whether and if so to wh t extent petitioner had

unreported income for the years in issue; (2) whether petitioner is liable for selfemployment tax under section 1401 for the years in issue; (3) whether petitioner

was required to file Federal income tax returns for the years in issue; (4) whether

petitioner is liable for additions to tax under section 6651(f) for fraudulent failure

to file Federal income tax returns for the years in issue; (5) whether petitioner is

liable for additions to tax under sections 6651(a)(2) and 6654(a) for the years in

1(...continued)

Code (Code) in effect for the years in issue, and Rule references are to the Tax

Court Rules of Practice and Procedure. Some monetary amounts have been

rounded to the nearest dollar.

1 under section 6673(a)(1).

[*3] issue; and (6) whether we should impose a pena ty

Because petitioner maintains that as a minister of God he had no income, we will

first address whether petitioner operated a church and whether he was a minister.

FINDINGS OF FACT

Some of the facts have been deemed established for purposes of this case m

accordance with Rule 91(f).2 The deemed facts are incorporated herein by this

reference. Petitioner resided in Alabama when he filed his petition.

d nt filed a motion to show cause why proposed

2On March 4, 2011, respon e

tablished under Rule 91(f) and

facts and evidence should not be accepted as esder dated March 8, 2011, this Court

attached a proposed stipulation of facts. By ndent's motion in accordance with

ordered that petitioner file a response to respPetitioner failed to file a response to

Rule 91(f)(2) on or before Mar ied with Rule 91(f)(2). By order dated April 7,

respondent's motion that comp

der Rule 91(f) absolute and

2011, this Court made the order to show caust forth in respondent's proposed

deemed established the facts and ev neeeti ioner electronically submitted a

stipulation of facts. On April 12, 2 dent's Stipulation of Facts". By order dated

document titled "Response to Respon

1 ve to file the response out of time

April 13, 2011, this Court granted petitioned ti ely. By that same order, this Court

because petitioner had attempted to rd ord red the Clerk of the Court to file

vacated its order of April 7, 201 an 's Sti ulation of Facts" as petitioner's

petitioner's "Response to Respond20 1 ord r to show cause. By order dated April

response to the Court's March 8,

under Rule 91(f) absolute and

26, 2011, this Court made the order to show causrth in respondent's proposed

deemed established the facts and evidence se

stipulation of facts.

[*4] I.

B_aclig@Ls

After serving in the U.S. Air Force in Germany and receiving an honorable

discharge in 1976, petitioner attended school and worked at various jobs until

1993, when he and his wife, Kathi Good, moved to Florida.

Sometime after moving to Florida, petitioner and Mrs. Good built a house at

32210 Bartel Street for their family. Becaus

e of the influx of people moving into

the Pensacola area, petitioner and Mrs. Good decided to build a second house at

d Mrs Good subsequently moved into the house

32188 Bartel Street. Petitioner an

at 32188 Bartel Street. On a date not apparent from the record, petitioner and Mrs.

at 13450 County Road 91. Petitioner initially titled

Good also acquired property

all three properties in his name.

II.

B_ackgrmind

In 1999 petitioner founded Prepare the Way Ministries. He did not consult

about the tax aspects of operating through

with a certified pubhc accountant

Prepare the Way Ministries. Petitioner, however, 1Serformed some research

-5[*5] regarding Federal taxation and also read a book by Joseph N. Sweet3

regarding ministries and taxation.

In 1999 petitioner also established Treasures in a Field Investments,4 an

unincorporated business trust organization (UBTO). He used Treasures in a Field

Investments to conduct transactions and to make conveyances. Petitioner, acting

through Treasures in a Field Investments, received and deposited funds into

various trust accounts and used funds from trust accounts to pay his business and

personal living expenses.

3Mr Sweet has been permanently enjoined from "[o]rganizing, promoting,

marketing, or selling the tax shelter, plan, or arrangement entitled 'GOOD

for FORM 1040 Filers" and from "[o]rganizing, promoting, marketing, or se ing

'Unincorporated Business Trust Organizations' (a/k/a 'UBTOs') or any other

abusive tax shelter, plan, or arrated ta esthat incites taxpa ers to att pt to y olate

the internal revenue laws . U_ni

. . .

2189 (M.D. Fla. 2002). Pursuant to Fed. R. Evid. 201, we take judicia notice o

the District Court's order with respect to Mr. Sweet.

4David Marvin Swanson d.b.a. Dynamic Monetary Strategies, created the

Treasures in a Field Investments trust organization for petitioner. On November

15 2006, the U.S. District Court for the Middle District of Florida, Tampa

Division, permanently enjoined Mr. Swanson from, among other things, [s]elling

or organizing any type of trust, limited liability company, or similar arrangement,

as art of which Swanson advocates for the noncompliance of the income tax aws

or ax evasion, misrepresents the tax savings realized by using the arrangement, or

conceals the receipt of income".

-6[*6] B.

Property Transactions

In 1999 petitioner and Mrs. Good transferred the properties at 32210 Bartel

Street, 32188 Bartel Street, and 13450 County Road 91 to Treasures in a Field

Investments.5 In 2002 Treasures in a Field Investments granted to petitioner and

his family an unrecorded life estate with respect to the property at 13450 County

Road 91. In 2003 Treasures in a Field Investments sold the property at 32210

Bartel Street.6 In 2004 Treasures in a Field Investmenfs sold the property at 32188

Bartel Street to Samuel J. Fitts and Iris K. Fitts for $120,000.

On a date not apparent from the record, petitioner and Mrs. Good began

building a house at the 13450 County Road 91 property. After the sale of the

property at 32188 Bartel Street in 2004, they lived in the partially constructed

5With respect to at least one of the properties, p¼titioner effectively

transferred the property on February 2, 1999. However, neither petitioner nor any

witness signed the instrument of transfer until September 13, 2000.

6Mrs. Good testified that the children of Samuel J. Fitts and Iris K. Fitts

purchased the 32210 Bartel Street property. The record contains a certificate of

trust executed on June 9, 2003, by Shawn Dornstadter, petitioner's son-in-law.

The accompanying papers show that Treasures in a Field Investments transferred

real property to Michael J. Fitts and Doxie H. Fitts. We infer from the record that

Michael J. Fitts and Doxie H. Fitts purchased the 32210 Bartel Street property.

The record does not disclose the amount of the selling price with respect to the

sale.

-7[*7] house at 13450 County Road 91 while thëy continued its construction.

Petitioner and Mrs. Good used the proceeds from the sale of the property at 32188

Bartel Street to fund construction of the house at 13450 County Road 91.

Until 2004 petitioner operated Prepare the Way Ministries through the

Field Investments UBTO. In 2004 using a plan promoted by Glen

Treasures in a

Stoll, petitioner reorganized his alleged ministry into á ministerial trust.8 Mr. Stoll

has since been enjoined from engaging in such promotions.9 To accomplish the

reorganization, a resolution was prepared purportedly to show that the board of

k the house at 13450 County Road 91 .

7In 2004 Hurricane Ivan struc

042 .

ortion of the house while

Petitioner and Mrs. Good continued to hve m a p ds they received. Although

repairing the remainder using the msurance proc ed the insurance proceeds into

Mrs. Good testified that she and petiti r deposinot identify any deposits as

one of the ministry bank accod a the Court could not identify any such deposits

deposits of insurance procee

from information in the record.

d in business transactions with

8During the years in issue petitioner enga he Work of His Hands

Mr. Stoll. In 2008 Mr. Stoll, acting as trustee oconveyed two parcels of land,

1 o n d y eti nemimst la trusod and conveyed to Treasures in a

Field Investments, to Andy and Renee Knott.

Mr Stoll had been enjoined from engaging in

9The parties stipulated that .

trategy. Pursuant to Fed. R.

the omotion of m nistei 1 no e of th injunc ngproceeding. U_nite_d_Sjat_ea

.Stoll, 2005 WL 1763617 (W.D. Wash. 2005).

-8[*8] trustees of Treasures in a Field Investments took áction to terminate the

operation of Treasures in a Field Investments as a UBTO, reorganize the entity as

a "Church Ministry Trust", and change the entity name to Treasures in a Field.

The resolution, which the board allegedly adopted, pr

ided that the reorganized

Treasures in a Field would be consistent with section 508(c)(1)(A) and section

501(c)(3).

During the years in issue petitioner held out Prepare the Way Ministries as a

section 501(c)(3) organization. In.2004 Mrs. Good ex cuted a document allegedly

certifying that Prepare the Way Ministries had a "non-taxable status". However,

Treasures in a Field failed to submit a Form 1023, Aplálication for Recognition of

Exemption Under Section 501(c)(3) of the Internal Revenue Code. Instead,

petitioner, on behalf of Prepare the Way Ministries, prepared a Form W-8BEN,

Certificate of Foreign Status of Beneficial Owner for United States Tax

Withholding.1° Petitioner materially altered*the Form ñV-8BEN by adding an

additional box labeled "church" under the portion of the form requesting

identification of the type of beneficial owner. Petitioner used this Form W-8BEN

1°Jason Evans, acting as '.'steward" for Prepare t ie Way Ministries, executed

the Form W-8BEN.

-9[*9] to hold Prepare the Way Ministries out as a tax-exempt entity for transactions

requiring third-party reportmg.

