                              T.C. Memo. 2013-111



                        UNITED STATES TAX COURT



                 NANCY LOUISE FIELD, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 22522-11.                       Filed April 18, 2013.



      John M. Mooney, Jr., for petitioner.

      Marshall R. Jones and John F. Driscoll, for respondent.



                          MEMORANDUM OPINION


      THORNTON, Judge: This case is before us on respondent’s motion for

summary judgment. Respondent determined a $10,144 deficiency in petitioner’s

2009 Federal income tax and a $2,029 accuracy-related penalty under section
                                         -2-

[*2] 6662(a).1 The issues for decision are: (1) whether petitioner is entitled to a

tax credit for adoption expenses under section 23(a) and (2) whether she is liable

for the section 6662(a) penalty.

                                      Background

      The record reveals or the parties do not dispute the following.

      On July 16, 2008, petitioner and her husband, who is petitioner’s counsel of

record, were married. They did not live apart during the last six months of 2009.

On her 2009 Federal income tax return petitioner claimed a status of married filing

separate and claimed that under section 23(a) she was entitled to a qualified

adoption expense credit of $10,144, which exactly offset her reported tentative tax

of the same amount.

      In his notice of deficiency respondent’s disallowance of petitioner’s claimed

qualified adoption expense credit resulted in a $10,144 deficiency. Respondent

also determined that pursuant to section 6662(a) petitioner was liable for an

accuracy-related penalty of $2,029.




      1
       Unless otherwise indicated, all section references are to the Internal
Revenue Code in effect for the year at issue, and all Rule references are to the Tax
Court Rules of Practice and Procedure. Monetary amounts have been rounded to
the nearest dollar.
                                          -3-

[*3]                                  Discussion

       Summary judgment is intended to expedite litigation and avoid unnecessary

and expensive trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988).

Summary judgment may be granted where there is no genuine dispute as to any

material fact and a decision may be rendered as a matter of law. Rule 121(b). The

moving party bears the burden of proving that there is no genuine dispute as to any

material fact, and factual inferences will be read in a manner most favorable to the

party opposing summary judgment. Sundstrand Corp. v. Commissioner, 98 T.C.

518, 520 (1992), aff’d, 17 F.3d 965 (7th Cir. 1994). When a motion for summary

judgment is made and properly supported, the adverse party may not rest upon

mere allegations or denials of the pleadings but must set forth specific facts

showing that there is a genuine dispute for trial. Rule 121(d).

       Section 23(a) allows a credit against an individual’s income tax for

“qualified adoption expenses paid or incurred by the taxpayer.” If the taxpayer is

married at the close of the taxable year, this credit is generally allowed only if the

taxpayer and his or her spouse file a joint return for that taxable year (joint filing

requirement).2 Sec. 23(f)(1). Because petitioner was married as of the close of


       2
       There are certain exceptions to the general rule. See sec. 23(f)(1) (cross-
referencing sec. 21(e)(2), (3), and (4)). Petitioner has not alleged and the record
                                                                        (continued...)
                                         -4-

[*4] 2009 but did not file a joint return, she is not entitled to any credit under

section 23(a).

      In opposing respondent’s motion for summary judgment, petitioner

contends that the joint filing requirement violates her equal protection rights under

the Fifth Amendment to the U.S. Constitution. She alleges that before she married

in 2008 she adopted 15 children, that her husband has never adopted any of these

children, and that for all practical purposes she has been their only support.

Petitioner contends that the effect of the joint filing requirement is to penalize her

for having married in 2008. She contends that in “this unique situation of hers

* * * she should be treated as * * * unmarried”.

      The Fifth Amendment, as applied to Federal legislation, encompasses the

equal protection requirements of the Fourteenth Amendment. Weinberger v.

Wiesenfeld, 420 U.S. 636, 638 n.2 (1975). The Supreme Court recently reiterated

its longstanding holding that “‘a classification neither involving fundamental

rights nor proceeding along suspect lines * * * cannot run afoul of the Equal

Protection Clause if there is a rational relationship between the disparity of

treatment and some legitimate governmental purpose.’” See Armour v. City of



      2
       (...continued)
does not show that any of these exceptions applies in this case.
                                          -5-

[*5] Indianapolis, __ U.S. __, __, 132 S. Ct. 2073, 2080 (2012) (quoting Heller v.

Doe, 509 U.S. 312, 319-320 (1993)).

      Petitioner appears to suggest that the joint filing requirement imposes an

impermissible classification on the basis of marital status. The effects, if any, that

the joint filing requirement has had on petitioner’s right to marry or her familial

relationships are incidental burdens and do not rise to the level of an

impermissible burden necessitating a heightened standard of review by this Court.

Cf. Zablocki v. Redhail, 434 U.S. 374, 383, 386 (1978) (stating that although the

right to marry is “of fundamental importance”, the State may legitimately impose

“reasonable regulations that do not significantly interfere with decisions to enter

into the marital relationship”); Califano v. Jobst, 434 U.S. 47, 58 (1977)

(explaining that Social Security classifications that had a tangential impact upon a

marital decision did not violate due process); see also Kellems v. Commissioner,

58 T.C. 556 (1972) (upholding different tax rates for married and single

taxpayers), aff’d per curiam, 474 F.2d 1399 (2d Cir. 1973). Rather, the

complained-of classification is, at most, what the Supreme Court has labeled a

“tax classification.” Armour, __ U.S. at __, 132 S. Ct. at 2080.

