                        T.C. Memo. 2005-176



                      UNITED STATES TAX COURT



                 HAROLD A. LANGE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7178-03.             Filed July 19, 2005.


     Harold A. Lange, pro se.

     Beth A. Nunnink, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     GALE, Judge:   Respondent determined a deficiency of $8,301

and additions to tax of $2,075.25 and $443.40 under sections1

6651(a)(1) and 6654, respectively, with respect to petitioner



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

Harold A. Lange's (petitioner) Federal income tax for 2000.

After concessions by respondent, the issues remaining for

decision are:

     (1) Whether the Form 1040, U.S. Individual Income Tax

Return, submitted by petitioner with respect to the 2000 taxable

year constitutes a valid return, and consequently whether

petitioner is liable for an addition to tax under section

6651(a);

     (2) whether petitioner had $46,306 of gross income from

pension distributions, gambling winnings, and Social Security

benefits received in 2000;

     (3) whether petitioner is entitled to deductions for

gambling losses, charitable contributions, and certain closing

costs arising from a home mortgage refinancing greater than those

conceded by respondent;

     (4) whether petitioner is liable for an addition to tax

pursuant to section 6654.

                          FINDINGS OF FACT

     The parties have stipulated some of the facts, which are

incorporated herein by reference.   Petitioner lived in Tennessee

at the time the petition was filed.

     Petitioner's Form 1040

     On April 17, 2001, petitioner mailed a signed 2000 Form

1040, U.S. Individual Income Tax Return (2000 Form 1040), along
                               - 3 -

with a Schedule A, Itemized Deductions; two Forms 1099-R,

Distributions From Pensions, Annuities, Retirement or Profit-

Sharing Plans, IRAs, Insurance Contracts, etc.; and a Form W-2G,

Certain Gambling Winnings.   Attached to the front of the 2000

Form 1040 was a cover page which stated:

     This tax return is being filed under protest, without
     prejudice, for explanation, please see the attached 38
     page protest document and memorandum, marked and
     identified by its U.S. registered mail number. It is a
     federal crime under Title 18 U.S.C. to remove this
     protest document from the attached return, it is to
     remain a permanent part of the records with this
     return.

     As indicated on the foregoing cover page, a 38-page protest

document2 (protest document) was attached to the 2000 Form 1040.

In the "label" box on the front page of the 2000 Form 1040, the

phrase "Spouse's Social Security number" was lined through, and

in the space reserved for entry of a spouse's social security

number there was written "under protest without prejudice".    In

the jurat/signature box on the back page, immediately below

petitioner’s signature, the phrase, "Spouse's signature, if a

joint return, both must sign", had also been lined through and

replaced with the handwritten phrase, "under protest, without

prejudice".

     The 2000 Form 1040 reported $34,508 on line 7, "Wages

salaries, tips, etc.", $11,501 on line 20b, "Social security


     2
       The protest document had attached to it an additional 17-
page exhibit.
                                - 4 -

benefits, Taxable Amount".    Additionally, $1,000 was reported on

line 21, "Other income", and the word "lotto" was handwritten in

a blank space beside the number.    Thus, $47,009 was reported as

"total income" on line 22.    After claiming itemized deductions of

$12,111 and three exemptions, "Taxable income" was reported as

$26,498 on line 39.    Nonetheless, line 40 of the 2000 Form 1040,

"Tax", was left blank, and $0 was reported on line 57, "total

tax".    On line 69, "amount you owe," $4,563 was reported.3

     With respect to the 2000 taxable year, no payments of

estimated tax were made by petitioner, no tax was withheld, nor

was any payment sent with the 2000 Form 1040.

     In the protest document, petitioner states that he is filing

his return "by special appearance, 'under protest without

prejudice'".    In the document, petitioner makes various

arguments, contending, e.g., that he is not an "individual", as

that term is used in sections 1 and 3, that only government-

sourced consideration is subject to taxation, that private sector

employees should not be taxed at the same rate as public

employees, and that applying the tax rates of section 1 to him is




     3
       The entry of $4,563 as the amount owed is inexplicable
from the face of the return, since line 69, "amount you owe",
instructs the taxpayer that the entry thereon should be the
result of subtracting line 65, "total payments", from line 57,
"total tax", and both lines 57 and 65 were reported as $0 on the
return.
                                - 5 -

unconstitutional, constituting a "crime of extortion and

perjury".

     The protest document concludes by stating that unless the

Internal Revenue Service responds to the protest document and

rebuts each of the arguments raised, then the IRS "agrees to the

complete contents of this * * * [protest document], and will

raise no defenses to the contents, nor claim a tax liability

imposed under 26 U.S.C. §1 or 3, to be due and owing upon the

undersigned by your agency or in a court of law".    The document

further explains that "a failure to answer in rebuttal" by the

IRS will constitute agreement that the IRS "will not raise in

court, any defense or collateral attack on the issues of * * *

[petitioner's] position as to the procedures, facts, or law as

set forth herein".

