T.C. Memo. 2009-18



                      UNITED STATES TAX COURT



               DOLORES JEAN HALBIN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 5799-06.              Filed January 28, 2009.



     Dolores Jean Halbin, pro se.

     Charles M. Berlau, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     MARVEL, Judge:   In a notice of deficiency dated December 16,

2005, respondent determined that petitioner was liable for a

Federal income tax deficiency of $7,794 and additions to tax

pursuant to section 6651(a)(1) and (2)1 for 2004.   Petitioner


     1
      Unless otherwise provided, all section references are to
the Internal Revenue Code in effect for the year in issue and all
                                                   (continued...)
                               - 2 -

filed a timely petition seeking a redetermination of the

deficiency and the additions to tax.    After concessions, the

issues for decision are as follows:

     1.   Whether petitioner2 is entitled to claim a dependency

exemption deduction for her son for 2004; and

     2.   whether petitioner is liable for the additions to tax

under section 6651(a)(1) and (2).

                         FINDINGS OF FACT

     Some of the facts have been stipulated.    We incorporate the

stipulated facts into our findings by this reference.    Petitioner

resided with her husband, Gene E. Halbin (Mr. Halbin), on a 10-

acre farm in Missouri on the date her petition was filed.

     During 2004 petitioner worked as a school nurse at a school

located approximately 58 miles from her home, and before he got

too sick to work, Mr. Halbin worked in an HVAC (heating,

ventilating, and air conditioning) business that he was trying to

develop into a full-time business.     In addition, both petitioner

and Mr. Halbin performed various farm chores that included but

were not limited to raising honeybees and maintaining their


     1
      (...continued)
Rule references are to the Tax Court Rules of Practice and
Procedure.
     2
      Respondent has conceded that any income tax deficiency for
2004 will be calculated to reflect that petitioner and her
husband filed a joint Federal income tax return for 2004 after
the notice of deficiency was issued and that their correct filing
status for 2004 is married filing jointly.
                                - 3 -

hives, harvesting and selling honey, and raising crops and exotic

birds.

Dependency Exemption for Son

       Petitioner and Mr. Halbin have one son, Eric G. Halbin

(Eric).    On June 24, 2003, as he was leaving his parents’ farm,

Eric’s vehicle was hit head-on by a U.S. Postal Service mail

carrier who was driving down the wrong side of the road.      It took

approximately 3 hours for emergency personnel to extricate Eric

from his vehicle.    Eric suffered severe physical injuries

including but not limited to a fractured right knee, a severely

dislocated left hip, internal bleeding, and a head injury.

Eric’s hip was out of socket for 7-1/2 hours, leading to other

physical problems.    As a result of his injuries, Eric for some

time could not walk, drive, or work.

       When Eric was released from the hospital, he returned to his

home in Kansas, which he was in the process of buying.    Because

Eric had no income, however, he was unable to pay his basic

living expenses, including his utilities and mortgage payment.

Although petitioner and Mr. Halbin attempted to help Eric with

his expenses, they could not afford to keep making his payments.

Eric was finally forced to move to his parents’ home because he

could not afford to live by himself.3


       3
        By December 2003 utilities to Eric’s home had been turned
off.    In approximately September 2005 the financial institution
                                                     (continued...)
                                - 4 -

     Eric resided with his parents from December 2003 to sometime

in December 2006.    During 2004 Eric had no income and received no

government payments.    Petitioner and Mr. Halbin paid all of his

living expenses, including his grocery and medical expenses,4 and

they paid all of the housing costs for their home.

2004 Delinquent Return

     In addition to Eric’s accident in 2003, petitioner and Mr.

Halbin had to contend with other problems.    In 2003 Mr. Halbin

developed an illness that was not diagnosed correctly until 2004,

when he had surgery to remove his gall bladder.5   Until his

condition was finally diagnosed, Mr. Halbin thought that he was

dying of cancer.    At times Mr. Halbin was so sick that he could

not get out of bed.    Other times he was able to help petitioner

around the farm.    It fell on petitioner, who was still holding

down a full-time job, to care for both Mr. Halbin and Eric during

2004.

