                          T.C. Summary Opinion 2015-70


                         UNITED STATES TAX COURT



                BAUDELIO LOPEZ IBARRA, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 22017-14S.                         Filed November 30, 2015.



      Baudelio Lopez Ibarra, pro se.

      Mistala M. Cullen, for respondent.



                              SUMMARY OPINION


      ARMEN, Special Trial Judge: This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect when the

petition was filed.1 Pursuant to section 7463(b), the decision to be entered is not



      1
        Unless otherwise indicated, all subsequent section references are to the
Internal Revenue Code in effect for 2010, the taxable year in issue. All Rule
references are to the Tax Court Rules of Practice and Procedure.
                                          -2-

reviewable by any other court, and this opinion shall not be treated as precedent

for any other case.

      Respondent determined the following deficiency in, and additions to,

petitioner’s Federal income tax for 2010:

                                              Additions to Tax
    Year      Deficiency       Sec. 6651(a)(1) Sec. 6651(a)(2) Sec. 6654(a)

     2010      $9,025.00         $1,301.40          $1,070.04         $116.32

      Petitioner concedes that he was obliged, but failed, to file an individual

income tax return for 2010 and that he received each of the items of income

determined in the notice of deficiency. Respondent does not dispute that

petitioner paid mortgage interest in 2010 in an amount that exceeds the standard

deduction that was allowed in the notice of deficiency, which thereby serves to

reduce the amounts of the deficiency and the additions to tax as originally

determined. Remaining for the Court to decide is whether petitioner is liable for

the additions to tax for failure to timely file, for failure to timely pay, and for

failure to pay estimated tax. As discussed below, the Court holds largely for

petitioner.
                                        -3-

                                    Background

      Petitioner resided in the State of Oregon at the time that the petition was

filed with the Court.

      During 2010 petitioner received a modest amount of retirement income from

several sources and a similarly modest amount of income from employment.

      In early 2011 petitioner was laid off from work. At about the same time his

wife Cheryl, who was already in ill health from a stroke and other chronic medical

conditions, was diagnosed with pancreatic cancer after complaining about a pain

in her side for some time.2 She died later that year at the end of the summer.

      During the last months of her life Cheryl required round-the-clock care,

which petitioner, together with other immediate family members, provided full

time in his home. Although petitioner had some health insurance, it was

inadequate given the medical care that his wife required, and the family’s

resources were depleted. At that point petitioner could no longer afford to pay for

the oncologists and other medical specialists that Cheryl required, and her cancer

treatment was relegated to naturopaths and other similar nonmedical providers

who were willing to either reduce their fees or donate their services.


      2
       It is generally acknowledged that pancreatic cancer is an especially deadly
form of cancer. Fed. R. Evid. 201.
                                          -4-

Unfortunately, naturopathy and other similar methods proved to be ineffective in

treating Cheryl’s cancer and, after a period of hospice care, also at home, she died.

        Petitioner was distraught after the death of his wife, to whom he had been

married for over 40 years, and it took some time for him to come to terms with her

passing.3 After some period had elapsed and to help deal with his grief petitioner

undertook to become a medical interpreter, and thereafter he both volunteered his

time and worked for a company in that capacity.

        During the course of his marriage petitioner’s practice was to file joint

returns with his wife. Specifically for 2009, petitioner filed a joint return and

reported tax of $4,119. However, for 2010 petitioner did not file any return, nor

did he pay any tax other than through withholdings. Petitioner did file a return for

2011.

                                      Discussion

        At trial respondent introduced evidence satisfying his burden of production

under section 7491(c) as to the additions to tax for failure to file, for failure to pay,

and for failure to pay estimated tax. See Higbee v. Commissioner, 116 T.C. 438,

446-447 (2001); see also Wheeler v. Commissioner, 127 T.C. 200, 210 (2006),

        3
        It is generally acknowledged that the loss of a spouse, particularly one of
long standing, has demonstrable emotional, mental, and physical affects. Fed. R.
Evid. 201.
                                         -5-

aff’d, 521 F.3d 1289 (10th Cir. 2008). Petitioner therefore bears the burden of

proving that respondent erred in determining each of those additions to tax. See

Higbee v. Commissioner, 116 T.C. 438.

I. Additions to Tax for Failure To File and for Failure To Pay

      Section 6651(a)(1) imposes an addition to tax for failure to file a timely

return.4 The addition to tax may be avoided if the failure to file is due to

reasonable cause and not due to willful neglect. “Reasonable cause” contemplates

that the taxpayer exercised ordinary business care and prudence and was

nonetheless unable to file a return within the prescribed time. United States v.

Boyle, 469 U.S. 241, 246 (1985); sec. 301.6651-1(c)(1), Proced. & Admin. Regs.

“Willful neglect” means a conscious, intentional failure or reckless indifference.

Boyle, 469 U.S. at 245.

