Oliver v. Commissioner
| Decision Date | 03 November 1993 |
| Docket Number | Docket No. 381-90. |
| Citation | 66 T.C.M. 1192 |
| Parties | George Joseph Oliver v. Commissioner. |
| Court | U.S. Tax Court |
Michael Louis Minns and Helena C. Papadopoulos, 10200 Old Katy Rd., Houston, Tex., for the petitioner. Abbey B. Garber, for the respondent.
Memorandum Findings of Fact and Opinion
This case was submitted to the Court on the stipulations of the parties.1 Respondent determined the following deficiencies in, and additions to, petitioner's Federal income tax:
Additions to Tax
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Section Section Section Section Section Section
Year Deficiency 6653(b)2 6653(b)(1) 6653(b)(1)(A) 6653(b)(2) 6653(b)(1)(B) 6654
-- $ 392
1981 5,569 2,785 -- -- -- -- 427
1983 2,316 -- 1,158 -- * -- 142
1984 21,487 -- 10,744 -- * -- 1,351
1985 24,894 -- 12,447 -- * -- 1,427
1986 29,327 -- -- 21,995 -- * 1,419
* 50 percent of the interest due on the portion of the underpayment attributable to fraud. Respondent determined that the
entire underpayment for each of the years at issue was due to fraud
As an alternative to the additions to tax for fraud for each of the years at issue, respondent determined that petitioner is liable for the additions to tax for failure to file and for negligence under sections 6651(a) and 6653(a), respectively, for each such year.
The issues for decision are:
(1) Is petitioner liable for the additions to tax for fraud for each of the years at issue? We hold that he is.3
(2) Is petitioner liable for the addition to tax for failure to pay estimated tax for each of the years at issue? We hold that he is.
The facts that have been stipulated are so found. Petitioner, George Joseph Oliver, was a resident of Florissant, Missouri, at the time of the filing of the petition herein.
Petitioner and Delores Oliver (Ms. Oliver) were married in June 1956. They permanently separated in July 1984 and were granted a divorce in November 1986. The divorce became final in December 1987.
Petitioner earned three years of college credit towards a mechanical engineering degree and worked as an engineer for at least 10 years. Petitioner owned and managed various rental homes during the years at issue.
Petitioner and Ms. Oliver filed a joint Federal income tax return for each of the years 1965 through 1979. Their returns were audited for the years 1973, 1974, 1976, 1977, and 1979. Prior to the mailing of the notices of deficiency dated October 30, 1989, petitioner had not filed Federal income tax returns for any of the years 1980 through 1986. Thereafter, on February 6, 1991, well after the petition was filed in this case, petitioner sent signed copies, dated on different days in January 1991, of individual Federal income tax returns for each of the years 1980 through 1989 (January 1991 returns) to respondent's Office of District Counsel in Dallas, Texas. The January 1991 returns for the years at issue (namely, 1980, 1981, and 1983 through 1986) show that petitioner had significant amounts of gross income and taxable income and that petitioner had an income tax liability for each of those years.
Petitioner had income tax withheld for each of the years 1965 through 1979. Starting with the year 1980, petitioner filed Forms W-4 with his employers on which he claimed that he was exempt from having income tax withheld for each of the years at issue. For each of those years, no tax was withheld for petitioner, and petitioner made no estimated tax payments.
Between 1979 and 1983, petitioner told various people, including a special agent with the Internal Revenue Service (Service) Criminal Investigation Division, that he was not going to pay any taxes because taxes were unconstitutional.
Petitioner donated money to, and purchased literature from, Belanco, a tax protest organization which advocated noncompliance with the income tax laws.
In August 1987, petitioner was tried in the United States District Court for the Northern District of Texas on two counts of willful failure to file a return under section 7203 for each of the years 1980 and 1981. He was acquitted by a jury.