B_a_nnk_AcgMLts

From December 31, 2001, through December 29, 2006, petitioner

maintained an account ending in 9269 (account 9269) in the name of Prepare the

Bank The signature card for account 9269 showed

Way Ministries at Regions

petitioner, Mrs. Good, Shane M. Good, Julie A. Good, Mr. Dornstadter, and

Summer C. Dornstadter, petitioner's daughter, as authorized signatories." The

employer identification number (EIN) petitioner gave to Regions Bank was

929099107 and was false. Petitioner use

d this false EIN to satisfy Region's Bank

requirement for establishing an account.

From April 29, 2003, through December 29, 2006, petitioner maintained an

account ending in 2952 (account 2952) in the name of Treasures in a Field

Investments at AmSouth Bank." Only petitioner an

d Mrs Good were authorized

t'oner Shane M.

dentify the relationships among peti i

"The record does not i

the record as a whole that Shane M.

Good, and Julie A. Good, but we mfer o titioner's family.

Good and Julia A. Good are members o p

1 31 2004 account 2952 was held under

From April 29; 200e I vestment . Beginning in approximately August

200naa counta 9r52 a held under the name Prepare the Way Mmistries d.b.a.

Treasures in a Field Investments.

- 10 t 2952. No EIN was provided to AmSouth Bank. We

[*10] signatories for accoun

refer to account 9269 and account 2952 collectively as the ministry bank

accounts."

III.

etitioner went on numerous trips, including trips

During the years in issue p

to Europe, which he testified at trial were missionary trips.

Petitioner admitted

entry and landscaping work and

during his testimony that he also performe carp

trained horses and that he rented space in

the 32210 and 32188 Bartel Street

properties to families involved in his purported ministry.

Petitioner did not maintain a person

al bank acòount separate from the

ministry bank accounts, and he made no distinction Êetween his personal finances

042.

Petitioner deposited funds from his

and the finances of his alleged mmistry.

activities, including income he received for performing various services, into the

which he had total do inion and control. The

ministry bank accounts, over

. 042 pai d p etitioner's living expenses, including room and board, as

alleged ministry

By collectively referring to the accont t

a qu

bank accounts, we are

1ed as a church under

not concluding that petitioner operated an e t bank accounts simply for

the Code. We refer to the accounts as mims ry

convenience

"He also testified that he conducted churc meetings and other events at his

home.

- 11 [*11] well as petitioner's tax bills on the property at 13450 County Road 91.

Petitioner and Mrs. Good used a check card tied to account 2952 at restaurants,

grocery stores, a veterinarian's office, home improvement stores, gas stations,

clothing stores, Wal-Mart, and,Amazon.com. During 2002-04 petitioner and Mrs.

Good used funds in account 9269 to pay their mortgage and their cellular

telephone bills. Petitioner and Mrs. Good also used funds in the ministry bank

accounts to pay their American Express credit card bills.

IV.

Petitioner's Tax Reporting and the Notices of Deficiency

Petitioner failed to file Federal income tax returns for 2002-06.

Accordingly, respondent prepared substitutes for returns (SFRs) for petitioner for

2002-06 pursuant to section 6020(b). Respondent subsequently mailed to

petitioner Letters 950 (so-called 30-day letters) with attached documents,

including the SFRs, relating to 2002-06.

During respondent's examination for petitioner, respondent's revenue agent

reconstructed petitioner's income by analyzing deposits into the ministry bank

accounts. The revenue agent determined that petitioner made total deposits as

follows:

- 12 [*12] Y__ear

2002

2003

2004

2005

2006

A_c_cco_utiH9

$37,939

17,256

62,971

61,631

21,091

-0$37,913

59,477

87,356

30 824

$37,939

55,169

122,448

148,987

51,915

The revenue agent determined that petitioner made taxable deposits as follows:15

Y_ear

2002

2003

2004

2005

2006

$37,643

16,428

58,183

61,631

21,091

$36,113

59,013

65 058

27 767

$37,643

52,541

117,196

126,689

48,858

t tabulated the total

15With respect to account 2952, the 1voca ed axable deposits between gross

deposits, eliminated nontaxab edudepositsProfit or Loss From Business, and rental

receipts from petitioner s Sc

e or Loss, and tabulated the results

income from Schedules E, Supplemental neot e record contains a copy of the

for each year. With respect to account

042dividual line items for the account.

revenue agent's spreadsheet showi gd ce ain deposits as nontaxable deposits,

Although the revenue agent i d Schedule E rental income, respondent's revenue

Schedule C gross receipts, an

Accordingly, for 2002-04 we have calculated

agent failed to tabulate the results.

ect to account 9269 by eliminating

petitioner's total taxable deposits with resp ts the revenue agent identified as

from petitioner's total deposits those depos ent's agent did not eliminate any

able. For 2005-06, however, respon

d os ts from account 2969 as nontaxable deposits.

- 13 [*13] The revenue agent treated the taxable deposits as income and allocated the

income between petitioner's Schedules C and Schedules E as follows:'6

Schedule C:

Year

Account 9269

Account 2952

Total

2002

2003

2004

2005

2006

$24,659

12,803

57,880

61,631

21,091

-0$34,898

58,513

65,058

27,767

$24,659

47,701

116,393

126,689

48,858

Year

Account 9269

Account 2952

Total

2002

2003

2004

$12,984

3,625

303

-0$1,215

500

$12,984

4,840

803

Schedule E:

On March 18, 2010, respondent mailed to petitioner notices of deficiency

for the years in issue. Respondent determined that petitioner had unreported

income as follows:"

16Respondent's revenue agent did not tabulate the total amount of Schedule

C gross receipts for 2002-06 with respect to account 9269. On the basis of the

spreadsheets, we find that the revenue agent determined that petitioner had

unreported Schedule C gross receipts equal to the total amount of taxable deposits

in account 9269 minus the Schedule E rental income with respect to that account

for each year.

"The amounts of unreported income as finally determined in the notices of

deficiency do not match in all respects the reconstruction of income prepared by

the revenue agent.

- 14 * 4

Year

[1]

2002

_S4Lduk_E

2003

2004

2005

2006

$12,984

4 840

Total

$44,260

54,405

83 440

132 990

48 859

803

-0-0-

$57,244

59,245

84,243

132,990

48,859

Respondent also determined that petitioner had self-employment income of

$44,260, $54,405, $83,440, $132,990, and $48,859, for 2002, 2003, 2004, 2005,

and 2006, respectively, and that petitioner had a short- erm capital gain of

$114,667 for 2004.18

After receiving the notices of deficiency, petitioner filed a petition with this

dent's determinations. The Court set this case for trial at

Court contesting respon

the Mobile, Alabama, trial session.

Following trial we held the record open to allok petitioner the opportunity

to produce to respondent additional evidence, which, if appropriate, could then be

f $114 667 was.attributable to the sale of the

18The short-term capital gain o

d Iris K. Fitts. On March 22,

32188 Bartel Street property to Samuel J. F ttsll he 52188 Bartel Street property to

2004, Prepare the Way Mm ts for 120,0 0 RespÊndent determined that

Samuel J. Fitts and Iris Kf $5 323 and had "cost[s]" bf $10 with respect to the sale.

petitioner incurred fees o

had a basis of zero in the property.

cco

ngly espo d

sale of the property.

dete

inpeetitioneretitioner realized gain of $114,667 from

- 15 f the trial record. The parties did not

[*15] stipulated and submitted as part o

submit a supplemental stipulation.19 Consequently, we decide this case on the trial

record.

OPINION

s deficiency determination ordinarily is entitled to a

The Commissioner

presumption of correctness. _S_ee B

(11th Cir. 2003), affg T.C. Memo.

, 324 F.3d 1289, 1293

2001-43 However, when a case involves

for the Eleventh Circuit, to which

the U.S. Court of Appeals

unreported income,

an appeal in this case would lie absent a stipulation to the contrary, seg sec.

7482(b)(1)(A), (2), has

. 042 's determination of unreporte

held that the Commissioner

ly if the determination is

income is entitled to a presumption of correctness on

supported by an evidentiary foundation linking the taxpayer to an income-

. .

4 F 2d 1542, 1549 (11th Cir.

producing activity, see B

91-636 A determination that is unsupported by any

1993), af£g T.C. Memo. 19

evidence is arbitrary and erroneous, see

190n July 21, 2011, pet tioner

"Petitioner's Status Report".

, 596 F.2d

filed a document, with attached exhibits, titled

- 16 [*16] 358, 362 (9th Cir. 1979), rev'a 67 T.C. 672 (1977), but the required showing

is minimal, see Blohm v. Commissioner, 994 F.2d at 1549 (citing Carson v. United

States, 560 F.2d 693, 697 (5th Cir. 1977)). Once the Commissioner produces

evidence linking the taxpayer to an income-producing activity, the presumption of

correctness applies and the burden of production shifts to the taxpayer to rebut that

presumption by establishing that the Commissioner's dete

ination is arbitrary or

erroneous. Id.

Respondent introduced evidence that petitioner directed the operations and

financial affairs of Prepare the Way Ministries, Treasures in a Field Investments,

and Treasures in a Field during the years in issue. Respondent also introduced

evidence that, in addition to his alleged ministry work, petitioner engaged in other

secular work in exchange for payment and deposited proceeds from all his

activities into ministry bank accounts. See Tokarski v. Commissioner, 87 T.C. 74,

77 (1986) (holding that bank deposits evidence receipt of income). Respondent

introduced evidence that petitioner, acting through Prepare the Way Ministries and

Treasures in a Field Investments, sold the 32188 Bartel treet property.

