MEMORANDUM FINDINGS OF FACT AND OPINION
HAINES,
After concessions, 2 the issues for decision are:
(1) Whether the period of limitations for assessment of the deficiency and addition to tax has expired. We hold that it has not; and
(2) whether petitioner is liable for an addition to tax under
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The stipulation of facts, the exhibits attached thereto, and the stipulation of settled issues are incorporated herein by this reference. At the time he filed his petition, petitioner resided in California.
At the time of trial petitioner was 55 years old. He has a long history of alcoholism and drug addiction. During the 1980s petitioner made numerous attempts at sobriety, meeting with mixed and ultimately disappointing results. During one period of sobriety in 1985 he obtained his contractor's license. In 1994 petitioner began a 45-day period of heavy drinking and drug abuse that culminated in his entering a rehabilitation hospital. For the next 5 years he was able to stay relatively sober.
At some point not disclosed in the record, petitioner opened his own construction business, Hazel Construction, Inc. By 2008 Tax Ct. Memo LEXIS 134">*136 the late 1990s Hazel Construction had grown to include approximately 25 employees. In 1998 or 1999 petitioner again began to drink a little bit. By 1999 or 2000 he was drinking heavily and using cocaine. Petitioner stopped drinking and using drugs on June 3, 2002, after being arrested and charged with assault on a police officer and being drunk in public. Petitioner spent between 12 and 18 hours in jail as a result of the charges.
During 2001 petitioner received $ 845,000 of income from his construction company. Petitioner and his wife timely requested and were granted an extension of time to file their 2001 return. The return was due on or before August 15, 2002. Respondent has no record of petitioner's submitting a 2001 return before August 23, 2007. On that date petitioner submitted a joint 2001 tax return to respondent, reporting total tax of $ 289,066, a withholding credit of $ 36,265, and tax due of $ 252,801. The return was signed by petitioner and his wife on August 17, 2007, and by his return preparer on August 20, 2007. Petitioner remitted the tax due with his return. The return was submitted and the tax was paid during the pendency of this case and 2008 Tax Ct. Memo LEXIS 134">*137 more than a year after the notice of deficiency was mailed. The payment of tax after the mailing of the notice of deficiency does not deprive the Court of jurisdiction over the deficiency suit.
Petitioner argues that respondent is barred from assessing his 2001 tax because the 3-year period of limitations under
Petitioner contends he timely filed his 2001 return at some point on or before August 15, 2002. Petitioner testified 2008 Tax Ct. Memo LEXIS 134">*138 that his accountant badgered him to file the return. He testified that he brought the return home for signature, brought it back to his office, put the postage on it, and mailed it. Petitioner also testified that he was incapacitated during the period he filed his return by alcoholism, addiction, withdrawal, and type 2 diabetes. Despite this alleged incapacitation, petitioner contends that he filed his return during "a moment of lucidity."
Petitioner offered no evidence to corroborate his testimony that he timely filed his return or that he was incapacitated. He did not present a certified mail receipt or copy of the return allegedly filed in 2002. He did not present the testimony of his accountant who prepared the return or the testimony of his wife who would have signed the purported joint return. Similarly, he did not present the testimony of his wife, family, or employees, or any documentary evidence such as medical records which would indicate petitioner was incapacitated.
The Court finds petitioner's testimony that he suffered from a long history of alcohol and drug abuse credible. However, with respect to the filing of the return and his incapacity during the relevant period, 2008 Tax Ct. Memo LEXIS 134">*139 petitioner's testimony was contradictory, general, conclusory, and self-serving. Under the circumstances, we are not required to accept his testimony, and we do not. See
As evidence that petitioner failed to file his 2001 return, respondent introduced Form 4340, Certificate of Assessments, Payments, and Other Specified Matters, which bears no entry indicating a timely return was filed for 2001. 42008 Tax Ct. Memo LEXIS 134">*140 This Court has found that a Form 4340 which bears no entry of a filed return is evidence that a return was not filed. See, e.g.,
Petitioner argues that a Form 4340 does not show whether a return has been filed. Petitioner directs the Court to the title of the form and to the certifying statement, which states: I certify that the foregoing transcript of the taxpayer named above in respect 2008 Tax Ct. Memo LEXIS 134">*141 to the taxes specified is a true and complete transcript for the period stated, and all assessments, abatements, credits, refunds, and advance or unidentified payments, and the assessed balance relating thereto, as disclosed by the records of this office as of the account status date are shown therein. I further certify that the other specified matters set forth in this transcript appear in the official records of the Internal Revenue Service.
A Form 4340 is a literal transcript containing tax data from an Internal Revenue Service (IRS) master file associated with a particular taxpayer. See
The first entry on petitioner's 2001 Form 4340 is "Substitute for Return". Respondent conceded during preparation for trial that the SFR was procedurally deficient because it was not signed by respondent's agent. Nevertheless, the IRS master file and thus the Form 4340 were opened by the preparation of the SFR in 2006, and there is no entry indicating petitioner filed a timely return.
On the preponderance of the evidence, the Court finds that petitioner did not file a timely return for 2001.
A 2008 Tax Ct. Memo LEXIS 134">*143 taxpayer may have reasonable cause for failure to timely file a return where the taxpayer experiences an illness or incapacity that prevents the taxpayer from filing the return.
In support of his contention that he lacked the capacity to file his return, petitioner cites
Petitioner's attempt to analogize his failure to file his return to the failure to file the 1983 return in
Furthermore, despite any incapacity petitioner may have suffered, the record indicates he was able 2008 Tax Ct. Memo LEXIS 134">*145 to continue his business affairs. During 2002, the period in which petitioner would have timely filed his return, petitioner's adjusted gross income was $ 162,024.
In sum, petitioner has provided no credible evidence that he was incapacitated during the time the return should have been filed. During that time he was able to continue his business affairs and thus did not have reasonable cause for the failure to timely file his return. See
We have considered all of the contentions and arguments of the parties that are not discussed herein, and we find them to be without merit, irrelevant, and/or moot.
To reflect the foregoing and the concessions of the parties,
1. Unless otherwise indicated, section references are to the Internal Revenue Code, as amended. Unless otherwise indicated, Rule references are to the Tax Court Rules of Practice and Procedure. Amounts are rounded to the nearest dollar.↩
2. The parties have stipulated that petitioner's deficiency is $ 289,066. Respondent concedes that petitioner is not liable for additions to tax under
3. In the notice of deficiency, respondent reduced the amount of the
4. Petitioner argues that the Court erred in admitting the Form 4340 into evidence. Petitioner contends that the Form 4340 does not satisfy
Petitioner also argues that the Form 4340 is inadmissible under