The parties stipulated that, for the years 1980 through 1986, petitioner and/or Ms. Oliver had the following income, expenses, and losses:4
1980 1981 1982 1983 1984 1985 1986
Wages of petitioner .......... $43,568 $25,596 $ -- $ 5,449 $63,224 $67,929 $72,439
Interest income of petitioner
and Ms. Oliver.............. 234 183 -- 14 -- -- --
Unemployment compensation
of petitioner .............. -- 3,264 3,874 -- -- 945 --
Schedule C net income of Ms
petitioner ................. -- 14,150 -- -- -- -- --
Schedule C net income of Ms
Oliver ..................... -- -- -- 589 3,803 5,202 7,675
Short-term capital gain of
petitioner and Ms. Oliver .. -- -- -- 4,353 -- -- --
Long-term capital gain of
petitioner and Ms. Oliver .. -- -- -- 33,852 -- -- 22,079
Net rental income (loss) of
petitioner and Ms. Oliver .. 879 (1,810) 2,684 (3,851) (6,889) (5,481) 1,107
Earned retirement income of
petitioner ................. -- -- -- -- -- 124 --
Net employee business expenses
of petitioner .............. 4,038 332 -- 0 0 0 0
Schedule A expenses of
petitioner ................. 8,309 10,541 -- 12,744 10,527 8,922 5,423
Opinion
The parties agree that the items of income, expense, and loss to which they stipulated and which we have found as facts do not reflect any community property division which might apply. In her opening brief, respondent sets forth her position, including her contentions as to the applicability of Texas community property law, on the extent to which (1) petitioner's gross income includes those stipulated items of income and (2) petitioner is entitled to deduct those stipulated expenses and losses. In his answering brief, petitioner states:
The vast majority of Respondent's brief concentrates on proving the deficiencies and negligence alleged by the Commissioner, arguments which the Petitioner has not challenged. (Tax Court Trial Transcript p. 14, 1. 5-8.) Consequently, in the interest of preserving time and resources, Petitioner will not address those portions of the Respondent's brief. In fact, the Petitioner's acceptance of the deficiency, except the portion due to fraud, is compelling evidence that he never intended to defraud the government and is willing to accept responsibility for his legitimate tax debt.* * *
Thus, petitioner concedes the deficiencies resulting from respondent's position in her opening brief, including her position on the applicability of Texas community property law, with respect to the extent to which (1) petitioner's gross income includes the stipulated amounts of income and (2) petitioner is entitled to deduct the stipulated amounts of expense and loss. Therefore, the only real dispute between the parties is whether petitioner is liable for the additions to tax for fraud for each of the years at issue.5 We now turn to that issue.
Before considering whether petitioner is liable for the additions to tax for fraud, we address the parties' disagreement over the weight the Court should give to the transcript (the transcript) of petitioner's trial (criminal trial) on two counts of violating section 7203 by willfully failing to file income tax returns for 1980 and 1981. Petitioner was acquitted by a jury.
It is respondent's position that the Court has discretion in deciding the weight to afford the testimony given by petitioner and the other witnesses at the criminal trial and that we are not required to accept petitioner's self-serving testimony at that trial. Although not altogether clear, it appears that it is petitioner's position that, by submitting the transcript into evidence and by not calling any witnesses, respondent is attempting to turn this Court into a forum for appellate review of the jury's verdict of acquittal in the criminal trial. We agree with respondent's position.
Preliminarily, we note that we are not presented with a situation where we have been asked to decide whether to admit the transcript of the criminal trial into evidence. A copy of the criminal transcript was offered by both parties and received by the Court into evidence as a stipulated exhibit. The only question for us involves the weight to accord the testimony at petitioner's criminal trial.
The stipulation of facts states in part the following with respect to stipulated exhibits:
The truth of assertions within stipulated exhibits is not necessarily agreed to and may be rebutted or corroborated by additional evidence. * * *
Thus, we are not bound by any testimony at the criminal trial that appears in the transcript. However, it is significant that petitioner's counsel (Michael Louis Minns) at the criminal trial involving charges of willfully failing to file returns for 1980 and 1981 also represented him in the instant proceeding involving additions to tax for fraud for 1980, 1981, and 1983 through 1986. Moreover, the witnesses at the...
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