In Uncategorized on 01/24/2018 at 16:50

Going to the mat doesn’t help James S. Plato, 2018 T. C. Memo. 7, filed 1/24/18, but IRS’ fumbles still save him some money. Plato, separated from Mrs. Plato (first name not stated), left the prepared tax return for year at issue, and check for payment of tax thereon shown “under the mat at the front door” of his wife’s residence, and told Mrs. Plato to mail same to IRS, 2018 T. C. Memo. 7, at p. 3. Plato also subsequently told Mrs. Plato to file for an extension.

IRS got none of the above, and no evidence was presented that the check was cashed. Plato filed Form 1040 MFS after audit, SFR and SNOD, and paid the amount shown on the belated (eight-year-old) 1040. IRS processed that, and stiped to the amount thereon as basis for the add-ons, like late filing, late payment and insufficient withholding.

Those are the only open issues.

Excusing late filing by agent has been a nonstarter since US v.Boyle, 469 U.S. 241 (1985). Each must bear his own burdens, as a much more exalted authority has stated. So Plato gets hit for that add-on.

Nonpayment of tax shown on return here is based on the SFR, and Section 6020(b), which sets forth the requirements for proper subscription thereof. IRS blows that one.

Judge Paris: “The Court has held that the requirements of section 6020(b) have been met where an SFR consists of Form 4549, Income Tax Examination Changes; Form 886-A, Explanation of Items; and Form 13496, IRC Section 6020(b) Certification.

“Respondent entered into evidence a Form 3623, Statement of Account, a Form 4549, and a Form 886-A.  The Form 3623 has the docket number for petitioner’s case typed at the top of the form.  Thus, the Form 3623 was not a part of the SFR prepared before petitioner filed a petition with the Court and was issued a docket number for his case.  The Forms 4549 and 886-A are both dated ‘12/15/2015’ and contain calculations based on petitioner’s separate return.  There is no Form 13496 in the record.  Respondent has failed to meet his burden of production with respect to the appropriateness of imposing the section 6651(a)(2) addition to tax.  Therefore, the determination in the notice of deficiency of the addition to tax for failure to pay the tax shown on the return is not sustained.” 2018 T. C. Memo. 7, at p. 9 (Citations omitted).

Oh, and the SFR itself never got into evidence.

IRS does no better with failure to pay estimateds. Plato and Mrs. Plato reside in The Lone Star State, home of the most fabulous sister acts going (my daughters and my granddaughters), and also home of community property. Besides, the Platos filed jointly the year before the year at issue. Remember, Plato hisself filed MFS in the year at issue, triggering the Reg. 1.6654-2(e) special rule when marrieds go from J to S or vice versa, to compute 100% of prior year or 90% of present year’s tax to see if withholding was too low.

“An IRS account transcript for the [prior year] joint return was entered into evidence.  The transcript shows that petitioner and his spouse reported adjusted gross income of $74,717 and tax per the return of $5,144….  Although there were withholding payments of $7,458 made in [year at issue], community property law in the State of petitioner’s residence requires that amount to be allocated when the married spouses chose to file separately.  No information was entered into evidence that allocated the adjusted gross income and tax per return for [prior year] between petitioner and his spouse.  Therefore, the Court cannot complete its analysis to decide petitioner’s required annual payment under section 6654(d)(1)(B) for [year at issue] because, although it can calculate 90% of petitioner’s tax for [year at issue] under clause (i), it cannot identify the number equal to 100% of the tax shown on petitioner’s [prior year] return under clause (ii). Respondent has failed to carry his burden of production; thus, the addition to tax for failure to pay estimated tax for [year at issue] is not sustained.” 2018 T. C. Memo. 7, at pp. 11-12 (Footnote and citation omitted).


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