                      118 T.C. No. 9



                UNITED STATES TAX COURT



           GLORIA J. SPURLOCK, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 6438-01.                Filed February 15, 2002.



     Held: A sec. 6020(b), I.R.C., return made by R,
which shows an amount of tax, does not affect whether
there is a “deficiency” under sec. 6211(a), I.R.C.
Where P failed to file a return, the amount of tax
shown on a sec. 6020(b), I.R.C., return made by R is
subject to deficiency procedures, and R must follow
those procedures before he can make an assessment.
Millsap v. Commissioner, 91 T.C. 926 (1988).



Gloria J. Spurlock, pro se.

Frederick W. Krieg, for respondent.
                                - 2 -

                               OPINION


     RUWE, Judge:    This matter is before us on petitioner’s

motions for partial summary judgment under Rule 121.1   The issues

for decision are whether a section 6020(b) return prepared by

respondent is a “return” for purposes of section 6211(a), and

whether there can exist a “deficiency” with respect to tax

liabilities stated on a section 6020(b) return.    At the time of

filing the petition in this case, petitioner was a resident of

Louisville, Kentucky.

     Petitioner did not file Federal income tax returns for 1995,

1996, or 1997.   However, respondent prepared what he represents

as “substitutes for return” for each of those tax years.2    The

substitutes for return, upon which respondent relies, show a tax

liability of $2,747 for 1995, $5,082 for 1996, and $3,149 for

1997.    Respondent has not made any income tax assessments against

petitioner for the tax liabilities shown on those returns.

Respondent issued a notice of deficiency to petitioner on

February 20, 2001, in which he determined the following income

tax deficiencies and additions to tax:


     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the tax years in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
     2
      Respondent states that “The term ‘substitute for return’ is
a term used by Respondent for returns or partial returns prepared
by Respondent where the taxpayer did not file a return.”
                                    - 3 -
                                              Additions to tax
Year          Deficiency       Sec. 6651(a)(1)   Sec. 6651(a)(2)   Sec. 6654

1995           $2,747             $533.75            N/A           $112.10
1996            5,082            1,125.68      To be determined.    265.81
1997            3,149              539.55      To be determined.    123.81

       Under Rule 121(a), either party may move for summary

judgment upon all or part of the legal issues involved in the

case.      We shall grant a motion for partial summary judgment where

there is no genuine issue as to any material fact relevant to the

issues involved.        Rule 121(b); Sundstrand Corp. v. Commissioner,

98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994).             The

moving party has the burden of proving that no genuine issue of

material fact exists and that he is entitled to judgment as a

matter of law.       FPL Group, Inc. & Subs. v. Commissioner, 116 T.C.

73, 74-75 (2001).

       Under section 6020(b)(1), respondent has the authority to

execute a return “If any person fails to make any return required

by any internal revenue law or regulation made thereunder at the

time prescribed therefor, or makes, willfully or otherwise, a

false or fraudulent return”.        Section 6020(b)(2) provides that

“Any return so made and subscribed by the Secretary shall be

prima facie good and sufficient for all legal purposes.”3

       On the basis of the language contained in section

6020(b)(2), petitioner argues that returns prepared by respondent


       3
      Both parties agree that respondent filed sec. 6020(b)
returns for the years in issue; however, we do not decide whether
those “returns” meet the requirements of sec. 6020(b).
                               - 4 -

are treated in the same manner as if the taxpayer had filed those

returns.   Under section 6211(a), the term “deficiency” is

generally defined as the amount of tax imposed less the amount

shown as the tax by the taxpayer upon his return.   See Laing v.

United States, 423 U.S. 161, 173 (1976).   Petitioner contends

that “Neither an amount of tax shown upon a return made by

Respondent, nor an amount of tax shown upon a return filed by a

taxpayer, falls within the definition of the term ‘deficiency.’”

Petitioner argues that since the amounts stated as tax liabilties

in the substitutes for return are equal to the amounts determined

by respondent in the notice of deficiency, there is no

“deficiency” under section 6211(a).

     Respondent, on the other hand, contends that section 6211(a)

refers to an “amount shown as tax by the taxpayer upon his

return” and that petitioner did not file returns in this case.