Accordingly, we conclude that respondent laid the requi ite minimal evidentiary

foundation for the contested unreported income adjustments and that respondent's

determinations are entitled to a presumption of correctness.

-17-~

[*17] Although his argument is not entirely clear, petitioner appears to contend

that respondent's determinations are not entitled to the presumption of correctness

because respondent acted arbitrarily in issuing the notices of deficiency.

Petitioner contends that respondent's deteríninations constitute a "naked"

assessment because resþondent has failed to link petitioner's receipt of income to

an income-generating activity.

The presumption of correctness does not apply when the Commissioner fails

to make a determination and issues a "'naked' assessment without any foundation

whatsoe er". United States v. Janis, 428 U.S. 433, 441 (1976). As we stated

above, however, respondent has introduced substantive evidence to establish that

petitioner, acting through Prepare the Way Ministries, Treasures in a Field

Investments, and Treasures in a Field, received payments, made deposits into

various ministry bank accounts, engaged in income-producing activities during the

years in issue, and sold real property in 2004. That evidence is more than

sufficient to support respondent's determinations in the notices of deficiency.

Accordingly, we find that the notices of deficiency are not "naked assessments".

Burden of Proof

Generally, the taxpayer bears the burden of proving that the Commissioner's

determinations in a notice of deficiency are erroneous. See Rule 142(a); Welch v.

- 18 [*18] Helverina, 290 U.S. 111, 115 (1933). If, however, a taxpayer produces

credible evidence2o with respect to any factual issue relevant to ascertaining the

taxpayer's tax liability and satisfies the requirements of seption 7491(a)(2), the

burden of proof on any such issue shifts to the Commissio er. Sec. 7491(a)(1).

Section 7491(a)(2) requires a taxpayer to demonstrate that he or she complied with

the substantiation requirements, maintained all records required under the Code,

and cooperated with reasonable requests by the Secretary2i for witnesses,

information, documents, meetings, and interviews. See also Higbee v.

Commissioner, 116 T.C. 438, 440-441 (2001). The taxpayer bears the burden of

proving that all of the section 7491(a) requirements have een satisfied. Rolfs v.

Commissioner, 135 T.C. 471, 483 (2010), aff'd, 668 F.3d 888 (7th Cir. 2012).

Petitioner does not contend that section 7491(a)(1) applies, and the record

establishes that he did not satisfy the section 7491(a)(2) requirements.

20Credible evidence is evidence the Court would find sufficient upon which

to base a decision on the issue in the taxpayer's favor, absent any contrary

evidence. See Higbee v. Commissioner, 116 T.C. 438, 442 (2001).

2iThe term "Secretary" means "the Secretary of th Treasury or his

delegate", sec. 7701(a)(11)(B), and the term "or his deleg;ate" means "any officer,

employee, or agency of the Treasury Department duly authorized by the Secretary

of the Treasury directly, or indirectly by one or more redélegations of authority, to

perform the function mentioned or described in the context", sec.

7701(a)(12)(A)(i).

- 19 [*19] Consequently, petitioner bears the burden of proof as to any disputed factual

issue. See Rule 142(a).

II.

Parties'Arguments

Respondent contends that petitioner, a "carpenter", received taxable income

and deposited that income into the ministry bank accounts. Respondent contends

that petitioner is liable for all taxable income deposited into the ministry bank

accounts because petitioner exercised dominion and control over those accounts.

Respondent also contends that petitioner is liable for self-employment tax with

respect to his unreported income. Relying on the determination of unreported

income, respondent further contends that petitioner,had sufficient gross income to

require him to file Federal tax returns for the years in issue and that he failed to

file such returns. Respondent also contends that petitioner is liable for a civil

penalty for fraudulently failing to file his tax returns and additions to tax for

failing to pay his Federal income tax and estimated tax for the years in issue.

Petitioner contends that he did not receive any taxable income during the

years in issue. Petitioner contends that he was a man of God engaged in the work

of God during the years in issue and that everything he received or acquired

belonged to God. He further contends that he is exempt from Federal taxation

because his activities during the years in issue were religious. He contends that

- 20 [*20] any assets he acquired were for the purpose of his ministry and any

disposition of those assets should not be taxed to him. Petitioner also contends ,

that he had no obligation to file Federal tax returns beåause he did not have

sufficient income to require him to file such returns.

We construe petitioner's argument, at least in part, to be that he was a

minister entitled to exclude all income and gain he received and that he was

entitled to all benefits under the Code that generally a¾crue to ministers and

church organizations. Accordingly, we will consider:1(1) whether petitioner's

alleged ministry constituted a church, as that term is defined for Federal tax

purposes; and (2) whether petitioner was a minister of the gospel, as that term is

defined for Federal tax purposes 22 .

Whether Petitioner's Alleged Ministry Cönstituted a Church

Section 501(a) provides that certain organizatioí1s, including churches, shall

be exempt from Federal taxation. See also sec. 501(c)(3). A church that qualifies

as an exempt organization for purposes of section 501!is not required to file an

application for exemption from taxation. Sec. 508(c)(il)(A); see also sec. 1.5081(a)(3)(i)(a), Income Tax Regs. Neither the.Code nor(the regulations define the

term "church". See Found. of Human Understanding v. Commissioner, 88 T.C.

22Neither party specifically addressed these issues in their post-trial briefs.

- 21 [*21] 1341, 1356 (1987). However, as we havè stated: "Although every church

may be a religious organization, not every religious organization is a church." Il

at 1357.

hurch is a fact-specific inquify. S_g id. In deciding

Whether an entity is a c

whether an entity is a church, this Court primarily considers the entity's religious

purposes and "the means by which its religious purposes are áccomplished." IÅ

hurch includes a body of believers or communicants that

"'At a minimum, a c

assembles regularly in order to worship.'" IÅ (quoting

, 490 F. Supp. 304, 306 (D.D.C. 1980))

The Internal Revenue Service (IRS) has articulated criteria that it uses to

lify for church status. Id. at 1358. The criteria

identify organizations that qua

include the following:

"(1) a distinct legal existence;

(2) a recognized creed and form of worship;

(3) a definite and distinct e clesiastical government;

(4) a formal code of doctrine and discipline;

(5) a distinct religious history;

(6) a membership not associated with any other church or

denomination;

- 22 [*22] (7) an organization of ordained ministers;

(8) ordained ministers selected after completing pre 541eribed

studies;

(9) a literature of its own;

(10) established places of worship;

(11) regular congregations;

(12) regular religious services;

(13) Sunday schools for religious instruction of the young; and

(14) schools for the preparation of its ministers."

Id. (quoting Internal Revenue Manual 7(10)69, Exempt O ganizations

Examination Guidelines Handbook 321.3(3) (Apr. 5, 1982)); see also Chambers v.

Commissioner, T.C. Memo. 2011-114, slip op. at 14-15.

ile we have declined

to adopt these criteria as a test, we have found that the cri eria are helpful in

deciding whether an entity is a church. See Found. of Human Understanding v.

Commissioner, 88 T.C. at 1358.

Although Mrs. Good testified that petitioner held Ainistry meetings at his

home, the record contains no evidence regarding the ide tities of those who

attended the meetings and their relationship to petitioner or whether petitioner

held these meetings regularly. Petitioner offered only m nimal testimony

regarding his purported ministry activities. He did not c 11 any of his alleged

- 23 [*23] parishioners to testify. Furthermore, the record shows that petitioner's

purported ministry did not have a distinct legal existence separate from petitioner.

See, e.a., Hughes v. Commissioner, T.C. Memo. 1994-139. Petitioner failed to

introduce any credible evidence to support a finding that his purported ministry

activity satisfied any of the other criteria outlined above.

Petitioner had the burden of proving that his purported ministry activity

qualified as a church, and he failed to do so." See, e.a., Spiritual Outreach Soc'y

v. Commissioner, T.C. Memo. 1990-41, aff'd, 927 F.2d 335 (8th Cir. 1991).

Whether Petitioner Was a Minister of the Gospel

Generally, compensation for services rendered is includable in gross

income. See sec. 61(a)(1). However, section 107 provides that a minister of the

gospel may exclude from gross income a rental value or rental allowance provided

to him as part of his compensation. See also sec. 1.107-1, Income Tax Regs. A

minister is an individual "authorized to administer the sacraments, preach, and

conduct services of worship." Salkov v. Commissioner, 46 T.C. 190, 194 (1966).

An individual is a minister if, acting pursuant to his or her authority as a minister,

"Even if we held that petitioner's alleged ministry constituted a church

under sec. 501, petitioner would still have to include in income funds deposited

into the ministry bank accounts because he exercised full control over those

accounts and used the funds to pay his personal expenses. See, e.a., Chambers v.

Commissioner, T.C. Memo. 2011-114, slip op. at 23-24.

- 24 [*24] he or she performs sacerdotal functions, conducts religious worship,

participates in the maintenance of "religious organizations nd their integral

agencies", and performs "teaching and administrative duti s at theological

seminars." Sec. 1.107-1(a), Income Tax Regs.; see also Brannon v.

Commissioner, T.C. Memo. 1999-370.