     During 2004 and 2005 petitioner and Mr. Halbin were also

undergoing an examination of their 2003 Federal income tax return

by the IRS.    On a date that does not appear in the record but was



     3
      (...continued)
holding Eric’s loan foreclosed on his home.
     4
      Petitioner did not receive any reimbursement for her son’s
medical expenses, and she did not claim the expenses on her tax
returns.
     5
        The surgery took place on Dec. 31, 2004.
                               - 5 -

probably sometime before August 22, 2005, petitioner and/or Mr.

Halbin spoke with the auditor about their various problems and

told the auditor that they needed more time to file their 2004

Federal income tax return.6   As the April 15, 2005, filing

deadline approached, petitioner obtained an extension form, but

she did not complete it or file it before April 15, 2005.

Neither petitioner nor Mr. Halbin filed a timely 2004 Federal

income tax return.   Petitioner testified that with all of the

problems7 she had in 2004 and 2005, she forgot about filing the

extension form and/or the 2004 Federal income tax return.

Delinquent 2004 Joint Return; Agreed Adjustments

     For reasons that do not appear in the record, the IRS

allegedly prepared and processed a substitute for return for

petitioner on or about August 22, 2005, only 4 months after the

filing deadline, and mailed a notice of deficiency for 2004 to


     6
      Mr. Halbin testified that during the course of his 30-year
marriage, except for 2004, he and petitioner filed timely joint
Federal income tax returns. Usually Mr. Halbin prepared the
joint returns, but for some years (e.g., 2000, 2002, and 2003) a
paid preparer did so. For 2004, however, petitioner and Mr.
Halbin did not hire a return preparer because they could not
afford to do so.
     7
      In July 2004 a new neighbor sprayed chemicals on the
neighbor’s property without warning petitioner. After the
spraying, petitioner’s honeybees and hives died. Petitioner
testified that she lost 20 hives, that each hive was worth $500,
and that each of the hives that was destroyed would have produced
60 pounds of honey. After Mr. Halbin became ill, petitioner and
Mr. Halbin lost a potential lavender crop because the lavender
seeds, which are very sensitive to temperature, were not planted
at the proper time.
                                - 6 -

petitioner on December 16, 2005.      Petitioner timely petitioned

this Court on March 22, 2006.

     On October 23, 2006, counsel for respondent received a joint

Federal income tax return for 2004 from petitioner and Mr. Halbin

dated October 18, 2006.    On February 16, 2007, counsel for

respondent received another joint Federal income tax return for

2004 dated February 7, 2007.    The parties have stipulated that

petitioner and Mr. Halbin had the following items of income for

2004:
                                                     1
     Wages                                            $52,190
     Income tax refund                                  1,772
     Income--HVAC/electric activity                     7,112
     Income-honey/lavender/bird activity                4,800
     1
      Federal income tax withholding on petitioner’s wage income
was $1,341.

The parties have also stipulated that respondent will recalculate

the 2004 deficiency using joint return rates, that he will allow

two personal exemptions (for petitioner and Mr. Halbin), and that

petitioner and Mr. Halbin may deduct the following expenses:

         Honey/lavender/exotic bird
           activity expenses                             $4,630.63
         HVAC/electric activity
           expenses                                       3,443.21
         Schedule A expenses:
           State & local taxes          $1,997.88
           Medical expenses              3,910.02
           Real estate taxes               719.37
           Personal property taxes         211.70
           Mortgage interest            11,343.00
                                - 7 -

                               OPINION

     Petitioner contends that she is entitled to a dependency

exemption deduction for her son, Eric, for 2004 and that she is

not liable for the section 6651(a)(1) and (2) additions to tax.

Petitioner does not contend that the burden of proof, which is

normally placed on the taxpayer pursuant to Rule 142, should be

shifted to respondent under section 7491(a), and she did not

introduce evidence to establish that the requirements of section

7491(a) have been satisfied.   Consequently, petitioner has the

burden of proof with respect to disputed factual matters.      Rule

142(a).

Dependency Exemption Deduction for Son

     Section 151(a) authorizes a taxpayer to deduct allowable

personal exemptions.   Section 151(c)(1) authorizes a taxpayer to

deduct a personal exemption for each qualifying dependent, as

defined in section 152, whose gross income for the relevant year

is less than the exemption amount.      Section 152(a) provides in

pertinent part that the term “dependent” means a son of the

taxpayer over half of whose support for the relevant year was

received from the taxpayer.