      Section 6651(a)(2) imposes an addition to tax for failure to pay the amount

shown as a tax on a return on or before the date prescribed for payment of the tax.5



      4
        Sec. 6651(g)(1) provides that in the case of any return made by the
Commissioner under sec. 6020(b), such a return shall be disregarded for purposes
of determining the amount of the addition to tax under sec. 6651(a)(1).
      5
        Sec. 6651(g)(2) provides that in the case of any return made by the
Commissioner under sec. 6020(b), such a return shall be treated as the return filed
by the taxpayer for purposes of determining the amount of the addition to tax
under sec. 6651(a)(2).
                                        -6-

The addition to tax may be avoided if the failure to pay is due to reasonable cause

and not due to willful neglect. “Reasonable cause” contemplates that the taxpayer

exercised ordinary business care and prudence in providing for payment of the

taxpayer’s tax liability and was nonetheless unable to pay the tax or would suffer

undue hardship if the tax were paid within the prescribed time. Sec. 301.6651-

1(c)(1), Proced. & Admin. Regs. “Willful neglect” means a conscious, intentional

failure or reckless indifference. Boyle, 469 U.S. at 245. The standard for

reasonable cause under section 6651(a)(1) and (2) has been interpreted to be the

same. See E. Wind Indus., Inc. v. United States, 196 F.3d 499, 504 n.5 (3d Cir.

1999); Russell v. Commissioner, T.C. Memo. 2011-81.

      This Court has held that the illness of a taxpayer or a member of his or her

immediate family may be reasonable cause for late filing if the taxpayer

demonstrates that he or she could not file a timely return because of the illness.

E.g., Williams v. Commissioner, 16 T.C. 893, 906 (1951); Tabbi v. Commissioner,

T.C. Memo. 1995-463; Harris v. Commissioner, T.C. Memo. 1969-49; Hayes v.

Commissioner, T.C. Memo. 1967-80. We think that this standard is satisfied in

the instant case given the following: early in the filing season for the 2010 taxable

year petitioner was laid off from work; at about the same time his wife, who was

already in ill health from a stroke and other chronic medical conditions, was
                                         -7-

diagnosed with pancreatic cancer, which is widely acknowledged as a particularly

deadly form of cancer with an exceedingly low five-year survival rate, particularly

among older women where the cancer has metastasized; his wife required ever-

increasing care, culminating in full-time, round-the-clock care at home during the

last months of her life; petitioner was a principal caregiver; his wife died later in

the year at the end of the summer; and petitioner, distraught after the death of his

wife to whom he had been married for over 40 years, required some time to come

to terms with her passing.

      Likewise, we think that petitioner’s failure to pay tax was due to reasonable

cause. Apart from the fact that tax withholding from petitioner’s wages in 2010

would have satisfied in large part his tax liability for that year if he had been able

to bring himself to file a joint return with his dying wife, petitioner would have

suffered undue hardship if the tax were paid within the prescribed time. After all,

although petitioner had some health insurance, the family’s resources were soon

depleted given the medical care that his wife required. Indeed, at some point

petitioner could no longer even afford to pay for the oncologists and other medical

specialists that his wife required, and her cancer treatment was relegated to

naturopaths and other similar providers who were willing to reduce their fees or

donate their services.
                                         -8-

      In sum, the Court holds that petitioner’s failure to file and to pay is excused

by reasonable cause under the unique circumstances present in this case.

Consequently, respondent’s determinations of the additions to tax are not

sustained.

II. Addition to Tax for Failure To Pay Estimated Tax

      Section 6654 imposes an addition to tax for failure to pay estimated tax.

Imposition of the addition is generally mandatory whenever prepayments of tax,

either through withholding or the making of estimated quarterly payments, do not

equal the amount required by the statute. See sec. 6654(a); Niedringhaus v.

Commissioner, 99 T.C. 202, 222 (1992); Grosshandler v. Commissioner, 75 T.C.

1, 20-21 (1980).

      The amount required by the statute, i.e., the taxpayer’s “required annual

payment”, is the lesser of: (1) 90% of the tax shown on the return for the taxable

year or, if no return is filed, 90% of the tax for such year; or (2) 100% of the tax

shown on the return for the preceding taxable year. Sec. 6654(d)(1)(B).

Petitioner’s tax liability shown on his return for 2009 was $4,119, an amount that

would appear to be less than 90% of his tax liability for 2010 (even after taking

into account the mortgage interest deduction that respondent did not consider

when computing the addition to tax in the notice of deficiency).
                                        -9-

      Unlike the other two additions to tax, the addition under section 6654 is not

excused by reasonable cause and lack of willful neglect, and extenuating

circumstances are, for the most part, irrelevant. See Estate of Ruben v.

Commissioner, 33 T.C. 1071, 1072 (1960); see also Grosshandler v.

Commissioner, 75 T.C. at 21. But see section 6654(e)(3)(B) for an exception not

applicable herein.

      In view of the foregoing, we hold that petitioner is liable for the addition to

tax under section 6654 in an amount less than that determined in the notice of

deficiency. The parties shall compute the correct amount of the addition as part of

the Rule 155 computation.

                                    Conclusion

      To give effect to our disposition of the disputed issues, as well as

respondent’s concession regarding the mortgage interest deduction,


                                                    Decision will be entered

                                              under Rule 155.