Respondent argues that when a section 6020(b) return is prepared,

it is considered a return filed by the taxpayer for the purpose

of calculating the section 6651(a)(2) addition to tax pursuant to

section 6651(g)(2).4   However, respondent contends that a section

     4
      Sec. 6651(g) provides:

          SEC. 6651(g). Treatment of Returns Prepared by
     Secretary Under Section 6020(B).--In the case of any
     return made by the Secretary under section 6020(b)--

                (1) such return shall be disregarded for
           purposes of determining the amount of the addition
                                                    (continued...)
                                   - 5 -

6020(b) return is not a return of the taxpayer for purposes of

section 6211(a) and that the amount shown on a section 6020(b)

return represents a “deficiency”.

     The language in section 6211(a) itself does not refer to a

section 6020(b) return or a return prepared by the Commissioner.

Instead, section 6211(a) speaks in terms of a return “made by the

taxpayer” and an amount “shown as the tax by the taxpayer

thereon”.5

     4
      (...continued)
          under paragraph (1) of subsection (a), but

                  (2) such return shall be treated as the
             return filed by the taxpayer for purposes of
             determining the amount of the addition under
             paragraphs (2) and (3) of subsection (a).
     5
      Sec. 6211(a) provides:

     SEC. 6211.    DEFINITION OF A DEFICIENCY.

          (a) In General.--For purposes of this title in the
     case of income, estate, and gift taxes imposed by
     subtitles A and B and excise taxes imposed by chapters
     41, 42, 43, and 44 the term “deficiency” means the
     amount by which the tax imposed by subtitle A or B, or
     chapter 41, 42, 43, or 44 exceeds the excess of--

                  (1) the sum of

                       (A) the amount shown as the tax by the
                  taxpayer upon his return, if a return was
                  made by the taxpayer and an amount was shown
                  as the tax by the taxpayer thereon, plus

                       (B) the amounts previously assessed (or
                  collected without assessment) as a
                  deficiency, over--

                                                      (continued...)
                               - 6 -

     In Millsap v. Commissioner, 91 T.C. 926 (1988), we addressed

the issue of whether a section 6020(b) return made by the

Commissioner was a “separate return” filed by “an individual”

under section 6013(b)(1).   We held that in order to provide a

“rational meaning” for the term “individual”, section 6013(b)(1)

should not be interpreted to include a return prepared by

respondent under section 6020(b).      Id. at 936-937.   Similarly, in

order for the references to the term “taxpayer” in section

6211(a) to have any “rational meaning”, section 6211(a) should be

interpreted to exclude returns which are prepared by the

Commissioner.

     There are other examples where this Court has interpreted

references in the Code to the term “return” as not including a

return prepared by the Commissioner.     For example, in Healer v.

Commissioner, 115 T.C. 316 (2000), we held that a section 6020(b)

return was not a return filed by the taxpayer for purposes of

section 6511.   Likewise, Congress has expressly or impliedly

limited the application of section 6020(b)(2).     Under section

6501(b)(3), “Notwithstanding the provisions of paragraph (2) of

section 6020(b), the execution of a return by the Secretary

pursuant to the authority conferred by such section shall not

start the running of the period of limitations on assessment and

     5
      (...continued)
               (2) the amount of rebates, as defined in
          subsection (b)(2), made.
                                - 7 -

collection.”    And, in section 6651(g)(1), a return prepared by

the Commissioner shall be disregarded for purposes of section

6651(a)(1), which imposes an addition to tax for failure to file

any “return”.

     Petitioner argues, on the basis of the aforementioned Code

sections, that “Where I.R.C. § 6020(b) returns are not to be

‘good and sufficient for all legal purposes,’ Congress has either

specifically stated the legal purpose for which they will not be

good and sufficient (as in I.R.C. § 6501(b)(3))”.    However, we do

not find that the language of section 6020(b)(2) is limited only

where Congress does so expressly.    Our decisions in Millsap v.

