                           NOT FOR PUBLICATION                           FILED
                                                                          MAY 29 2019
                    UNITED STATES COURT OF APPEALS
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

SCOTT WESLEY WILLIAMS;                          No.    15-71505
MICHAELE ANNA WILLIAMS,
                                                Tax Ct. No. 4640-12
                Petitioners-Appellants,

 v.                                             MEMORANDUM*

COMMISSIONER OF INTERNAL
REVENUE,

                Respondent-Appellee.

                           Appeal from a Decision of the
                             United States Tax Court

                             Submitted May 24, 2019**

Before: GOODWIN, LEAVY, and SILVERMAN, Circuit Judges.

      Scott Wesley Williams and Michaele Anna Williams appeal pro se the Tax

Court’s denial of their petition for redetermination of a federal income tax

deficiency for 2007. We have jurisdiction under 26 U.S.C. § 7482(a)(1). We

review de novo the Tax Court’s conclusions of law and for clear error its factual


      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
findings. Meruelo v. Comm’r of Internal Revenue, 691 F.3d 1108, 1114 (9th Cir.

2012). We affirm.

      The Tax Court properly found that Scott Williams’s airplane-rental and

telephone-skills-training activities did not constitute an “appropriate economic

unit,” and therefore that he did not materially participate in the airplane-rental

activity for more than 500 hours for purposes of avoiding the rule prohibiting the

deduction of passive activity loss from non-passive income. See 26 U.S.C.

§ 469(a) (providing that taxpayers generally may not deduct “passive activity loss”

against non-passive income); id. § 469(c)(1) (“The term ‘passive activity’ means

any activity—(A) which involves the conduct of any trade of business, and (B) in

which the taxpayer does not materially participate.”); Treas. Reg. § 1.469-4(c)(2)

(allowing taxpayers to group activities for purposes of applying this rule if the

activities constitute “an appropriate economic unit”); id. § 1.469-5T(a)(1) (a

taxpayer materially participates in an activity if, inter alia, the taxpayer

“participates in the activity for more than 500 hours” during the taxable year).

      The Tax Court properly found that the burden of proof on whether the

activities constituted an appropriate economic unit did not shift to the

Commissioner. See 26 U.S.C. § 7491(a)(1) (“if, in any court proceeding, a

taxpayer introduces credible evidence with respect to any factual issue relevant to

ascertaining the liability of the taxpayer for any tax imposed by subtitle A or B, the



                                           2
Secretary shall have the burden of proof with respect to such issue”); Davis v.

Comm’r of Internal Revenue, 394 F.3d 1294, 1298 n.2 (9th Cir. 2005) (“The

taxpayer bears the burden of showing that he or she meets every condition of a tax

exemption or deduction.”).

      AFFIRMED.




                                         3