While petitioner testified as to his religious education and experience, his

testimony alone is insufficient to convince us that he was a minister within the

meaning of section 107. Petitioner failed to introduce any credible evidence to

show that he was a minister or that he performed sacerdotal functions, participated

in the conduct or control of religious boards, societies, or other agencies related to

his religious affiliation, or performed any teaching or ad inistrative duties at

religiously affiliated institutions. Accordingly, we find t at petitioner has not

established that he was a minister for Federal tax purpose . See, e.a., Weeks v.

Commissioner, T.C. Memo. 1987-198.

III.

Petitioner's Unreported Income for the Years in issue

Bank Deposits

In General

Gross income includes "all income from whatever source derived". Sec.

61(a). A taxpayer must maintain books and records establishing the amount of his

- 25 [*25] or her gross income. Sec. 6001. If a taxpayer fails to maintain and produce

the required books and records, the Commissioner may determine the taxpayer's

income by any method that clearly reflects income. See sec. 446(b); P_et_glÅt_L

. .

T C 661 693 (1989); sec. 1.446-1(b)(1), Income Tax Regs.

Co_ngn_msigneer, 92 .

042

"need only be reasonable in light of

The Commissioner's reconstruction of income

all surrounding facts and circumstances." P

, 92 T.C. at

687.

ble method of reconstructing

The bank deposits method is a permissi

042 .

income. _S_ee

, 10

. .

2 T C 632 645 (1994); Se-e-alJia

. .

, T.C. Me mo . 2010-49, afM, 447 Fed. Appx. 130 (11th

Cir. 2011). Bank deposits constitute prima facie evidence of income. S_e_e

. .

T C at 77. The Commissioner need not show the

, 87 . 042

likely source of a deposit treated as income, but the Commissioner "must take into

account any nontaxable source or deductible expense of which * * * [he] has

knowledge" in reconstructing income using the bank deposits method. _S_ee

. .

T C at 645-646. However, the Commissioner need

, 102 . 042

not follow any "leads" suggesting that a taxpayer has deductible expenses. D_ibeg

. .

v9,

96 T. C . 858 , 872 (1991), aff'd, 959 F.2d 16 (2d Cir. 1992).

- 26 [*26] After the Commissioner reconstructs a taxpayer's income and determines a

deficiency, the taxpayer bears the burden of proving that the Commissioner's use

of the bank deposits method is unfair or inaccurate. See Clayton v. CommjLsiiomL

102 T.C. at 645. The taxpayer must prove that the reconstruction is in error and

may do so, in whole or in part, by proving that a deposi is not taxable. S_m ii

Respondent introduced credible evidence that petitioner did not maintain

adequate books and records with respect to his income.24 Therefore, we find that it

was reasonable for respondent to use an indirect method, i.e., the bank deposits

method, to reconstruct petitioner's income. Accordingly, petitioner bears the

burden of proving that respondent's determinations ar arbitrary or erroneous.

Petitioner's sole argument is that the deposits into the ministry bank accounts do

24Although not entirely clear, petitioner's cont'ention appears to be that t

IRS cannot require him to mativi iesoand b a sfmanc al recordare pr vileged. Sec.

may not regulate religious ac

le f

tax" maintain records. Petitioner

6001 requires that "[e]very ercont nt on that he pers nally is exempt from the

has offered no suppo

6001 While exen pt organizations are reheved

recordkeepmg requirement o sec.

the Commissio ier never recognized Prepare

of some recordkeeping requirements, ization under sec. 501(c)(3). _Se_e Oilrclutf

the Way Ministries as an exempt o gan381 452 (1984), afff d, 823 F.2d 1310 (9th

Scientology v. Commi_sgoner,

. .

.th ecific procedures set

Cir. 1987). Additionally, while the IRShmush rec r

titioner has not proven

forth

sec. 7611a before

c urc sought by

, respondent

alified as

that hein operated

churchitorcan

thatobtam

the records

at 20 21

church records. S_eee_als

Accordingly, we reject petitioner's argument.

, slip op.

- 27 [*27] not constitute taxable income to him because the deposits are attributable to

his ministry and, as religious funds, are not subject to taxation.

Section 61(a) defines gross income as "all income from whatever source

derived, including (but not limited to) the following items: (1) Compensation for

services, including fees, commissions, fringe benefits, and similar items; (2) Gross

income derived from business; (3) Gains derived from dealings in property; (4)

Interest; (5) Rents". The definition is construed broadly and extends to all

accessions to wealth, clearly realized, over which the taxpayer has complete

control. _S_ee

, 348 U.S. 426, 431 (1955). As

the Supreme Court explained, a gain "constitutes taxable income when its

recipient has such control over it that, as a practical matter, he derives readily

realizable economic value from it." R

, 343 U.S. 130, 137

(1952).

When the Commissioner reconstructs a taxpayer's income using the bank

lude in gross income "deposits into all

deposits method, the Commissioner may inc

accounts over which the taxpayer has dominion and control, not just deposits into

the taxpayer's personal bank accounts.,

17-18; ge_a_lso U

, slip op. at

, 330 F.2d 30, 38 (3d Cir. 1964); D_a_viis

- 28 -

[*28] v9, 226 F.2d 331, 334-335 (6th Cir. 1955); P_ricee

. .

, T.C. Memo . 2004-103, slip op. at 25; C

T.C. Memo. 2003-42, slip op. at 9; W

. .

611,

, T.C. Memo. 1989-

, 929 F.2 d 702 (6th Cir. 1991). A taxpayer

has dominion and control when the taxpayer is free to use the funds at will.

dicates dominion

R_u_ttkin, 343 U.S. at 137. Use of funds for personal purposes in

and control. W

, T.C. Memo. 1 89-611.

The Court has extended this general princip le to situations where a taxpayer

has dominion and control over an account titled in the name of a church or other

religious organization. For example, m W__o_oo&, this Court held that "[a]mounts

deposited into bank accounts in the name o

f the church constituted income of

. d total dominion an control over those funds and

petitioners because they exercise

. .

enses and other personal purposes .

expended them for their personal living exp

, T.C. Memo. 2000-296, slip op. at 8-9.

. .

Similarly, in

at 19-24 this Court held

, slip op.

that all deposits into church bank accounts properl were includable in the

taxpayers' gross income because the taxpayers "fu ly controlled the church

accounts, used money in those accounts at will, including to pay personal

expenses, and were not accountable to anyone in their congregation for their use

- 29 [*29] of the church funds." While the taxpayers in Chambers v. Commissioner,

slip op. at 23, testified that they used the money for mission trips and ministry

expenses, this Court held that the church bank account funds were includable in

the taxpayers' gross income because they failed to supply any receipts, records, or

other evidence to substantiate the nature and use of the funds.

Petitioner testified that his primary occupation is minister of the gospel. He

further testified that he performed all of his secular work as a volunteer and that

any payment he received as a result of such work constituted a contribution to the

ministry. With respect to the pui.ported rental income, petitioner testified that he

made living space in the Bartel Street properties available to families in his

ministry, that the families contributed to Prepare the Way Ministries in exchange

for use of the space, and that he suggested the amount of the monthly contribution.

Petitioner testified that he relied on direct donations from people and other

ministries as well as the funds in the ministry bank accounts to support himself

during the years in issue. He testified that he received no salary and instead

received only housing and food in exchange for his services. He further testified

that the money that came into the ministry was distributed to other people. He

also testified that he and Mrs. Good used the money in the ministry bank accounts

- 30 [*30] to pay for ministry-related expenses. We do not;find this testimony

convincing or credible.

Respondent introduced the signature cards for tlie ministry bank accounts

showing that only petitioner and his family members had signatory authority over

the accounts. Respondent also introduced bank statements for the ministry bank

accounts which show that petitioner and Mrs. Good regularly used the ministry

bank accounts to pay their personal expenses. Finally[petitioner testified that he

deposited payments he received for services rendered into the ministry bank

accounts and that he used the funds in the ministry bank accounts to pay his

personal expenses.

Petitioner had unfettered access to the funds in the ministry bank accounts.

He used the money in the ministry bank accounts at wjll, including to pay his

personal expenses and those of his family members. Petitioner did not maintain a

separate personal bank account or attempt to separate his personal income and

expenses from the income and expenses of his alleged ministry. Instead, petitioner

used the ministry bank accounts as his own bank accoimts and used the funds

therein to pay his personal living expenses, mortgage, property taxes, and home

construction costs.

- 31 [*31] Because petitioner exercised dominion and control over the ministry bank

accounts, all taxable deposits into those accounts are includable in petitioner's

gross income. S_ge Chambers v. Commi_sgiooner, T.C. Memo. 2011-114; Sg_-also

, 929 F.2d 110, 113 (2d Cir. 1991) (holding that rental

income the taxpayer deposited into a church account constituted taxable income to

the taxpayer upon receipt), aff'g in part, vacating irmart, and remandin_g T.C.

Memo. 1989-671.

Reconstructin9me Using the Bank

D_epo_sits__Met__gíl

Under the bank deposits method, the Commissioner may assume that all

money deposited into the taxpayer's account is taxable income. D._lheILL

. .

