Bregin v. Comm'r of Internal Revenue , Docket No. 4178-78.
| Decision Date | 25 August 1980 |
| Docket Number | Docket No. 4178-78. |
| Citation | 74 T.C. 1097 |
| Parties | ROBERT BREGIN, PETITIONER v. COMMISSIONER of INTERNAL REVENUE, RESPONDENT |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
On his 1974 return, P claimed a credit under sec. 31, I.R.C. 1954, for taxes withheld on his wages in excess of the amounts shown on the attached W-2 forms. However, in processing his return, the IRS overlooked such discrepancy and allowed a refund on the basis of the credit claimed by him. In a notice of deficiency, the Commissioner determined that P had received unreported income in 1974, but such notice included no allegation that P had claimed an excessive credit under sec. 31. Shortly before trial, the Commissioner filed a motion to amend his answer to include a claim based on the allegation that the credit taken by P was excessive. Held, P had unreported income during 1974 in the amount determined by the Commissioner. Held, further, this Court is without jurisdiction under secs. 6214(a) and 6213(b)(2)(A), I.R.C. 1954, to consider the Commissioner's claim for the amount erroneously refunded to P. Robert Bregin, pro se.
William E. Bogner, for the respondent.
The Commissioner determined a deficiency of $73 in the petitioner's Federal income tax for 1974. The issues for decision are: (1) Whether the petitioner received unreported wages in the amount of $320 during the year in issue; and (2) whether this Court has jurisdiction to consider the Commissioner's claim for an amount erroneously refunded to the petitioner because he overstated the credit for taxes withheld on his wages.
Some of the facts have been stipulated, and those facts are so found.
The petitioner, Robert Bregin, resided in Evergreen Park, Ill., at the time he filed the petition in this case. He filed an individual Federal income tax return for 1974 with the Internal Revenue Service.
During 1974, the petitioner was employed by Rainer Obst at European Car Service. He received three different Wage and Tax Statements, Forms W-2, from Mr. Obst for such year, which contained the following information:
+------------------------------------+
¦ ¦ ¦Federal income ¦
+---------+---------+----------------¦
¦ ¦Wages ¦tax withheld ¦
+---------+---------+----------------¦
¦ ¦ ¦ ¦
+---------+---------+----------------¦
¦W-2 No. 1¦$1,426.13¦$200.52 ¦
+---------+---------+----------------¦
¦W-2 No. 2¦4,820.00 ¦434.53 ¦
+---------+---------+----------------¦
¦W-2 No. 3¦4,820.00 ¦744.95 ¦
+------------------------------------+
The petitioner made several requests for a W-2 from Mr. Obst before receiving W-2 No. 1. The petitioner did receive W-2 No. 1 before he filed his 1974 income tax return, and he attached such W-2 to his return. He received W-2 No. 2 in July 1975 and W-2 No. 3 in August 1975. The petitioner maintained no record showing the total amount of wages he received during 1974 from Mr. Obst, nor the total amount of taxes withheld thereon.
The petitioner also worked for Demetrios Papageorgiou at Bridgeview Texaco during 1974. The W-2 the petitioner received from Mr. Papageorgiou showed wages of $550 and Federal income tax withheld of $84.20. The petitioner attached such W-2 to his 1974 return.
The petitioner was also employed by Goodyear Tire & Rubber Co. (Goodyear) during 1974. The W-2 that he received from that company showed wages of $1,996.54 and Federal income tax withheld of $338.02 for 1974. The petitioner attached the W-2 from Goodyear to his 1974 return.
When the petitioner prepared his 1974 Federal income tax return, he used the information contained on the W-2s received from Mr. Papageorgiou and Goodyear to calculate his wages and taxes withheld thereon, but he did not use the information on the W-2 from Mr. Obst since he believed such information to be incorrect. Thus, he estimated the amount of wages received from Mr. Obst and the taxes withheld thereon and calculated his total wages and taxes withheld for the year in issue in the following manner:
+----------------------------------------------------------+
¦Employer ¦Wages ¦Taxes withheld ¦
+-------------------------------+---------+----------------¦
¦ ¦ ¦ ¦
+-------------------------------+---------+----------------¦
¦Rainer Obst ¦$4,500.00¦$1,500.00 ¦
+-------------------------------+---------+----------------¦
¦Demetrios Papageorgiou ¦550.00 ¦84.20 ¦
+-------------------------------+---------+----------------¦
¦Goodyear ¦1,996.54 ¦338.02 ¦
+-------------------------------+---------+----------------¦
¦Amounts reported on 1974 return¦7,046.54 ¦1,922.22 ¦
+----------------------------------------------------------+
When the petitioner filed his return for 1974 on March 5, 1975, he also submitted an Employee's Substitute Wage and Tax Statement (Form 4852) with the return. On such form, he stated that Mr. Obst was his employer and reported gross wages of $4,500, and $1,500 as the amount of Federal income tax withheld. The petitioner also stated on such form:
When I confronted him with the fact that my W-2 was wrong, he tried to settle for 457.58—-which I took but he still refuses to pay the rest. * * * $1,500.00 is the closest possible figure which would include all federal, state, & soc. security taxes he did withhold. In the time I worked, he kept saying that almost 1;3 of my salary was taxes & that's what he withheld.
