                  T.C. Summary Opinion 2006-94



                     UNITED STATES TAX COURT



         RICHARD A. AND ELAINE C. MURRAY, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14369-04S.              Filed June 20, 2006.



     Richard A. Murray, pro se.

     Angelique M. Neal, for respondent.




     COUVILLION, Special Trial Judge:     This case was heard

pursuant to section 7463 in effect when the petition was filed.1

The decision to be entered is not reviewable by any other court,

and this opinion should not be cited as authority.




     1
      Unless otherwise indicated, subsequent section references
are to the Internal Revenue Code in effect for the year at issue.
                               - 2 -

     Respondent determined a deficiency of $6,493 in petitioners’

2001 Federal income tax.   Prior to trial, the parties resolved

all the adjustments listed in the notice of deficiency;

therefore, the underlying deficiency is not at issue.   The sole

issue for decision is whether the issuance of the notice of

deficiency to petitioners was valid.

     Some of the facts were stipulated.   Those facts, with the

exhibits annexed thereto, are so found and are made part hereof.

Petitioners’ legal residence at the time the petition was filed

was North Hills, California.

     Mr. Murray worked as a computer analyst for Litton

Industries for 25 years.   He was laid off in 2003 and has since

been receiving retirement income.   Mr. Murray previously prepared

his own income tax return; however, sometime in the late

nineties, due to confusion over the alternative minimum tax,

petitioners began using a return preparer.   The return preparer,

Peter Chavez, was referred to petitioners by their daughter’s

boyfriend.   Mr. Chavez conducted a tax return preparation

business called Tax Care For Less in Burbank, California.    He

prepared petitioners’ 2001 Federal income tax return, as well as

the returns of petitioners’ two daughters, one of the daughter’s

boyfriend, and multiple friends of petitioners.
                                - 3 -

     On their 2001 Federal income tax return, the following

disallowances and adjustments were agreed to as a result of an

audit of petitioners’ return by respondent.



                                         Claimed          Agreed to
                                        on return         by parties

Schedule A deductions
  Medical expenses                       $ 7,894            $ -0-
  State and local taxes                   11,633             1,759
  Personal property taxes                  1,499               246
  Charitable contributions                 9,946             3,625
  Unreimbursed employee expenses           2,584               518
  Subscriptions                              854              -0-
  Maintenance repairs                      1,987              -0-
  Gambling losses                          2,307             2,307
Education credit                           2,200              -0-


     Petitioners testified that they, and their family and

friends, were audited only after an employee of their return

preparer reported him to the IRS.    This employee purportedly knew

that Mr. Chavez was preparing returns fraudulently and allowing

taxpayers to claim deductions that were either inflated or

imaginary.    The employee demanded $50,000 to keep quiet, and,

when Mr. Chavez refused to pay, the employee reported his actions

to the IRS.   Petitioners believe that, because of the tip to the

IRS, anyone who made more than $40,000 and had a return prepared

at Tax Care For Less was audited by the IRS.       Because the IRS

“used blackmail as a source of their information”, petitioners

contend that the audit of their 2001 Federal income tax return

was improper.
                               - 4 -

     Generally, the Court will not look behind the notice of

deficiency to review the information used or the Commissioner’s

motives or procedure involved in making a determination.

Greenberg’s Express, Inc. v. Commissioner, 62 T.C. 324, 327-328

(1974). However, if the taxpayer establishes that the deficiency

notice is arbitrary or without foundation, the burden of going

forward with the evidence shifts to the Commissioner.       Dellacroce

v. Commissioner, 83 T.C. 269, 280 (1984).

     Although Mr. Murray testified at length as to why he

believed the IRS began investigating Mr. Chavez, he offered no

independent evidence of that at trial.    Petitioners introduced

several letters written by petitioners to the Department of

Justice, the IRS criminal investigation chief, and the Attorney

General.   The letters discuss petitioners’ belief that an

employee of Mr. Chavez reported him to the IRS after he failed to

answer her demand for “hush money”.    Petitioners, however, do not

name this female employee in any of their letters, nor could they

recall her name at trial.   Furthermore, petitioners could offer

no witnesses to verify their allegation.    They were not

approached by this employee and refused to reveal at trial how

they learned of the attempted blackmail of Mr. Chavez.      When

challenged regarding the validity of their claims, Mr. Murray

could only say:   “I know it’s true.   I just know”.
                                 - 5 -

      At trial, Mr. Murray eventually resorted to quoting the

Fourth Amendment and demanding that the Court force respondent to

“reveal his sources” and admit the IRS “is shielding and

protecting and encouraging people to be blackmailers”.

Petitioners went as far as to allege that “the IRS is probably

paying off the blackmailer * * * the IRS is guilty of obstruction

of justice because they’re harboring a blackmailer”.

     The Court declines to attach any validity to petitioners’

allegations insofar as this case is concerned.      Petitioners

conceded most of respondent’s disallowances and agreed to

adjustments on the remaining items.      That fact indicates that

respondent had an appropriate reason to make the determination

reflected in the notice of deficiency.      Whether the IRS received

a “tip” about Mr. Chavez’s fraudulent practice is immaterial in

this proceeding.    Adjustments were made to petitioners’ return,

and the fact that petitioners conceded these adjustments gives

credence to the audit.

     Inasmuch as petitioners have not shown that respondent’s

deficiency determination was arbitrary or erroneous, or that the

determination was not supported by the proper foundation, it is

inappropriate for this Court to look behind the deficiency notice

to examine the basis for, or reasons behind, respondent’s

determination.     Weimerskirch v. Commissioner, 596 F.2d 358, 362

(9th Cir. 1979), revg. 67 T.C. 672 (1977); DeBoer v.
                              - 6 -

Commissioner, T.C. Memo. 1996-174.    The notice of deficiency,

therefore, is valid, and respondent’s determination is sustained.

     Reviewed and adopted as the report of the Small Tax Case

Division.



                                     Decision will be entered

                             for respondent.
