                        T.C. Memo. 2010-38



                      UNITED STATES TAX COURT



              JOHN MICHAEL DAVIDSON, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 27021-08.              Filed February 24, 2010.



     John Michael Davidson, pro se.

     Shannon E. Loechel, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     FOLEY, Judge:   After concessions, the issues for decision

are whether petitioner is entitled to a net operating loss

carryover relating to 2003 and whether petitioner is liable for a

section 6651(a)(1)1 addition to tax.


     1
      Unless otherwise indicated, all section references are to
                                                   (continued...)
                               - 2 -

                         FINDINGS OF FACT

     Most of the facts have been stipulated and are so found.

Petitioner timely filed 1999 and 2000 Federal income tax returns,

reporting adjusted gross income of $97,291 and $109,123,

respectively.   On September 25, 2006, petitioner and his wife

untimely filed a joint Federal income tax return relating to 2003

and claimed a $64,973 net operating loss (NOL) carryover relating

to losses sustained in 2001 and 2002.    On January 2, 2007,

petitioner and his wife untimely filed joint Federal income tax

returns relating to 2001 and 2002.     On the 2001 and 2002 returns

petitioner and his wife reported NOLs of $26,628 and $38,345,

respectively, and attempted to waive the carryback period

relating to each loss.

     On August 7, 2008, respondent issued petitioner and

petitioner’s wife a notice of deficiency relating to 2003.       In

the notice of deficiency, respondent determined that petitioner

and petitioner’s wife were not entitled to the $64,973 NOL

carryover claimed on their 2003 return.     Respondent further

determined a $6,654 deficiency and a $1,664 section 6651(a)(1)

addition to tax for failure to file a timely return.     On November




     1
      (...continued)
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
                                - 3 -

6, 2008, petitioner, while residing in Georgia, filed his

petition with the Court.

                               OPINION

     We must determine whether petitioner is entitled to an NOL

carryover relating to 2003.   Petitioner contends that his 2003

income is offset by NOLs sustained in, and carried over from,

2001 and 2002.    Petitioner bears the burden of proof with respect

to whether he is entitled to an NOL carryover relating to 2003.2

See Rule 142(a).    Generally, before an NOL may be carried

forward, it must be carried back (carryback rule).    See sec.

172(b); sec. 1.172-4(b)(1) and (2), Income Tax Regs.    On a timely

filed return, a taxpayer may elect to waive application of the

carryback rule.    See sec. 172(b)(3), (j); see also sec. 301.9100-

12T(d), Temporary Proced. & Admin. Regs., 57 Fed. Reg. 43893,

43896 (Sept. 23, 1992) (redesignating sec. 7.0, Temporary Income

Tax Regs., 42 Fed. Reg. 1470 (Jan. 7, 1977)).    Petitioner filed

his 2001 and 2002 returns on January 2, 2007--several years after

their respective due dates.    Thus, petitioner failed to timely

waive the applicable carryback rules relating to his 2001 and

2002 NOLs.   Petitioner must therefore establish that these losses

were not absorbed by his gross income in prior years.    See sec.

172(b)(1)(A), (H); Jones v. Commissioner, 25 T.C. 1100, 1104


     2
      Sec. 7491(a) is inapplicable because petitioner failed to
introduce credible evidence within the meaning of sec.
7491(a)(1).
                                 - 4 -

(1956), revd. in part and remanded on other grounds 259 F.2d 300

(5th Cir. 1958); sec. 1.172-4(b)(1) and (2), Income Tax Regs.

Petitioner had sufficient income in those years to absorb the

NOLs.   See sec. 172(b)(1)(H); sec. 1.172-4(b)(1) and (2), Income

Tax Regs.    Accordingly, we sustain respondent’s determination

with respect to petitioner’s NOL carryover.

     We must also determine whether petitioner is liable for a

section 6651(a)(1) addition to tax for failure to file a timely

return.   Petitioner filed his 2003 return (i.e., which was due

April 15, 2004) on September 25, 2006, and has failed to

establish, pursuant to section 6651(a)(1), that the untimely

filing was due to reasonable cause and not willful neglect.

Accordingly, petitioner is liable for the section 6651(a)(1)

addition to tax.

     Contentions we have not addressed are irrelevant, moot, or

meritless.

     To reflect the foregoing,


                                              Decision will be entered

                                         under Rule 155.