6 T C at 868 However, as nofed supra, the Commissioner must

C_omanssigner, 9 . .

take into account any nontaxable source of income or deductible expense of which

he has knowledge. EL The Commissioner's use of the bank deposits method is

not invalidated simply because some of the calculations are in error. See ish

Having decided that respondent acted reasonably in using an indirect

method to reconstruct petitioner's income and having rejected petitioner's sole

argument regarding whether such income constituted taxable income, we now

review respondent's calculations of petitioner's taxable'income for the years in

- 32 [*32] issue. To show the calculation of petitioner's taxable income, respondent

introduced only the revenue agent's workpapers. Howe er, with respect to 2002,

2003, and 2005, in the notice of deficiency respon

had taxable income in exëess o

dent determined that petitioner

f taxable deposits for tho e years as determined by

the revenue agent. Respondent has introduced no evid ce to show the

calculation of petitioner's taxable income as set forth i the notice of deficiency.

Accordingly, we will evaluate respondent's determinat on of petitioner's taxable

income using the revenue agent's workpapers for the ybars in issue.

With respect to 2002, respondent's revenue age t determined that petitioner

made taxable deposits into the ministry bank account f $37,643. The revenue

agent determined that the taxable deposits for 2002 c

sisted of Schedule C gross

receipts of $24,659 and Schedule E rental income of 12,984. However, in the

notice of deficiency respondent determined that petit ner had Schedule C gross

receipts of $44,260 and Schedule E rental income of

12 984 Respondent has not

042

introduced any evidence to explain the difference between the revenue agent's

$2 659 and the $44,260 gross

calculation of Schedule C gross receipts tot ing

receipts figure in the notice of deficiency. Furthe

re, an analysis of the ministry

bank account statements for 2002 reveals that the re enue agent properly

_·33 _

[*33] reconstructed petitioner's Schedule C gross receipts for 2002. An analysis

of the revenue agent's spreadsheet with respect to pétitioner's Schedule E rental

income shows that the revenue agent erroneously included in petitioner's income a

number of checks that were drawn on,'rather than deposited into, the ministry bank

accounts. The revenue agent erroneously included $4,844 in petitioner's Schedule

E rental income. Accordingly, we find that petitioner had Schedule C gross

receipts of $24,659 and Schedule E renfal=income of $8,140 for 2002.

With respect to 2003, respondent's revenue agent determined that petitioner

made taxable deposits into the ministry bank accounts of $52,541. The revenue

agent determined that the taxable deposits for 2003 consisted of Schedule C gross

receipts of $47,701 and Schedule E rental income of $4,840. However, in the

notice of deficiency réspondent determined that petitioner had Schedule C gross

receipts of $54,405 and Schedule E rental income of $4;840. Respondent has not

introduced any evidence to explain the difference between the revenue agent's

calculation of Schedule C gross receipts totaling $47,701 and the $54,405 gross

receipts figure in the notice of deficiency. Furthermore, an analysis of the ministry

bank account statements for 2003 reveals that the revenue agent generally

reconstructed petitioner's Schedule.C gross receipts for 2003 properly, with the

- 34 [*34] following exception. We find that the revenue agent included the same

check for $10 in petitioner's Schedule E rental income f

2002 and in his

Schedule C gross receipts for 2003. Because we conside the $10 check as

Schedule E rental income for 2002, we will eliminate $10 from the revenue

agent's calculation of petitioner's Schedule C gross receipts for 2003. We also

find that the revenue agent erroneously tabulated petitioner's Schedule E rental

income. The revenue agent determined:that petitioner deposited into the ministry

bank accounts nine checks that constituted Schedule E rental income. The

spreadsheet shows that the revenue agent included in his calculation of petitioner's

Schedule E rental income three checks twice.25 We will eliminate the duplications

from the calculation of petitioner's Schedule E rental income. Accordingly, we

find that petitioner had Schedule C gross receipts of $47 061 and Schedule E

rental income of $3,140 for 2003.

25The revenue agent's spreadsheet shows the erroneous double inclusion of

the following checks: (1) check No. 1001 for $635; (2) check No. 274 for $215;

and (3) check No. 1016 for $850.

- 35 [*35] With respect to 2004,26 respondent determined that petitioner had Schedule

E rental income of $803 for 2004. .Respondent included in petitioner's rental

income a check for $500 from Samuel J. Fitts and Iris K. Fitts. This check

constituted earnest money for the purchase of the real property at 32188 Bartel

Street. Respondent properly included the earnest money as part of the selling

price of the property. Therefore, the $500 check should be excluded from

petitioner's 2004 Schedule E rental income. Accordingly, we find that petitioner

had rental income of $303 for 2004.

With respect to 2005, respondent's revenue agent determined that petitioner

made total taxable deposits into the ministry bank accounts of $126,689. The

26With respect to 2004, respondent's revenue agent determined that

petitioner had Schedule C gross receipts of $116,393. The revenue agent included

in petitioner's income a check for $9,000 that was deposited into account 9269.

Although the bank statement for account 9269 shows that the check was returned

for insufficient funds, respondent's revenue agent failed to exclude the $9,000

check from petitioner's taxable income.

Despite the revenue agent's error, we will refrain from adjusting petitioner's

2004 Schedule C gross receipts. Respondent determined in the notice of

deficiency that petitioner had Schedule C gross receipts of $83,440, an amount

that is $32,953 lower than the figure calculated by the revenue agent. The record

supports an inference that respondent subtracted from petitioner's totaled

Schedule C deposits amounts that constituted nontaxable income. Because the

amount subtracted, $32,953, exceeds the amount of the check at issue, we find that

petitioner is not entitled to an additional reduction in his Schedule C gross receipts

for the value of the check. Accordingly, we will sustain respondent s

determination with respect to petitioner's 2004 Schedule C gross receipts.

- 36 [*36] revenue agent determined that the taxable deposits for 2005 consisted of

Schedule C gross receipts of $126,689. However, in th notice of deficiency

respondent determined that petitioner had Schedule C gross receipts of $132,990.

Respondent has not introduced any evidence to explai the difference between the

revenue agent's calculation of Schedule C gross receipts totaling $126,689 and the

f ure in the notice of deficiency. Furthermore, our

$132,990 gross receipts ig

analysis of the ministry bank account statements for 2 05 confirms that the

revenue agent properly reconstructed petitioner's Schedule C gross receipts for

2005. Accordingly, we find that petitioner had Schedule C gross receipts of

$126,689 for 2005.

In summary, we find that petitioner had Schedule C gross receipts of

$24,659, $47,061, $83,440, and $126,689 for 2002, 2003, 2004, and 2005,

respectively. We sustain respondent's determinatio s regarding petitioner's gross

receipts for 2006. We also find that petitioner had Schedule E rental income of

$8,140, $3,140, and $303 for 2002, 2003, and 2004 respectively.

- 37 [*37] B.

A taxpayer must recognize gain from the sale or exchange of property,

unless the Code provides otherwise.

27 S

ec.

1001(c). Section 1001(a) defines gam

from the sale or other disposition of property as the excess of the amount realized

on the sale of property over the adjusted basis of the property sold or exchanged.

Seulso sec. 1.61-6(a), Income Tax Regs. Section 1011(a) generally provides that

a taxpayer's adjusted basis for determining the gain from the sale or other

shall be its cost, adjusted to the extent provided by section

disposition of property

tructed his own house, the taxpayer's basis is equal to

1016. If the taxpayer cons

the cost of building the house, including the amount paid for the lot. L_itteristvm

. .

T.C. Memo. 1992-524, gf'd, 21 F.3d 423 (4th Cir. 1994); G_ran..gser

T C Memo. 1970-155. The taxpayer has the burden of proving

the sale or

clude from income gain on

27Sec. 121(a) allows a taxpayer to eowned and used such property as his

exchange of property if the taxpayer f the five years immediately preceding the

rincipal residence for at least two o

in 2004. Mrs. Good testified

ale. Petitioner sold the 32188t artel1S88 B

St eet property before the 2004

that she and petitioner lived at

d another home, at 32210 Bartel Street.

sale. However, until 2003 petitioner owne

d Mrs Good moved to the 32188

The record does not show whether petitionerth 32210 Bartel Street property (i.e.,

Bartel Street property before titi he sale of the property in 2003. Accordingly,

before 2003) or immediate y

d the 32188 Bartel Street

we are unable to determine whether petat le t t of the five years preceding the

property as his principal resid ti ioner has not established that he is entitled to

excluof thany gain f o the sale of the property pursuant to sec. 121(a).

- 38 [*38] the basis of property for purposes of determining the amount of gain the

taxpayer must recognize.

, 271

1959), aff'g T.C. Memo. 1957-193; s_eee also K

F 2d 44 50 (9th Cir.

, T.C. Memo.

1954-174.

The 2004 capital gain relates to the sale by Treasures in a Field Investments

at 32188 Bartel Street. Petitioner does not dispute that he

of the real property

originally owned the 32188 Bartel Street property in 1 is own name, that he

transferred the property to Treasures in a Field Investments, and that Treasures m

a Field Investments sold the property to Samuel J. Fitts and Iris K. Fitts in 2004

for $120,000. Although not entirely clear, petitioner's only dispute appears to be

whether the proceeds from the sale of the property e nstitute taxable income to

him.

Petitioner testified that all of the buildings, including the house at 32188

Bartel Street, "were church buildings where church activities occurred." Mrs.

Good testified that she and petitioner resi

ded in the house at 32188 Bartel Street.

. .

She further testified that she

She also testified that the mmistry sold the ouse.

and petitioner used the proceeds from the sale of the house at 32188 Bartel Street

to fund construction of their new house at 13450 County Road 91.

