Cox v. Commissioner, Docket No. 10861-78.
| Decision Date | 09 July 1980 |
| Docket Number | Docket No. 10861-78. |
| Citation | 40 TCM (CCH) 619,1980 TC Memo 244 |
| Parties | Almeda Cox v. Commissioner. |
| Court | U.S. Tax Court |
Almeda Cox, pro se. Diane L. Fox, for the respondent.
Memorandum Findings of Fact and Opinion
Respondent determined deficiencies of $1,022.61 and $869.02 in petitioner's Federal income taxes for taxable years 1972 and 1973,1 respectively, as set forth in his statutory notice of deficiency dated June 26, 1978. Due to the absence of concessions by the parties in this matter and due to the broad sweep of petitioner's request for deficiency redetermination set forth in her petition2 in this case, many issues are presented for our decision: (1) whether petitioner is entitled to a net operating loss carryback from 1975 to 1972 in an amount greater than $64.26 which entails (a) whether respondent's method of income reconstruction which found petitioner's gross income understated by $3,532.69 was proper, (b) whether petitioner was entitled to a depreciation deduction on a piano, and (c) whether petitioner properly applied the carryback of the net operating loss; (2) whether petitioner is entitled to a net operating loss carryback from 1976 to 1973; (3) whether petitioner was entitled to a trial by jury in this case; and (4) whether petitioner is entitled to payment of witness costs or other costs of pursuing this court action.
Petitioner was a resident of Ossian, Indiana at all times relevant to this case. She timely filed her joint Federal income tax returns, with her husband, for the taxable years 1972, 1973, 1975 and 1976 with the Internal Revenue Service Center in Memphis, Tennessee. During those years, petitioner operated as a sole proprietorship a florist shop in Ossian known as Echo Gardens Florist.
Petitioner's Federal income tax returns for 1975 and 1976 contained the following figures:
_________________________________________________________________________________________________
1975 1976
_________________________________________________________________________________________________
Form 1040—line 11Interest Income ............................ $ 142.47 $ 218.89
line 32(b)—Fully taxable pensions and annuities ... 8,631.00
Schedule A—Itemized deductions .............................. 520.61
Schedule C—Profit or (Loss) From Business or Profession...... 7,106.99 (4,000.92)
Schedule E—Supplemental Income
Part I—Pensions and Annuities.............................. 2,955.60
Part III—Income or (Loss) From Estates, etc................ (1,209.33)
Schedule F—Farm Income and Expenses.......................... 154.44
_________________________________________________________________________________________________
Three personal exemptions, including one for petitioner's blindness, were claimed correctly in calculating taxable incomes for 1975 and 1976 on each of the returns. Petitioner also included these three personal exemptions in calculating the net operating loss carryback from 1975 to 1972. Included in the business loss shown on Schedule C of petitioner's 1975 return was a $400.00 depreciation deduction claimed on a piano acquired in 1973 for $1,245.00 on which prior years' depreciation deductions of $800.00 had been taken.
On January 26, 1976, petitioner filed Form 1045, Application for Tentative Refund, requesting a net operating loss carryback deduction to 1972 from 1975 in the amount of $6,625.09. This amount was a direct application of the final negative figure for taxable income on petitioner's 1975 return. Petitioner received a payment of $1,034.63 plus $88.74 interest on March 1, 1976, as a result of filing the Form 1045. Another Form 1045 was filed on August 8, 1977, requesting a net operating loss carryback deduction to 1973 from 1976 in the amount of $5,210.25. This figure was the sum of petitioner's business loss for 1976 and a loss distributed to petitioner from an estate in 1976. On September 26, 1977, as a result of filing the second Form 1045, petitioner received a payment of $869.02 plus $42.72 interest.
In 1977, the Internal Revenue Service (IRS) began an audit of petitioner's Federal income tax returns for the years 1972, 1973, 1975 and 1976. Examination of the 1976 return showed that petitioner did have a business loss of $4,000.92 and a loss from an estate of $1.209.33 which totaled $5,210.25, the amount of net operating loss carried back to 1973 by petitioner. However, review of the entire return showed that petitioner's income exceeded her deductions for 1976. Therefore, although no deficiency resulted for 1976, respondent did determine that petitioner was not entitled to the carryback to 1973 claimed, resulting in the contested deficiency for 1973.