      A tax classification is “constitutionally valid if ‘there is a plausible policy

reason for the classification, the legislative facts on which the classification is
                                          -6-

[*6] apparently based rationally may have been considered to be true by the

governmental decisionmaker, and the relationship of the classification to its goal is

not so attenuated as to render the distinction arbitrary or irrational.’” Id. at __, 132

S. Ct. at 2080 (quoting Nordlinger v. Hahn, 505 U.S. 1, 11 (1992)). There is

deemed to be a plausible policy reason “if ‘there is any reasonably conceivable

state of facts that could provide a rational basis for the classification.’” Id. at __,

132 S. Ct. at 2080 (quoting FCC v. Beach Commc’ns, Inc., 508 U.S. 307, 313

(1993)). Moreover, “because the classification is presumed constitutional, the

‘burden is on the one attacking the legislative arrangement to negative every

conceivable basis which might support it.’” Id. at __, 132 S. Ct. at 2080-2081

(quoting Doe, 509 U.S. at 320).

      The joint filing requirement is very similar to a requirement under former

section 214, which allowed a deduction for child care expenses for married

taxpayers but only if they filed joint returns. This Court held that requirement to

be valid under the Equal Protection Clause, and its holding was affirmed by the

Court of Appeals for the Fifth Circuit, to which any appeal of this case would lie.

See sec. 7482(b)(1)(A); Black v. Commissioner, 69 T.C. 505 (1977); Cash v.

Commissioner, T.C. Memo. 1977-405, aff’d per curiam, 580 F.2d 152 (5th Cir.

1978). With respect to the joint filing requirement under section 23(a), as with the
                                         -7-

[*7] joint filing requirement under former section 214, Congress could reasonably

assume that spouses who live together share the cost of maintaining the household,

so as to justify the joint filing requirement. For this purpose, it is immaterial

whether the assumption might have proved erroneous in petitioner’s situation, as

she alleges. Furthermore, we believe that plausible administrative considerations

provide a rational basis for the joint filing requirement. See Armour, __ U.S. at

__, 132 S. Ct. at 2081 (“Ordinarily, administrative considerations can justify a tax-

related distinction.”). For instance, the joint filing requirement plausibly mitigates

administrative concerns against married taxpayers’ claiming duplicative adoption

credits for the same child on separate returns.

      Petitioner suggests that respondent has allowed her to claim adoption tax

credits for 2010 “under the same format”, which we understand to mean with

respect to a return that she filed separately. She contends that respondent’s

alleged lack of consistency denies her equal protection under the law. Petitioner’s

argument is without merit. Each tax year stands on its own and must be separately

considered. See United States v. Skelly Oil Co., 394 U.S. 678, 684 (1969). The

Commissioner is not required for any given year to allow a tax benefit permitted

for a previous or subsequent year. See, e.g., Lerch v. Commissioner, 877 F.2d
                                          -8-

[*8] 624, 627 n.6 (7th Cir. 1989), aff’g T.C. Memo. 1987-295; Pekar v.

Commissioner, 113 T.C. 158, 166 (1999).

         We conclude and hold that the joint filing requirement does not violate the

Equal Protection Clause. Finding no genuine issue of material fact requiring a

trial in this case with regard to the disallowance of the tax credit under section

23(a), we further hold that respondent is entitled to summary judgment on that

issue.

         Respondent also determined that petitioner is liable for an accuracy-related

penalty pursuant to section 6662. Respondent bears the burden of production with

respect to this penalty. See sec. 7491(c). To meet this burden, respondent must

produce evidence establishing that it is appropriate to impose this penalty. Once

respondent has done so, the burden of proof is on petitioner to show that the

penalty does not apply. See Higbee v. Commissioner, 116 T.C. 438, 449 (2001).

      Section 6662(a) and (b)(1) and (2) imposes a penalty equal to 20% of the

portion of the underpayment of tax attributable to, among other things, negligence

or disregard of rules or regulations or any substantial understatement of income tax.

Negligence includes any failure to make a reasonable attempt to comply with the

provisions of the internal revenue laws, and the term “disregard” includes any

careless, reckless, or intentional disregard of rules or regulations. Sec. 6662(c).
                                        -9-

[*9] Negligence is the lack of due care or failure to do what a reasonable and

ordinarily prudent person would do under like circumstances. See, e.g., Allen v.

Commissioner, 925 F.2d 348, 353 (9th Cir. 1991), aff’g 92 T.C. 1 (1989); Neely v.

Commissioner, 85 T.C. 934, 947 (1985). A substantial understatement of income

tax is defined in section 6662(d)(1)(A) as an understatement that exceeds the

greater of 10% of the tax required to be shown on the return or $5,000.

      Petitioner’s $10,144 understatement exceeds $5,000, which is greater than

10% of the tax required to be shown on her return. Accordingly, respondent has

met his burden of production to show that petitioner has a substantial

understatement of income tax.

      Respondent having met his burden, petitioner must come forward with

persuasive evidence that the determination is incorrect. See Rule 142(a); Higbee v.

Commissioner, 116 T.C. at 447. Taxpayers can meet this burden by showing that

they acted with reasonable cause and in good faith. Sec. 6664(c)(1); sec. 1.6664-

4(a), Income Tax Regs. Petitioner asserts that she acted with reasonable cause and

in good faith. Because there is a genuine dispute as to the material facts with

respect to this issue, respondent is not entitled to summary judgment on this issue.
                                      - 10 -

[*10] Accordingly, we will grant in part respondent’s motion for summary

judgment. To reflect the foregoing,


                                                       An appropriate order

                                                 will be issued.