- 39 [*39] Respondent introduced a copy of a reso lution in which the Elder Board of

11 the 32188 Bartel Street property to

Prepare the Way Ministries agreed to se

also introduced a copy of a purchase

Samuel J. Fitts and Iris K. Fitts. Respondent

6 2004 showing the seller of the property as Treasures

a reement dated February ,

$120 000, with a provision for $500 m earnest

in a Field and the purchase price as

ted into account 2952 a $500

money. The record shows that petitioner deposi

i K Fitts dated February 6, 2004.

check from Samuel J. Fitts and Ir s .

The evidence shows that petitioner use d Treasures in a Field Investments to

conduct his business and sales transactions. While petitioner testified that he

32188 Bartel Street, he also

tivities

from

the

house

conducted some ministry ac

1 residence. We find that Treasures in a Field

used the property as his persona

ld the 32188 Bartel Street property as petitioner s

Investments held title to and so

t include in gross income gain from the

nominee.28 Accordingly, petitioner mus

sale of the 32188 Bartel Street property.

idual who holds bare legal title to assets

28"A nominee is an entity ord a .' L

, T.C. Memo 2012owned by another

, 211 F.

284 (5th Cir. 2000).

- 40 [*40] In calculating the gain on the sale of the 32188 Bartel Street property,

respondent used the stated sale price of $120,000 and an adjusted basis of zero.

Petitioner failed to introduce any evidence regarding his acquisition and

construction costs, if any, for the 32188 Bartel Street property. While it is likely

that petitioner incurred costs in acquiring the lot and building the house on the

32188 Bartel Street property, petitioner did not introduce any credible evidence

regarding his cost basis or adjusted basis in the property. The record adequately

supports respondent's determination that Treasures in a Field Investments, acting

as nominee for petitioner, sold the property to Samuel J. Fitts and Iris K. Fitts for

$120,000.

Neither petitioner nor respondent addressed the issue of whether petitioner's

gain should be óharacterized as long-term or short-term c pital gain. In the notice

of deficiency respondent characterized petitioner's capital gain as short term.

However, the record contains sufficient evidence for us to decide whether the gain

should be characterized as long-term or short-term gain;

040ccordingly,

we consider

this issue tried by consent of the parties. See Rule 41(b).

Section 1222(3) provides that long-term capital gain is "gain from the sale

or exchange of a capital asset held for more than 1 year, if and to the extent such

- 41 [*41] gain is taken into account in computing gross income." While the record

d the 32188 Bartel Street property, the

does not show when petitioner ac¿luire

d the 32188 Bartel Street

record does show that in 1999 petitioner:transferre

Field Investments. We infer that petitioner owned the

property to Treasures in a

32188 Bartel Street property

at the time of the 1999 transfer. Accordingly, we

the sale of the 32188 Bartel Street property should

find that petitioner's gain from

be characterized as long-term capital gain.

to the amount of petitioner's 2004

We sustain respondent's determination as

dent's determination that the capital gain

capital gain, but we do not sustain respon

was short-term gam.

IV.

A taxpayer's self-employment income is subject to self-employment tax.

d and collected as part of the

Sec. 1401(a) and (b). Self-employment tax is assesse

income tax, must be included in computing any inco

overpayment for the applicable tax period, an

me tax deficiency or

d must be taken into account for

Sec. 1401; È sec. 1.1401-1(a), Income Tax Regs.

estimated tax purposes.

ally defined as "the net earnings from selfSelf-employment income is gener

employment derived by an individual". Sec. 1402(b). "The term 'net earnmgs

- 42 [*42] from self-employment' means the gross income deriÕed by an individual

h individual, less the deductions * * *

from any trade or business carried on by suc

" S

1402(a). Section 1402(c)(4) provides

attributable to such trade or business . ec..

that the term "trade or business" does not include "the pe formance of service by a

duly ordained, commissioned, or licensed minister of a church in the exercise of

1402( ) is effective for the minister.

his ministry" if an exemption under section

, 89 T.C. 922, 929 (1987). If the minister does

not file the application for exemption within the prescribed time, the minister is

subject to self-employment tax. Sec. 1402(e); sgg aho W

89 T.C. at 929-930.

Petitioner contends that he is not liable for self-employment tax because he

is a minister. Petitioner, however, did not introduce any credible evidence to

prove that he was a minister of a church, seee s_gp_m p.

24 or that the Schedule C

gross receipts determined by respondent were for the performance of services as a

minister. Moreover, the record contains no credible evidence that petitioner

submitted a Form 4361, Application for Exemption F om Self-Employment Tax

for Use by Ministers, Members of Religious Orders and Christian Science

Practitioners, for the years in issue that was approved by the IRS. Accordingly,

- 43 [*43] petitioner has failed to prove that he was exempt from self-employment tax

during the years in issue.

1 to the amounts of

We find that petitioner had self-employment income equa

fo 2002-05 as found in this opinion, and we hold

his Schedule C gross receipts r

that petitioner is liable for self-employment tax with respect to these amounts. We

sustain respondent's determination of self-employment tax for 2006.

Petitioner contends that he was not obligated to file returns for the years m

issue because he did not have sufficient income. _S_eee sec. 6012(a)(1)(A)(iv).

i idual who is entitled to make a joint

Under section 6012(a)(1)(A)(iv), an ind v

when combined with the gross income of his

return and whose gross income,

spouse, exceeds the sum of twice the exemption amount and the standard

fil Federal income tax return. As

deduction applicable to a joint return, must e a

32-36 we firid that petitioner had unreported

discussed in Part III, Lee sjip_La pp.

income of $32,799, $50,201, $83,743, $126,689, and $48,859, for 2002, 2003,

2004, 2005, and 2006, respective1y. Petitioner's income for.the years in issue

exceeded the described threshold and, consequently, petitioner had an obligation

to file Federal income tax returNs for those years.

- 44 [*44] VI.

Fraudulent Failure To File Returns

Section 6651(f) imposes an addition to tax of up to 75% of the amount of

tax required to be shown on the return in the case of a taxpayer's fraudulent failure

to file a tax return. To prove that a taxpayer is liable för the penalty, the

Commissioner must prove by clear and convincing evidence that (1) an

underpayment of tax exists, and (2) some part of the underpayment is due to fraud.

Sec. 7454(a); Rule 142(b); Clayton v. Commissioner, 102 T.C. at 646. If the

Commissioner proves that any part of an underpayment is attributable to fraud,

then the entire underpayment shall be treated as attribtitable to fraud unless the

taxpayer shows by a preponderance of the evidence that a part was not so

attributable. See, e.g., sec. 6663(b).

Underpayment of Tax

The Commissioner cannot rely upon the taxpayer's failure to meet the

burden of proof on the issue of the existence of a deficiency to sustain the burden

of proving the existence of an underpayment by clear and convincing evidence.

See Parks v. Commissioner, 94 T.C. 654, 660-661 (1990); Otsuki v.

Commissioner, 53 T.C. 96, 106 (1969). However, the Commissioner need only

show that there is some underpayment for each of the years in issue. See

Langworthy v. Commissioner, T.C. Memo. 1998-218. Furthermore, when

-45 [*45] allegations of fraud are intertwined with unreported and indirectly

reconstructed income, the Commissioner may prove the existence of an

underpayment by proving a likely source of income or disproving nontaxable

sources alleged by the taxpayer. See Parks v. Commissioner, 94 T.C. at 661.

As noted supra pp. 36, 41 petitioner failed to report income of $32,799, $50,201,

$83,743, $126,689, and $48,859 for 2002, 2003, 2004, 2005, and 2006,

respectively, and failed to report a capital gain of $114,667 for 2004. In proving

the existence of petitioner's underpayments, respondent does not rely solely on

petitioner's failure to meet his burden of proof. Respondent appropriately

reconstructed petitioner's taxable ine'ome using the bank deposits method, and the

reconstruction demonstrates clearly and coiivincingly that petitioner had an

underpayment of tax for each of the years in issue. Furthermore, respondent has

proven a likely source of petitioner's unreported income, namely, petitioner's

construction, carpentry, and rental activities. Accordingly, respondent has proven

by clear and convincing evidence that petitioner underpaid his Federal income tax

for each of the years in issue.

Fraudulent Intent

1. .

.·

Introduction

If fraud is determined for multiple taxable years, the Commissioner's

burden "applies separately for each of the years." Temple v. Commissioner, T.C.

.- 46 [*46] Memo. 2000-337, slip op. at 24-25, aff'd, 62 Fed. ppx. 605 (6th Cir.

2003). The Commissioner satisfies this burden by showing that "the taxpayer

intended to evade taxes known to be owing by conduct i tended to conceal,

mislead or otherwise prevent the collection of taxes." D Leo v. Commissioner, 96

T.C. at 874. Fraud "does not include negligence, carelessness, misunderstanding

or unintentional understatement of income." United St es v. Pechenik, 236 F.2d

844, 846 (3d Cir. 1956).

. The existence of fraud is a question of fact to be r solved upon

consideration of the entire record: See DiLeo v. Commi sioner, 96 T.C. at 874.

Fraud is never presumed and must be established by ind pendent evidence of

fraudulent intent.. See Baumgardner v. Commissioner, 2 1 F.2d 311, 322 (9th Cir.

