Pekrul v. Commissioner, Docket No. 20472-91.

• Court: United States Tax Court
• Writing for the Court: Dawson
• Citation: 64 T.C.M. 453
• Parties: Merton W. Pekrul and Linda L. Pekrul v. Commissioner.
• Docket Number: Docket No. 20472-91.
• Decision Date: 11 August 1992

64 T.C.M. 453 T.C. Memo. 1992-455 Merton W. Pekrul and Linda L. Pekrul
v.
Commissioner. Docket No. 20472-91. United States Tax Court. Filed August 11, 1992.

Merton W. Pekrul, pro se. Stephen S. Ash, for the respondent.

Memorandum Opinion

DAWSON, Judge:

This case was assigned to Special Trial Judge Stanley J. Goldberg pursuant to section 7443A(b)(4) and Rules 180, 181, and 183.¹ The Court agrees with and adopts the opinion of the Special Trial Judge, which is set forth below.

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Notes:

1. All section references are to the Internal Revenue Code in effect for the years in issue. All Rule references are to the Tax Court Rules of Practice and Procedure.

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Opinion of the Special Trial Judge

GOLDBERG, Special Trial Judge:

This case is before the Court on respondent's Motion to Dismiss For Failure to State a Claim upon which relief can be granted. The motion was calendared for hearing in Phoenix, Arizona, on March 9, 1992. When this case was called from the calendar, counsel for respondent appeared and was heard. Petitioner Merton W. Pekrul appeared and was heard. There was no appearance by petitioner Linda L. Pekrul.

In a notice of deficiency mailed to petitioner Merton W. Pekrul on June 6, 1991, respondent determined the following deficiencies in and additions to his Federal income taxes:

 Additions to Tax
                 Sec. Sec. Sec. Sec.
                Year Deficiency 6651(a)(1) 6653(a)(1) 6653(a)(2) 6654(a)
                1984 ............................. $4,507 $1,127 $225 1 $284
                1985 ............................. 7,492 1,873 375 1 429
                1988 ............................. 5,047 1,262 252 -- 322
                1 50 percent of the interest due on the underpayment of tax attributable to negligence or intentional disregard of
                rules or regulations.
                

64 T.C.M. 454

Also on June 6, 1991, respondent mailed a notice of deficiency to petitioner Linda L. Pekrul, determining the following deficiencies in and additions to her Federal income taxes:

 Additions to Tax
                 Sec. Sec. Sec. Sec.
                Year Deficiency 6651(a)(1) 6653(a)(1) 6653(a)(2) 6654(a)
                1984 ............................ $1,397 $349 $ 70 1 $ 87
                1985 ............................ 2,819 705 141 1 162
                1988 ............................ 3,672 918 184 -- 234
                1 50 percent of the interest due on the underpayment of tax attributable to negligence or intentional disregard of
                rules or regulations.
                

In both notices of deficiency, respondent determined that petitioners, married individuals domiciled in Arizona, a community property State, failed to file Federal income tax returns for 1984, 1985, and 1988, and did not report community property income earned in the following amounts for those years:

Source 1984 1985 1988
                Mass. Indemnity & Life Ins. Co. ............................. $15,594 $6,929 $ --
                First American National
                Securities, Inc. ............................................ 11,929 1,264 --
                Trinity Foundation .......................................... 8,333
                Shell Mining Ltd. ........................................... -- 31,455 --
                Eastside Christian Schools .................................. -- -- 5,408
                Family Bible Church ......................................... -- -- 17,660
                Family Bible Church ......................................... -- -- 12,500
                 _______ _______ _______
                 Total Community Income ................................. $27,523 $39,648 $43,901
                 ======= ======= =======
                 ½ of Community Income ........................... $13,761 $19,824 $21,950
                 ======= ======= =======
                

Respondent further determined that each petitioner was liable for self-employment taxes. In arriving at the deficiency for each taxable year, respondent subtracted from total income the applicable amount for exemptions and standard deductions. Since petitioners did not file returns, respondent computed the income tax deficiencies using the tax tables for married persons filing separately. Respondent then computed self-employment tax on income subject to this tax and the additions to tax set forth above.

Petitioners mailed a letter to the Court which we filed as a petition on September 9, 1991. By Order dated September 11, 1991, we directed petitioners to file, on or before November 12, 1991, a proper amended petition, and pay the $60 filing fee. Petitioners filed their Amended Petition on November 21, 1991. At the time petitioners filed their petition, they resided in Mesa, Arizona. In their Amended Petition, petitioners contend that respondent erred as follows:

(a). Error in failing to make a determination that the Petitioners are liable to the income tax imposed by the Code before issuing the Notice of Deficiency.

(b). Error in issuing a Notice of Deficiency without making a written determination that a deficiency exists.

(c). Error in imposing and assessing penalties against the Petitioners for negligence and failing to file in violation of the Administrative Procedures Act of 1946, 5 USC § 551 et. seq.

(d). Error in imposing and assessing penalties against the Petitioners for negligence and failing to file in violation of § 3512 of the Paperwork Reduction Act of 1980, 44 USC § 3501 et. seq.

The purported facts upon which petitioners rely can be summarized as follows: (a) Although born in Ingham County, Michigan, petitioner Merton Pekrul was born "without" the United States; (b) although petitioners are both Americans by birth and permanently reside in Maricopa County, Arizona, they are not citizens or residents of the United States or the State of Arizona;...