No, not the texting version of the 1963 Beach Boys “Surfer Girl” hit (ma foi, is it really 52 years?). This is the story of a MIA SFR for attorney and counselor at law Jaynelle K. Bell, 2015 T. C. Memo. 101, filed 6/1/15, and it’s the kind of thing that makes me cringe to recount.

Jaynelle didn’t file for a couple years (hi, Judge Holmes), although she sent IRS a hefty check and a letter of explanation.

It seems two of her law partners were ripping off their firm and filing false income tax returns to cover their misdoings. May it not happen to any of us!

Jaynelle, fearful of filing false returns, filed no returns, but sent IRS money.

Finally, for the year at issue, after some back-and-forth crediting of payments, Jaynelle claims she filed timely (but not certified mail).

IRS claims they got nothing, and further claims they gave Jaynelle a SFR, but no SFR makes it into the record.

Jaynelle filed a 1040X years later when she got wind that IRS was claiming they never got her return.

The issues here are the Section 6651(a)(1) and (2) chops for failure to timely file and failure to pay. IRS has burden of proof on penalties, but wins on both.

Jaynelle didn’t timely file, and she didn’t credit a previous year’s overpayment to the year at issue, getting a refund instead, so IRS wins on the failure to timely file.

But what is the sum upon which the chop for failure to timely pay is computed, the SFR that never got into the record or the 1040X that Jaynelle filed years later?

Judge Buch: “The addition to tax for failure to timely pay differs from the addition to tax for failure to timely file in that the addition for failure to timely pay is calculated on the ‘amount shown as tax on such return’, instead of the ‘amount required to be shown as tax on such return’. The notice of deficiency is based on the … return Ms. Bell filed [late]…. That return shows an amount due of $1,633. However, the addition to tax for failure to timely pay appears to have been calculated by factoring in respondent’s adjustments in the notice of deficiency. This is not appropriate according to the statute. Under section 6651(g), a return prepared by the Secretary under section 6020(b), commonly known as a substitute for return, may be treated as the return filed by the taxpayer when determining the addition to tax for failure to timely pay. Respondent did not introduce a substitute for return into the record. Therefore, respondent has met his burden for the addition to tax for failure to timely pay only to the extent of the net amount due as shown on Ms. Bell’s [late-filed] return….” 2015 T. C. Memo. 101, at pp. 10-11. (Footnotes and citations omitted).

Rule 155 recount to follow.

Takeaway– “Amount shown” and “amount required to be shown” aren’t the same. Scrutinize those chops.