     In deciding whether an individual received over half of his

support from the taxpayer, we must take into account “the amount

of support received from the taxpayer as compared to the entire

amount of support which the individual received from all
                               - 8 -

sources”.   Sec. 1.152-1(a)(2)(i), Income Tax Regs.   A taxpayer

claiming a dependency exemption deduction must prove by competent

evidence the total amount of the dependent’s support from all

sources for the relevant year and must prove that the taxpayer

provided more than one-half of the dependent’s total support.

See Blanco v. Commissioner, 

, 514-515 (1971).

     During 2004 petitioner’s son, Eric, was 26 years old and

incapacitated from an automobile accident.   He resided during

2004 in his parents’ home.   Both petitioner and Mr. Halbin

testified credibly that they paid 100 percent of Eric’s expenses

during 2004, including his grocery and medical expenses, that

Eric could not and did not work during 2004, and that Eric had no

income or support from sources other than his parents.8    The

testimony establishes Eric’s total support from all sources and

proves that petitioner and her husband provided all of Eric’s

support during 2004.   We conclude on this record that petitioner

is entitled to a dependency exemption deduction for Eric.

Section 6651(a)(1) Addition to Tax

     Petitioner failed to file a timely 2004 Federal income tax

return.   Respondent determined that petitioner was liable for the



     8
      Respondent inquired of petitioner and Mr. Halbin whether
Eric received any payments from the State of Kansas during 2004,
but they denied having knowledge of any government payments to
Eric before 2006 when Eric’s disability claim was finally
resolved. Respondent did not introduce any evidence to refute
their testimony.
                                - 9 -

section 6651(a)(1) addition to tax because of petitioner’s

failure to file her 2004 Federal income tax return by the due

date.    Petitioner contends that she is not liable for the

addition to tax because she had reasonable cause for her failure

to file a timely 2004 return.    Petitioner argues that the many

personal problems with which she was dealing in 2004 and 2005

justified her failure to file her return by the April 15, 2005,

deadline.9

     Section 6651(a)(1) imposes an addition to tax for failure to

file a return in the amount of 5 percent of the tax required to

be shown on the return for each month during which such failure

continues, but not exceeding 25 percent in the aggregate, unless

it is shown that such failure is due to reasonable cause and not

due to willful neglect.    See United States v. Boyle, 

, 245 (1985).

     Although respondent has the initial burden of production

with respect to the section 6651 addition to tax, see sec.

7491(c), respondent satisfied that burden with evidence that

petitioner did not file a timely Federal income tax return for

2004, a fact that petitioner does not dispute.    Consequently,

petitioner must prove that she is not liable for the addition to




     9
      We did not require the parties to file posttrial briefs.
Our summary of petitioner’s arguments is derived from
petitioner’s testimony and arguments at trial.
                               - 10 -

tax.    Petitioner contends that she had reasonable cause for her

failure to file a timely 2004 Federal income tax return.

       The record is replete with evidence that petitioner

struggled throughout 2004 and 2005 with a panoply of serious

personal problems, including Mr. Halbin’s illness, surgery, and

recuperation, Eric’s injuries from his car accident, the

destruction of petitioner’s beehives, and the collapse of the

farm’s lavender crop.    Petitioner was the principal source of

income for her family during this difficult period, and after

very long workdays she had to summon the strength to deal with

the farm and the physical problems of her family members.

Although Mr. Halbin was able to assist in some ways during 2004

and 2005, his illness, which was undiagnosed for many months,

made it very difficult for him to provide reliable help for

petitioner.

       While we are very sympathetic to the difficult situation

petitioner endured, we cannot decide this issue on sympathy.

Rather, we must examine the facts in the record to decide whether

petitioner had reasonable cause for failing to file her return

within the meaning of section 6651(a).

       Section 301.6651-1(c)(1), Proced. & Admin. Regs., provides

that a taxpayer who claims that he or she had reasonable cause

for failing to file a return must make an affirmative showing of

all facts in support of that claim.     If the facts presented
                              - 11 -

demonstrate that the taxpayer exercised ordinary business care

and prudence and was nevertheless unable to file the return when

due, the delay is due to reasonable cause.