Commissioner, supra, and Healer v. Commissioner, supra, dealt

with situations where Congress did not impose any specific

limitation on section 6020(b)(2) with respect to the Code

sections involved, and we are not prepared to say that those

cases were incorrectly decided.

     Further, we might add that Congress impliedly recognized

that section 6020(b)(2) has limited application when it enacted

section 6651(g)(2):    Section 6651(g)(2) treats a section 6020(b)

return as a return of the taxpayer for purposes of section

6651(a)(2) and (3).    Petitioner, however, argues that section

6651(a)(2) is an example of a provision that is so “narrowly

drawn” that the term “return” can only be interpreted to refer to

a return filed by the taxpayer.    Despite petitioner’s
                               - 8 -

contentions, section 6651(a)(2) is no more “narrowly drawn” than

section 6211(a), upon which petitioner relies.   Indeed, section

6651(a)(2) refers to “the amount shown as tax on any return”,

whereas section 6211(a) refers to a return made by the taxpayer.

     Petitioner also argues that a section 6020(b) return is

“prima facie good and sufficient” to furnish a basis for

assessing the tax liabilties stated thereon and that under

section 6201(a)(1), “a tax shown upon a return made by Respondent

is to be treated in the same manner as is a tax shown upon a

return filed by a taxpayer.”   Petitioner reads section 6201(a)(1)

to state that “If Respondent has determined a tax, and has

disclosed the tax on a return by him, then Respondent is required

to assess the tax so determined and so disclosed without resort

to deficiency procedures.”   We have previously rejected this same

argument in Millsap v. Commissioner, supra.

     In Millsap v. Commissioner, supra, we rejected the notion

that respondent could preempt our deficiency procedures by filing

substitutes for return, stating:

          In their current form, the basic deficiency
     procedures are contained in sections 6211 through 6215.
     Respondent is not entitled, with few exceptions, to
     assess income tax until after the proper mailing of a
     notice of deficiency and, if petitioned, until the
     decision of this Court becomes final. Sec. 6213(a).
     Accordingly, the historical and traditional purpose of
     a return prepared and filed by the Commissioner would
     be suspended or would not take effect until the
     deficiency procedures are first completed. If the
     return respondent prepares under section 6020(b)
     authority is literally treated as “prima facie good and
                              - 9 -

     sufficient for all legal purposes,” respondent could
     ignore the deficiency procedures. This is because the
     return is a consent to assessment of tax in our tax
     system. See sec. 6201(a)(1) and sec. 1.6201-1(a)(1),
     Income Tax Regs. Congress has recognized that literal
     application of section 6020(b) may create anomalous
     results and has provided some explicit safeguards: The
     “execution of a return by the [respondent] pursuant to
     [section 6020(b)] shall not start the running of the
     period of limitations on assessment and collection.”
     Sec. 6501(b)(3). * * * [Id. at 931-932; fn. ref.
     omitted.]

We concluded that “the substitute return should in no way

preclude a taxpayer’s statutory right to a hearing on the

deficiency and the elements that comprise it.”6   Id. at 936.

     Section 6201(a)(1) provides that “The Secretary shall assess

all taxes determined by the taxpayer or by the Secretary as to

which returns or lists are made under this title.”   Although

section 6201(a)(1) does not appear to distinguish between the

obligations to assess a tax with respect to a return filed by the

taxpayer and a return filed by the Commissioner, Congress surely




     6
      Petitioner argues that in Millsap v. Commissioner, 91 T.C.
926 (1988), the taxpayer did not raise, and this Court did not
address, whether the Commissioner could assess an income tax in a
case involving a sec. 6020(b) return without going through the
deficiency procedures. However, in the headnote to that opinion,
we stated: “P contends that R’s preparation of a return under
authority of sec. 6020(b) does not obviate P’s statutory right to
deficiency procedures, including our redetermination of R’s
determination of filing status.” Id. at 926. And, we held that
“the returns prepared by R do not obviate P’s entitlement to
deficiency procedures”. Id.
                              - 10 -

did not intend to deny nonfilers a prepayment forum in all cases

where a section 6020(b) return is filed.7

     Nevertheless, petitioner suggests that nonfilers should be

treated in the same manner as delinquent filers.   Petitioner

contends that delinquent filers who have shown an amount of tax

on their return cannot contest their tax liabilities under the

deficiency procedures, but they must instead “pay first and

litigate later”.   On the other hand, if a section 6020(b) return

is not good and sufficient for purposes of sections 6201(a)(1)

and 6211(a), nonfilers will be entitled to the deficiency

procedures.   Petitioner contends that this creates an “absurd

result”, a disparity between delinquent filers and nonfilers that

could not have been the intention of Congress.   We disagree.