1957), aff'g T.C.-Memo. 1956-112. Fraud may be shown by circumstantial

evidence because direct evidence of the taxpayer's fraudulent intent is seldom . ·

available. See Petzoldt v. Commissioner, 92 T.C. at 69 ; Gajewski v.

Commissioher, 67 T.C. 181, 199-200 (1976), aff'd with ut published opinion, 578

F.2d 1383 (8th Cir. 1978). The taxpayer's entire course of conduct may establish the requisite fraudulent intent. See Stone v. Commissioner, 56 T.C. 213, 223-224

(1971). Any conduct likely to mislead or conceal may onstitute an affirmative act

of evasion, see Spies v. United States, 317 U.S. 492, 499 (1943), and an intent to

- 47 [*47] niislead may be inferred from a pattern of such conduct, see Webb v.

Commissioner, 394 F.2d 366, 379 (5th Cir. 1968), aff'g T.C. Memo. 1966-81.

However, fraud is not proven when a court is left with only a suspicion of fraud,

and even a strong suspicion is not sufficient to establish a taxpayer's liability for

the fraud penalty. See Olinger v. Commissioner, 234 F.2d 823, 824 (5th Cir.

1956), aff'g in part, rev'g in part on another ground T.C. Memo. 1955-9; Davis v.

Commissioner, 184 F.2d 86, 87 (10th Cir. 1950); Green v. Commissioner, 66 T.C.

538, 550 (1976).

Badges of Fraud

Because it is difficult to prove fraudulent intent by direct evidence, the

Commissioner may establish fraud by circumstantial evidence, which includes

various "badges of fraud" (hereinafter, factors) on which the courts often rely. See

Bradford v. Commissioner, 796 F.2d 303, 307 (9th Cir. 1986), gff g T.C. Memo.

1984-601; DiLeo v. Commissioner; 96 T.C. at 875. These factors focus on

whether the taxpayer engaged in certain conduct that is indicative of fraudulent

intent, such as: (1) understating income; (2) failing to maintain adequate records;

(3) offering implausible or inconsistent explanations; (4) concealing income or

assets; (5) failing to cooperate with tax authorities; (6) engaging in illegal

activities; (7) providing incomplete or misleading information to the taxpayer's tax

- 48 [*48] return preparer; (8) offering false or incredible testimony; (9) filing false

documents, including filing false income tax returns; (1 ) failing to file tax

returns; and (11) engaging in extensive dealings in cash.?' See Bradford v.

Commissioner, 796 F.2d at 307-308; Parks v. Commissioner, 94 T.C. 654, 664665 (1990); Recklitis v. Commissioner, 91 T.C. 874, 910 (1988); Lipsitz v.

Commissioner, 21 T.C. 917 (1954), aff'd, 220 F.2d 871 (4th Cir. 1955); see also

Morse v. Commissioner, T.C. Memo. 2003-332, slip op. at 8-9, aff'd, 419 F.3d

829 (8th Cir. 2005). The existence of any one factor is not dispositive, but the

existence of several factors is persuasive circumstantial evidence of fraud. See

Niedringhaus v. Commissioner, 99 T.C. 202, 211 (1992); Petzoldt v.

Commissioner, 92 T.C. at 700.

Respondent contends, and our review of the recor shows, that the

following factors are present in this case: (1) petitioner underreported his income

for the years in issue; (2) petitioner concealed income and assets during the years

in issue; (3) petitioner failed to cooperate with tax authorities regarding the years

in issue; (4) petitioner filed false documents; and (5) petitioner failed to file tax

returns for the years in issue. Respondent also contends that petitioner's reliance

29These factors are nonexclusive. See Niedringhaus v. Commissioner, 99

T.C. 202, 211 (1992).

- 49 [*49] on frivolous arguments during these proceedings demonstrates his

fraudulent intent. We analyze each factor below.

Understating Income

A pattern of substantially underreporting income for several years is strong

evidence of fraud, particularly if the reason for the understatements is not

satisfactorily explained or is not due to innocent mistake. See Holland v. United

States, 348 U.S. 121, 137-139 (1954); Spies, 317 U.S. at 499; Webb v.

Commissioner, 394 F.2d at 379; see also Green v. Commissioner, T.C. Memo.

2010-109 (finding that a satisfactory explanation may weigh against a finding of

fraud). The U.S. Court of Appeals for the Eleventh Circuit has stated that "a

'[c]onsistent and substantial understatement of income is by itself strong evidence

of fraud.'" Korecky v. Commissioner, 781 F.2d 1566, 1568 (11th Cir. 1986)

(quoting Merritt v. Commissioner, 301 F.2d 484, 487 (5th Cir. 1962), af_g T.C.

Memo. 1959-172), aLf'g T.C. Memo. 1985-63.

Petitioner failed to file Federal income tax returns for the five years in issue.

He thus failed to report income of $32,799, $50,201, $83,743, $126,689, and

$48,859 for 2002, 2003, 2004, 2005, and 2006, respectively, and a capital gain of

$114,667 for 2004.

- 50 [*50] Although not entirely clear, petitioner's contention appears to be that he

underreported his income because he believed all of his neome was attributable

to his alleged ministry. In the light of the other evidence in the record, we are not

prepared to find that petitioner simply was mistaken regarding his personal

obligation to file income tax returns and report income. Furthermore, as this Court

has stated, a taxpayer's "mistaken contention indicates liktle about whether

* * * [the taxpayer] had fraudulent intent." Chambers v. Commissioner, slip op. at

35.

Petitioner did not report any income for the years in issue. Given the

substantial amounts of petitioner's unreported income, his pattern of

underreporting his income, and his lack of a satisfactory explanation for the

understatements, we conclude that petitioner's understatþments are persuasive

evidence of fraudulent intent. See, e.g., Morse v. Commissioner, 419 F.3d at 832;

see also Lain v. Commissioner, T.C. Memo. 2012-99, slip op. at 12.

Concealing Assets or Income

An intent to evade tax may be inferred by "concealment of assets or

covering up sources of income". Spies, 317 U.S. at 499; Ruark v. Commissioner,

449 F.2d 311, 312-313 (9th Cir. 1971), aff'a T.C. Memo. 1969-48. A taxpayer's

- 51 [*51] use of "a complex series of financial transactions and nominees is a badge of

fraud." Plotkin v. Commissioner, T.C. Memo. 2011-260, slip op. at 43. This

Court has previously held that a taxpayer's use of a UBTO to conceal income

supports a finding of fraud. Simmons v. Commissioner, T.C. Memo. 2009-283,

slip op. at 10-11. The mere existence of a paper trail documenting a taxpayer's

income or expenses does not negate a finding of fraudulent intent. See Evans v.

Commissioner, T.C. Memo. 2010-199, slip op. at 16-17.

Petitioner concealed his assets through a series of transactions designed to

transfer his assets to various organizations, including Treasures in a Field

Investments, a UBTO. Petitioner later transferred his assets from Treasures in a

Field Investments to a ministerial trust, Treasures in a Field. Despite these

transfers, petitioner continued to control the use and disposition of his assets.

Furthermore, petitioner deposited all of his income into accounts titled in the name

of Prepare the Way Ministries and Treasures in a Field Investments.

Petitioner appears to contend that he did not conceal assets because he

deposited all proceeds into ministry bank accounts and recorded all properties that

the ministry owned. First, this Court notes that the mere existence of a paper trail

documenting the transfer of assets does not negate a finding of fraud. Second,

petitioner's contention is refuted by the evidence showing that petitioner engaged

- 52 [*52] in a series of transactions the purpose o

f which w s tax avoidance.

Accordingly, this factor supports a finding of fraud.

Failure to cooperate with revenue agents during n investigation is a badge

781 F.2d at 1568; L

of fraud. S_ee K

525 F.2d 741, 747-748 (9th Cir. 1975),

. .

(1973);

60 T.C. 199

T C 1 20 (198). This failure is

, 75 . . ,

persuasive evidence of a taxpayer s gui Ity knowledge S_eee P

. .

T C 888 932-933 (1982). A taxpayer's failure to cooperate

CJ, 79 . .

d the Court during the pretrial and trial proceedings also

with the Commissioner an

supports a finding of fraud. S_ee

, 91 T.C. 1049, 1052,

1059-1060 (1988), a_fffM, 926 F.2d 1470 (6th Cir. 19Ól); Ri

T.C. Memo. 2003-208, slip op. at 15.

Petitioner failed to cooperate with respondent's revenue agent during

respondent's investigation of petitioner. Accordin ly, respondent was forced to

. .

bank account records to reconstruct petitioner's

subpoena petitioner s mmistry

income. Petitioner also failed to respond to a summons issued by respondent.

In addition, petitioner failed to cooperate w h respondent's counsel and

1 Pet tioner failed to cooperate with

with the Court in preparing this case for tria .

- 53 .

ti ulation of facts as required by our

[*53} respondent's counsel m preparing a s p

standing pretrial order. He failed to respond properly to respondent's requests for

admissions. At trial petitioner failed to respond to the questions posed by

respondent's counsel, continuing to assert an unidentified privilege. Accordingly,

we find that petitioner failed to cooperate with tax authorities, and this finding

supports a finding of fraud.