Mr. Halbin testified that they attempted

to contact the IRS regarding their belief that they needed more

time to file their 2004 Federal income tax return.   However, the

record does not establish when the call or calls were made or,

specifically, whether the calls were made before the return

filing deadline.   The record does establish that petitioner

obtained the form to request an automatic extension to file but

that she failed to complete and file the form before the return

filing deadline.   When asked why she did not file the request for

an automatic extension, petitioner testified that she forgot

about the filing deadline and that filing the 2004 return was not

on her radar.

     Petitioner held a full-time job throughout 2004 and into

2005.   She paid bills, did farm chores, and helped Mr. Halbin and

Eric with their physical challenges.   Both Mr. Halbin, who had

surgery in December 2004, and Eric, whose automobile accident

occurred in 2003, were recuperating and improving physically in

2005.   The record demonstrates that petitioner could function and

was functioning at several different levels in 2005.

Unfortunately for petitioner, the record also establishes that

even though she was aware of her return filing obligation, she
                               - 12 -

forgot to do what was necessary to deal with that filing

obligation before the filing deadline.

     The record does not support a conclusion that petitioner

exercised “ordinary business care and prudence” with regard to

her 2004 filing obligation.   See sec. 301.6651-1(c)(1), Proced. &

Admin. Regs.

     We hold that petitioner has not proven that she had

reasonable cause for her failure to file a timely 2004 Federal

income tax return.

Section 6651(a)(2) Addition to Tax

     Respondent also determined that petitioner was liable for

the addition to tax imposed by section 6651(a)(2) for failure to

pay the amount of tax shown on a return.   The addition to tax

under section 6651(a)(2) applies only when an amount of tax is

shown on a return.   Cabirac v. Commissioner, 

, 170

(2003).   Petitioner did not file a timely Federal income tax

return for 2004.10   Although we did not direct the parties to

file posttrial briefs, we assume for purposes of this analysis

that respondent based his determination that petitioner was



     10
      Although petitioner and her husband submitted two joint
Federal income tax returns to respondent for 2004, the documents
were submitted after respondent issued his notice of deficiency,
and they apparently were not treated as returns for purposes of
this case. In addition, neither document showed an unpaid
Federal income tax liability. Consequently, we analyze this
issue as if petitioner did not file a Federal income tax return
for 2004.
                                - 13 -

liable for the section 6651(a)(2) addition to tax on his

assertion that he made a substitute for return for 2004 under

section 6020(b) (SFR) that qualifies as a return for purposes of

section 6651(a)(2).

     An SFR is treated as a return filed by the taxpayer for

purposes of determining whether the section 6651(a)(2) addition

to tax applies.     Wheeler v. Commissioner, 

, 208-209

(2006), affd. 

(10th Cir. 2008).    However, the

claimed SFR must satisfy the requirements of section 6020(b).

see also Cabirac v. Commissioner, supra at 170-173.

     We have held that the Commissioner’s burden of production

under section 7491(c) with respect to the section 6651(a)(2)

addition to tax requires that the Commissioner introduce evidence

that a return showing an unpaid tax liability was filed for the

year in question.     See Wheeler v. Commissioner, supra at 210.     In

a case such as this where the Commissioner is relying upon an

alleged SFR to support his determination under section

6651(a)(2), the Commissioner must introduce evidence that an SFR

satisfying the requirements of section 6020(b) was made.    See

do so.    Although the record includes certain

deemed admissions under Rule 90(c) and various stipulations of

fact, neither the deemed admissions nor the stipulations

mentioned, much less established, that respondent made an SFR

meeting the requirements of section 6020(b) or that petitioner
                              - 14 -

filed a Federal income tax return for 2004 showing an unpaid tax

liability.   Because the record does not contain evidence that

petitioner failed to pay a tax shown on a Federal income tax

return for 2004, we conclude that respondent has not satisfied

his burden of production under section 7491(c) with respect to

the section 6651(a)(2) addition to tax.

     Because of our holding, we do not need to decide whether

petitioner had reasonable cause for any alleged failure to pay

tax within the meaning of section 6651(a)(2).

     To reflect the foregoing,


                                      Decision will be entered

                                 under Rule 155.