The examination of petitioner's 1975 return was not as simple. In that examination, the IRS employed the sources and applications of funds method of reconstructing income, finding that petitioner had understated income for 1975 in the amount of $3,532.69.3 Further, respondent disallowed the $400.00 depreciation deduction for the piano, mentioned above. The respondent also excluded from the calculation of the claimed net operating loss carryback from 1975 to 1972 the three personal exemptions for 1975 ($2,250.00) and excess nonbusiness deductions for 1975 ($378.14). These adjustments, as determined by respondent, reduced the applied net operating loss carryback from 1975 to 1972 from $6,625.09 to $64.26, resulting in determinations of no deficiency for 1975 and the contested deficiency for 1972.
Petitioner and her husband had unreported income in the amount of $3,532.69 during the 1975 taxable year.
OpinionBefore we deal with the proper issues in this case, we find it necessary to comment upon petitioner's conduct throughout the entire history of the matter before us. From the start of the examination of the returns in question to the present, petitioner has badgered Senators, Congressmen, the employees of the IRS and the employees of this Court with her repeated demands for attention and service, often in matters irrelevant or immaterial to the determination of her tax liability for the years under examination. Because of her demands and her handicap of blindness, petitioner has received more attention and deference than the average taxpayer should expect. Indeed, most, if not all, of respondent's doubts confronted during his examination were resolved in petitioner's favor. Meanwhile, petitioner has refused to reciprocate with the same courtesy which she so obstinately demands for herself. She has failed to meet with respondent in a cooperative atmosphere, with the result that this Court is faced with a number of issues which could have been settled. Further, without cooperation between the parties, no stipulation of facts was reached as required by Rule 91, Tax Court Rules of Practice and Procedure.
We are convinced that, due to petitioner's unwillingness to listen to and to work with respondent's employees, petitioner has totally failed to grasp the legal mechanics of the situation with which she is faced. Petitioner decided to represent herself, without benefit of legal counsel. This decision cannot be used against her, but neither can it be used for her. Petitioner's decision to appear pro se does not relieve her of any of the burdens or responsibilities of the law or of the rules of this Court. Coussement v. Commissioner 68-1 USTC ¶ 9272, 391 F. 2d 227 (C.A. 6, 1968), affirming a Memorandum Opinion of this Court; Wallis v. Commissioner, 66-1 USTC ¶ 9312, 357 F. 2d 313 (C.A. 10, 1966), affirming a Memorandum Opinion of this Court; Rushing v. Commissioner 54-2 USTC ¶ 9463, 214 F. 2d 383 (C.A. 5, 1954), affirming a Memorandum Opinion of this Court. She must suffer, without relief, the consequences of her choice.
Petitioner's refusal to cooperate led to her misunderstanding of the task before her. Her incessant ramblings at trial prevented this Court from extending any guidance or assistance to her. Time and time again, petitioner ignored the Court's request at trial for factual evidence and insisted upon presenting a repetitious litany of derogatory personal comments and criminal accusations directed at various employees of the IRS. This repetitious tirade was continued throughout her post-trial documents, which were received and filed as her Brief and Reply Brief, even though they contained little or no substance relative to the issues of this case. This Court is not the proper forum for any criminal accusations which petitioner may have against respondent4 and no court should be used for the staging of such malicious attacks against the reputations of individuals, whatever their positions in life. Perhaps, if petitioner had used her energies and abilities constructively in the presentation of her case, she would have fared better. She did not. We have no choice but to deal with her case as she has presented it to us.
The first issue for our decision is the size of petitioner's net operating carryback loss deduction in 1972 from 1975. Petitioner claimed a deduction of $6,625.09. Respondent, in three adjustments, determined that the deduction should be no more than $64.26. We agree with respondent.
Respondent's first adjustment, in lowering petitioner's net operating loss carryback deduction for 1972, was a determination that petitioner had understated income for 1975 by $3,532.69. To make this determination, respondent used the sources and applications of funds method of reconstructing income. This method is just what its name implies. First, the revenue agent calculates the difference, if any, between total reported funds sources, such as gross receipts, interest income, new or increased loans and decreases in cash and bank accounts, and...
To continue reading
Request your trial