     Pension Distributions

     Petitioner was retired during 2000.    In that year, he

received distributions from the National Electrical Benefit Fund

(NEBF) of $11,082 and the Electrical Workers Trust Fund (EWTF) of

$22,723.    These receipts were reported as fully taxable

distributions on Forms 1099-R by NEBF and EWTF.

     The NEBF’s plan summary provides that "all contributions to

the NEBF are made by covered employers.    Employees are neither

required nor permitted to make contributions".    According to the

plan, the employer contributes three percent of the covered
                                 - 6 -

employee's gross labor payroll.    The EWTF plan also provides that

"contributions by an employee shall not be permitted under the

Plan".   Under this plan, an employee's eligibility to receive

contributions is based upon his years of service, as defined

under the plan.

     Gambling Winnings and Losses

     Petitioner purchased a winning ticket and received $1,000 in

proceeds from the Kentucky Lottery Corporation in March 2000.

After obtaining the winning ticket in March, petitioner began

saving his (losing) tickets for the remainder of the year.    The

aggregate cost of those tickets was $851.   Petitioner claimed

$1,000 in gambling losses on the 2000 Form 1040.   Respondent now

concedes that petitioner had gambling losses of $851 in 2000.

     Social Security Benefits

     Petitioner received and cashed Social Security benefit

checks totaling $13,531 in 2000.

     Charitable Contributions

     Petitioner claimed $4,143 in charitable contribution

deductions on the 2000 Form 1040 he submitted but kept no records

regarding the claimed contributions.

     Home Mortgage Refinancing

     On March 27, 2000, petitioner refinanced the mortgage on his

residence.   In connection with the refinancing, petitioner paid

$337.50 in prepaid hazard insurance, $85.28 of interest due on
                                - 7 -

the mortgage loan being replaced, and various closing costs

totaling $948.95, described on the settlement sheet as follows:

     Loan origination fee 0.218%               $167.00
     Appraisal fee                              250.00
     Flood                                       17.00
     Attorney's fees                            391.00
     Recording fees                              32.00
     State tax/stamps                            87.95
     Computer filing fee                          4.00

     On Schedule A of the 2000 Form 1040, petitioner claimed an

itemized deduction for "closing costs on house" of $1,367.73, a

figure which closely approximates the $1,371.73 total of the

foregoing payments.4

     Notice of Deficiency

     After the 2000 Form 1040 was referred to three units of

respondent, a notice of deficiency was issued to petitioner for

the 2000 taxable year in which it was determined that petitioner

had failed to file a return and had taxable income of $39,831,5

resulting in a deficiency of $8,301 and additions to tax under

section 6651(a)(1) for failure to file and section 6654 for

failure to pay estimated tax.    Petitioner timely filed a petition

for redetermination.




     4
         The $4 discrepancy is not explained in the record.
     5
       This taxable income figure represented gross income of
$46,306 from pension distributions, Social Security benefits and
gambling winnings, less the standard deduction and a personal
exemption.
                               - 8 -

                              OPINION

I.    Burden of proof

      Petitioner has neither claimed nor shown entitlement to a

shift in the burden of proof to respondent with regard to any

factual issue pursuant to section 7491(a).   Accordingly,

petitioner bears the burden of proof and production with respect

to all issues in this case, except as provided in section

7491(c).   See Rule 142(a).

II.   Validity of the 2000 Form 1040 and Section 6651(a) Addition

      Respondent argues that the 2000 Form 1040 does not

constitute a valid return and that petitioner is therefore liable

under section 6651(a) for an addition to tax for failure to file.

      Section 6011(a) requires taxpayers to file returns in

accordance with the forms and regulations prescribed by the

Secretary.   See sec. 1.6011-1(a), Income Tax Regs.   In addition,

taxpayers are required to verify by written declaration that

their submitted returns have been made under penalties of

perjury.   Sec. 6065; see also sec. 1.6065-1(a), Income Tax Regs.

A taxpayer satisfies this requirement by signing the preprinted

jurat contained on the Form 1040, see Sloan v. Commissioner, 102

T.C. 137, 146-147 (1994), affd. 53 F.3d 799 (7th Cir. 1995),

which is a declaration under penalties of perjury that the return

is "true, correct, and complete".
                              - 9 -

     Even where the taxpayer fails to follow the prescribed

forms, a document will be treated as a valid return for purposes

of section 6651(a) if it satisfies the following: (i) It contains

sufficient data to calculate tax liability; (ii) it purports to

be a return; (iii) it represents an honest and reasonable attempt

to satisfy the requirements of the tax law; and (iv) it is

executed under penalties of perjury.     Beard v. Commissioner, 82

T.C. 766, 777 (1984), affd. 793 F.2d 139 (6th Cir. 1986).