The petitioner reported no other income on his 1974 return. Using the tax table for single filing status and taking one exemption, he determined that his 1974 Federal income tax was $895 on adjusted gross income of $7,046.54. He believed that he should subtract the amount which he had collected from Mr. Obst from the total taxes which he had reported as withheld on his wages. Therefore, he calculated the amount of his refund as follows:
+--------------------------------------------------+
¦Total Federal income tax withheld ¦$1,922.22¦
+----------------------------------------+---------¦
¦Less: “Amount I have collected from him”¦457.58 ¦
+----------------------------------------+---------¦
¦Subtotal ¦1,464.64 ¦
+----------------------------------------+---------¦
¦Less: Income tax from table ¦895.00 ¦
+----------------------------------------+---------¦
¦Amount to be refunded ¦569.64 ¦
+--------------------------------------------------+
When the IRS processed the petitioner's 1974 return, it overlooked the amount which he had subtracted from the total taxes withheld on wages and recomputed his refund as follows:
+----------------------------------------------------------------+
¦Total Federal income tax claimed to have been withheld¦$1,922.22¦
+------------------------------------------------------+---------¦
¦Less: Income tax from table ¦895.00 ¦
+------------------------------------------------------+---------¦
¦Subtotal ¦1,027.22 ¦
+------------------------------------------------------+---------¦
¦Plus: 1974 tax rebate ¦100.00 ¦
+------------------------------------------------------+---------¦
¦Total amount refunded ¦1,127.22 ¦
+----------------------------------------------------------------+
In his notice of deficiency issued on January 24, 1978, the Commissioner determined that the petitioner received $4,820 of wages from Mr. Obst during 1974 and that, therefore, he had unreported wages of $320. Such determination resulted in a deficiency of $73.
On April 16, 1979, the Commissioner filed a motion for leave to file an amendment to his answer for the purpose of setting forth a claim for an increase in the deficiency in the amount of $755.05. He contends that the $1,500 listed by the petitioner as the amount withheld from his wages by Mr. Obst during 1974 was erroneous and that the correct amount withheld by Mr. Obst was $744.95. Thus, the Commissioner computed the correct total amount withheld on wages to be $1,167.17. The Commissioner computed the increased deficiency as follows:
+-----------------------------------------------------+
¦Deficiency in notice ¦ ¦$73.00¦
+------------------------------------+---------+------¦
¦Tax withheld listed on return ¦$1,922.22¦ ¦
+------------------------------------+---------+------¦
¦Less: Corrected tax withheld ¦1,167.17 ¦755.05¦
+------------------------------------+---------+------¦
¦Total deficiency due from petitioner¦ ¦828.05¦
+-----------------------------------------------------+
OPINION
The first issue is whether the petitioner received unreported wages in the amount of $320 from Mr. Obst during the year in issue. The burden is on the petitioner to prove that the Commissioner's determination is erroneous. Rule 142(a), Tax Court Rules of Practice and Procedure; Welch v. Helvering, 290 U.S. 111 (1933).
The first W-2 that the petitioner received from Mr. Obst stated that the petitioner's wages for 1974 were $1,426.13. Although he attached this form to his 1974 tax return, he did not use the amount in computing his gross income; instead, he estimated that his income from Mr. Obst was $4,500, and he used this figure in calculating his total wages for the year in issue. The Commissioner maintains that the correct amount of wages received by the petitioner from Mr. Obst was $4,820. His determination is based on the second and third W-2 statements which Mr. Obst sent to the petitioner. Both forms show that the petitioner received wages of $4,820.
It is evident from the petitioner's course of conduct that he himself realized that the amount reported by Mr. Obst on the first W-2 was in error. That is undoubtedly the...
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