Fraudulent intent may be inferred when a taxpayer files a document

intending to conceal, mislead, or prevent the collection of tax. S_ee Spjigs, 317 U.S.

at 499. Filing false documents with the IRS constitutes "an 'affirmative act' of

misrepresentation sufficient to justify the fraud penalty." Z

763 F.2d 1139, 1146 (10th Cir. 1985), aff'g T.C. Memo. 1984-152; see_alsg E_mig.

99, T.C. Memo. 2010-237, slip op. at 9. A taxpayer's creation of

false documents, s_ee F

, T.C. Memo. 2005-129, slip op. at

24-25, and/or use of a false EIN, s_ee

, slip op. at 39,

supports a finding of fraud, s_e_e_a_lsg V

, T.C. Memo. 2000-

128.

Petitioner used a false EIN when he opened account 2952 at Regions Bank.

He also prepared a materially altered and false Form W-8BEN. Petitioner

- 54 [*54] stipulated that he used the materially altered and false Form W-8BEN to

hold out his purported ministry as a tax-exempt entity. We find that he engaged in

false documents to e ade the payment of

this practice of creating and using

1 this factor supports a findiÅg of fraud.

Federal tax. Consequent y,

A taxpayer's failure to file tax returns is a

bad e of fraud. Sg P_j:t_pl_1L

. .

T C at 701. While a failure to file returns, even over an

Cogggs_sjoner, 92 . .

extended period, does not establish fraud per se, g GæsdutfEL

. .

T C at 19 an extended pattern of failing to file returns may be

Cogngusgner, 75 . .

persuasive circumstantial evidence of fraud, 9 M

, 544

F.2d 883, 885 (5th Cir. 1977), aff'g T.C. Memo. 19 5-368.

2002-06 Petitioner's extended pattern of

Petitioner failed to file returns for

failing to file returns constitutes persuasive circumstantial evidence of fraud.

A taxpayer's assertion of frivolous argument may provide evidence

supporting a finding of fraud. See K

1261 (1986); W

. .

, 86 T.C. 1253, 1259-

, T.C. Memo. 2012-219, slip op. at 19;

, s 1 ip op. at 14; D

2011-185, slip op. at 21-22.

, T.C. Memo.

- 55 f these proceedings, petitioner repeatedly raised

[*55] During the course o

The U.S. Court of Appeals for the Eleventh

frivolous and groundless arguments.

to be frivolous and without merit. S_ee U_nt_ed

Circuit has held similar arguments

959 (11th Cir. 2011) (táxpayers' argument

, 419 Fed. Appx. 958,

lved in a "trade or business" was frivolous); U__n_i_ted Stajøi

that they were not invo

, 532 F.3d 1130, 1132-1133 (11th Cir. 2008) (taxpayer's assertion that the

IRS had no power over the taxpayer was meritless). We repeatedly cautioned

petitioner against asserting frivolous and groundless arguments. Despite these

d to assert such arguments. Accordingly, this

admonishments, petitioner continue

factor supports a finding of fraud.

C. 042 Conclus9n

lear and convincing evidence that petitioner

Respondent has proven y c

underpaid his tax liabilities for 2002-06 anÊ that some part 'of petitioner's

underpayment for each year was

due to fraud. Petitioner has not argued or

introduced any credible evidence to prove that any p

ortion of his underpayments

was not attributable to fraud. He has not introduced any credible evidence to show

- 56 [*56] that he acted without fraudulent intent. According}y, we hold that petitioner

is liable for the section 6651(f) fraudulent failure to file additions to tax.3°

VII. Sections 6651(a)(2) and 6654(a_)_Mdltions hLa2

If the taxpayer assigns error to the Commissioner s determination that a

taxpayer is liable for an addition to tax, the Commissioner has the burden, under

t to the liability of the taxpayer

section 7491(c), of producing evidence with respec

for the addition to tax. Sen H_igbee v. Commissio_n_er, 116 T . C . at 446-447. To

meet his burden of production, the Commissioner must come forward with

sufficient evidence that it is appropriate to impose the addition to tax. Id. Once

the Commissioner meets his burden, the taxpayer must come forward with

evidence sufficient to persuade this Court that the det rmination is incorrect. I_i

Respondent determined that petitioner is liable under section 6651(a)(2) for

additions to tax for failure to timely pay tax shown on a return. Section 6651(a)(2)

imposes an addition to tax for failure to pay the amo nt of tax shown on a

taxpayer's Federal income tax return on or before the payment due date, unless

such failure is due to reasonable cause and is not due to willful neglect. The

section 6651(a)(2) addition to tax applies only when)an amount of tax is shown on

30The amounts of the sec. 6651(f) additions to tax for 20 2-05 m

adjusted to reflect the adjustments to gross receipts ca

- 57 [*57] a return filed by the taxpayer or prepared by the Secretary. Sec. 6651(a)(2),

. .

(g)(2);

C 163 170 (2003). When a taxpayer has

, 120 T. .

not filed a return, the section 6651(a)(2) addition to tax may not be imposed unless

the Secretary has prepared an SFR that satisfies the requirements of section

6020(b). Se_e

, 127 T.C. 200, 210 (2006), aff'd, 521 F.3d

1289 (10th Cir. 2008).

Respondent satisfied his burden of production by introducing into evidence

SFRs for the years in issue that satisfy the requirements of section 6020(b).

Consequently, petitioner had the burden of introducing evidence to show that his

failure to pay was due to reasonable cause. He did not do so. Petitioner did not

advance any argument regarding the section 6651(a)(2) additions to tax and

introduced no credible evidence to show reasonable cause for his failure to pay tax

shown on the returns. Accordingly, we sustain respondent's determination with

respect to petitioner's liability for the additions to tax under section 6651(a)(2) for

the years in issue."

Respondent also determined that petitioner is liable for additions to tax for

failure to pay estimated tax under section 6654. Section 6654 imposes an addition

"The amounts of the sec. 6651(a)(2) additions toc

adjusted to reflect the adjustments to gross receipts ca

ted in th s opi io be

- 58 [*58] to tax on an individual who underpays his estimated tax." The addition to

tax is calculated with reference to four required installm nt payments of the

taxpayer's estimated tax liability. Sec. 6654(c) and (d). Each required installment

of estimated tax is equal to 25% of the "required annual payment". Sec. 6654(d).

In general, the "required annual payment" is equal to the lesser of (1)90% of the

tax shown on the individual's return for that year (or, if no return is filed, 90% of

his tax for such year), or (2) if the individual filed a retuip for the immediately

preceding taxable year, 100% of the tax shown on that return. Sec. 6654(d)(1)(A),

(B), and (C). A taxpayer has an obligation to pay estimated tax only if he has a

"required annual payment". Wheeler v. Commissioner, 127 T.C. at 212; see also

Mendes v. Commissioner, 121 T.C. 308, 324 (2003).

Petitioner did not make any estimated tax payments for the years in issue.

Respondent introduced deemed stipulations that petitiorier failed to file returns for

2002-06. On the basis of this information and the evidence with respect to

petitioner's income for the years in issue, we are able to conclude that petitioner

had required annual payments for 2003-06. However, we are unable to conclude

"Unless a statutory exception applies, the sec. 66 4(a) addition to tax is

mandatory. See sec. 6654(a), (e); Recklitis v. Commissioner, 91 T.C. 874, 913

(1988).

- 59 [*59] that petitioner had a required annual payment for 2002 because respondent

failed to introduce any evidence as to whether petitioner filed a return for 2001.

See Wheeler v. Commissioner, 127 T.C. at 211-212. Accordingly, we reject

respondent's determination as to the section 6654(a) addition to tax for 2002 and

sustain respondent's determinations as to petitioner's liability for the section

6654(a) additions to tax for 2003-06.

VIII. Section 6673 Penalty

Section 6673(a)(1) provides that this Court may require the taxpayer to pay

a penalty not in excess of $25,000 whenever it appears to this Court that: (1) the

proceedings were instituted or maintained by the taxpayer primarily for delay, (2)

the taxpayer's position is frivolous or groundless, or (3) the taxpayer unreasonably

failed to pursue available administrative remedies. A taxpayer's position is

frivolous or groundless if it is "'contrary to established law and unsupported by a

reasoned, colorable argument for change in the law.'" Williams v. Commissioner,

114 T.C. 136, 144 (2000) (quoting Coleman v. Commissioner, 791 F.2d 68, 71

(7th Cir. 1986)).

"The amounts of the sec. 6654 additions to tax for 2003-05 must be

adjusted to reflect the adjustments to gross receipts calculated in this opinion.

- 60 [*60] During the pretrial proceedings this Court warned petitioner that if he

continued to assert frivolous or groundless positions, this Court would consider

imposing a penalty under section 6673. This Court issued the warning to

petitioner in three different orders before trial. At trial this Court again warned

petitioner that if he continued to assert frivolous or groundless positions, this

Court would consider imposing a penalty under section 6673. Despite this

warning, petitioner asserted the same arguments in his posttrial brief.

Respondent did not request that we impose a penalty pursuant to section

6673, and in the exercise of our discretion we will not i¼pose a section 6673

penalty on petitioner. However, we warn petitioner thatl if in the future he

maintains groundless positions in this Court, he runs the risk that he will be

sanctioned in accordance with section 6673(a)(1).

We have considered the parties' remaining arguments, and to the extent not

discussed above, conclude those arguments are irrelevant, moot, or without merit.

To reflect the foregoing,

Decision will be entered under

Rule 155.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.