1959 Tax Ct. Memo LEXIS 24">*24 1. Petitioners had adjusted gross income in the amount of $20,164.39 for the year 1953 and reported that amount of income on their joint return for that year. They filed no declaration of estimated tax for 1953 and paid no installments of estimated tax. The Commissioner determined an addition to tax under
2. As stated under headnote (1) above, petitioners filed no declaration of estimated tax for 1953. Held, the Commissioner was without legal authority to determine additions to tax under
Memorandum Findings of Fact and Opinion
The Commissioner has determined deficiencies in additions to tax,
Additions to Tax | |||
Sec. 294 | Sec. 294 | ||
Year | Tax | (d)(2) | (d)(1)(A) |
1953 | None | $267.27 | $400.90 |
Petitioners contest this determination of the Commissioner by appropriate assignments of error.
Findings of Fact
Petitioners are husband and wife with residence at Beachwood, New Jersey. They filed their joint individual income tax return for the year 1953 with the district director of internal revenue at Camden, New Jersey.
During the taxable year 1953 the petitioners were labor contractors and were partners in the lumber business, operating the Johnson1959 Tax Ct. Memo LEXIS 24">*26 Lumber Co. as a partnership.
The ordinary net income of the Johnson Lumber Co. for the taxable year 1953 was $11,095.08. Petitioners' distributive share of partnership income from the Johnson Lumber Co. for the taxable year 1953 was $5,547.54 each.
A net long-term capital gain in the amount of $11,332.66 was realized by the partnership during the taxable year 1953 from the sale of partnership assets. Petitioners' share of this net long-term gain realized by the partnership was $5,666.33 each.
James also received $2,240.37 income during the taxable year 1953 from the operation of a business as a labor contractor under the business name of James E. Johnson.
Susanna also received $1,162.57 income during the taxable year 1953 from the operation of a business as a labor contractor under the business name of Susanna E. Johnson.
A joint individual income tax return for the taxable year 1953 was filed by petitioners with the district director of internal revenue, Camden, New Jersey, on March 15, 1954, showing petitioners' adjusted gross income in the amount of $20,164.35 for the year 1953.
Petitioners failed to file a declaration of estimated tax for the taxable year 1953, and1959 Tax Ct. Memo LEXIS 24">*27 they failed to make any payment of estimated tax for said year.
Petitioners received income in the amount of $12,392.95 from the operation of their lumber business in the taxable year 1951 and for the year 1952 they received income in the amount of $18,171.88 from the operation of said business.
James filed a declaration of estimated tax for the taxable year 1952, reporting estimated income tax for that year of $400.
Petitioners were required to file a declaration of estimated tax for the taxable year 1953 and their failure to file such declaration of estimated tax was not due to reasonable cause.
Opinion
BLACK, Judge: Petitioners in their joint return reported all of their income for taxation and paid tax thereon. The Commissioner does not contend otherwise. The petitioners, however, filed no declaration of estimated tax and contend, among other things, that Congress was without any constitutional authority to enact a law compelling a taxpayer to file a declaration of estimated tax and impose addition to tax for failure to file such a declaration.
Petitioners were partners engaged in the operation of a lumber business. They were required to file a declaration of estimated1959 Tax Ct. Memo LEXIS 24">*28 tax for the year 1953 because their income for 1953 was greatly in excess of the amount of income which would require them to file a declaration of estimated tax. Petitioners could reasonably have expected such income because their income for the 2 years immediately prior to 1953 was also greatly in excess of the statutory requirement for filing a declaration of estimated tax.
James appeared for petitioners at the hearing of this proceeding. He has not filed any brief but his contentions made in an oral statement at the trial have been carefully considered.
Petitioners' first contention is that the addition to tax of $400.90 which the Commissioner has determined under
With respect to petitioners' contention that Congress was without constitutional power to compel petitioners to file a declaration of estimated tax and thus make a prophecy of income1959 Tax Ct. Memo LEXIS 24">*30 which they were to receive in 1953, that contention has been decided against petitioners in numerous cases. In
"Since petitioner makes no attempt to establish the statutory excuse, the Tax Court correctly applied the statute in sustaining imposition of the additions to tax under
We, therefore, hold1959 Tax Ct. Memo LEXIS 24">*31 against petitioners' contention that the provisions of the 1939 Code which compel a taxpayer to file a declaration of estimated tax are unconstitutional.
Petitioners next contend that there was reasonable cause for their failure to file a declaration of estimated tax for 1953. The burden of proof is on petitioners to show that their failure to file a declaration of estimated tax for 1953 was due to reasonable cause. It is clear that under our Findings of Fact petitioners have not proved any reasonable cause for failure to file a declaration of estimated tax for the year 1953. See
The Commissioner's determination of $400.90 addition to tax under
As has already been stated, the Commissioner in his deficiency notice also determined an addition to tax under
Petitioners assail the correctness of the Commissioner's determination of addition to tax under
In view of the Supreme Court's decision in
The respondent, in his brief, states:
"If the Court determines that an addition should be made to petitioners' 1953 income tax in an amount other than $668.17, decision should be entered under1959 Tax Ct. Memo LEXIS 24">*33 Rule 50."
As will be seen from a reading of our report herein, we have held that only an addition to tax of $400.90 under
Decision will be entered under Rule 50.