There is a fundamental difference between a delinquent filer and

a nonfiler.   The delinquent filer has accepted the correctness of

the amounts shown on his or her return, whereas the nonfiler has

not accepted those amounts.   With respect to the delinquent

filer, section 6201(a)(1) authorizes the Secretary to assess




     7
      See also Ruff v. Commissioner, T.C. Memo. 1990-521;
Angstadt v. Commissioner, T.C. Memo. 1990-433; Browder v.
Commissioner, T.C. Memo. 1990-408. In Ruff v. Commissioner,
supra, we stated that “the Internal Revenue Service may prepare
substitute returns for taxpayers who fail to do so themselves,
section 6020(b)(1), but the substitute return does not preclude a
taxpayer’s statutory right to a hearing on the deficiency and the
elements that comprise it.”
                                - 11 -

against the taxpayer the tax liability shown on her own tax

return that was signed under penalties of perjury.

     In the instant case, respondent agrees that he must follow

the deficiency procedures prior to assessment of an income tax

liability stated on a section 6020(b) return, unless the taxpayer

agrees to the correctness of the tax liability stated in such a

return.   See sec. 6020(a).   Petitioner has not agreed to the

correctness of the tax liabilities stated in the returns prepared

by respondent, and she vigorously contests whether she has any

income tax liabilities for the tax years at issue.    We hold that

respondent must follow the deficiency procedures with respect to

tax liabilities stated in the section 6020(b) returns.    We also

hold that a section 6020(b) return is not a return under section

6211(a) and that there can be a “deficiency” within the meaning

of that section, even though the tax liabilities stated on the

section 6020(b) returns are equal to the deficiencies determined

in the notice of deficiency.8    We shall deny petitioner’s motions


     8
      Petitioner has raised an additional argument with respect
to her 1995 tax year. Pursuant to sec. 301.6211-1(a), Proced. &
Admin. Regs., respondent determined that the amount shown on a
return was zero and computed the deficiency for that year to be
the full amount of petitioner’s determined tax liability of
$2,747. Sec. 301.6211-1(a), Proced. & Admin. Regs., provides in
relevant part that “If no return is made * * * for the purpose of
the definition ‘the amount shown as the tax by the taxpayer upon
his return’ shall be considered as zero.” Petitioner contends
that this regulation does not implement sec. 6211 in a
“reasonable manner”. Petitioner relies on an amendment to the
predecessor of sec. 6211 which removed language similar to the
                                                   (continued...)
                                - 12 -

for partial summary judgment.



                                         An appropriate order will be

                                 issued denying the motions for

                                 partial summary judgment.




     8
      (...continued)
relevant language contained in the regulation. See Individual
Income Tax Act of 1944, ch. 210, sec. 14(a), 58 Stat. 245, 26
U.S.C. sec. 6211(a) (1994). We do not agree with petitioner that
Congress intended to exclude from the definition of a
“deficiency” taxes which are determined by respondent for a
nonfiling taxpayer. If that were the case, respondent could
preempt the deficiency procedures with respect to all nonfilers.
We hold that sec. 301.6211-1(a), Proced. & Admin. Regs., is not
an unreasonable interpretation of sec. 6211. See Laing v. United
States, 423 U.S. 161, 174 (1976) (citing sec. 301.6211-1, Proced.
& Admin. Regs., and stating that “Where there has been no tax
return filed, the deficiency is the amount of tax due”); Schiff
v. United States, 919 F.2d 830, 832 (2d Cir. 1990) (“when a
taxpayer does not file a tax return, it is as if he filed a
return showing a zero amount for purposes of assessing a
deficiency”).