     In determining the validity of a return, this and other

courts have generally held that alterations of the language of

the jurat itself invalidates a return.    See Hettig v. United

States, 845 F.2d 794, 795 (8th Cir. 1988) (per curiam); Mosher v.

Commissioner, 775 F.2d 1292, 1294 (5th Cir. 1985) (per curiam);

Borgeson v. United States, 757 F.2d 1071, 1073 (10th Cir. 1985)

(per curiam); United States v. Moore, 627 F.2d 830, 834 (7th Cir.

1980); Cupp v. Commissioner, 65 T.C. 68, 78-79, affd. without

published opinion 559 F.2d 1207 (3d Cir. 1977); Andrews v.

Commissioner, T.C. Memo. 1999-281; Hodge v. Commissioner, T.C.

Memo. 1998-242; Counts v. Commissioner, T.C. Memo. 1984-561,

affd. 774 F.2d 426 (11th Cir. 1985).

     Where statements are added that do not modify the specific

language of the jurat, the validity of the return depends upon

whether the additional statements disclaim liability or otherwise

qualify the jurat by casting doubt on the jurat's declaration
                              - 10 -

that the return is true, correct, and complete.   For example, the

mere addition near the jurat of the words "under protest" will

not invalidate the return.   See McCormick v. Peterson, 73 AFTR 2d

94-597, 94-1 USTC par. 50,026 (E.D.N.Y. 1993); see also Todd v.

United States, 849 F.2d 365, 367 (9th Cir. 1988) (addition of

words "signed involuntarily under penalty of statutory

punishment" below the jurat did not invalidate return).   However,

where the purported return refers to and includes an accompanying

statement that disclaims liability for the tax reported on the

return or appears to contradict the declarations in the jurat,

the return is invalid, as the accompanying statement vitiates the

jurat.   Williams v. Commissioner, 114 T.C. 136 (2000); Sloan v.

Commissioner, supra.   Doubts regarding whether the accompanying

statement has qualified the jurat so as to invalidate the return

are resolved in the Commissioner's favor.   Sloan v. Commissioner,

53 F.3d 799, 800 (7th Cir. 1995), affg. 102 T.C. 137.

     For example, in Sloan, the purported returns contained the

following statement after the preprinted jurat, immediately above

the taxpayer's signature, "Denial and Disclaimer attached as part

of this Form".   Attached to the purported returns was the

following statement:

     "I submit this 'Denial and Disclaimer' as an attachment
     to the IRS Form 1040 for the year stated above. I deny
     that I am liable or made liable for any '1040 income
     tax' for the above stated year. * * * My signature on
     the form is not an admission of jurisdiction or
     submission to subject status. I 'disclaim liability'
                               - 11 -

       for any tax shown on the form."   [Sloan v.
       Commissioner, 102 T.C. at 141.]

We concluded that the attached statement "[raised] serious

questions about whether petitioner [was] 'denying' the accuracy

of the information contained in the return, 'disclaiming' the

jurat altogether, or simply protesting the tax laws".       Id. at

145.    Consequently, we held that the return was invalid.    We

reached the same result in Williams v. Commissioner, supra, where

the extraneous entry was made as an asterisk to the "amount owed"

line on the return rather than near the jurat, and stated: "The

admitted liability is zero.    See attached Disclaimer Statement."

Id. at 138.    The attached statement provided:

       The above named taxpayer respectfully declines to
       volunteer concerning assessment and payment of any tax
       balance due on the return or any redetermination of
       said tax. Be it known that the above said taxpayer,
       therefore, denies tax liability and does not admit that
       the stated amount of tax on return is due and
       collectable. * * * [Id.]

Relying in part on Sloan, we concluded that the attached

statement rendered the return invalid, because it "called into

question the veracity, accuracy, and completeness" of the

purported return, thereby vitiating the jurat.       Id. at 142.

       Here, petitioner signaled the inclusion of a disclaimer

statement to the 2000 Form 1040 by means of an attached cover

page, which stated that the 2000 Form 1040 was being filed "under

protest, without prejudice" and that an explanation of the

protest-without-prejudice was contained in an "attached 38 page
                              - 12 -

protest document and memorandum".    The "under protest without

prejudice" phrase was also entered twice on the face of the

return, once in close proximity to the jurat.

     The protest document itself states various propositions,

including the claim that petitioner is not an "individual" within

the meaning of sections 1 and 3 (notwithstanding that the 2000

Form 1040 purports to be a "2000 U.S. Individual Income Tax

Return"), and that application of the tax rates in section 1 to

petitioner is unconstitutional.   Further, the protest document

concludes by asserting that unless respondent responds to the

document and rebuts each argument raised, then respondent "will

raise no defenses to the contents, nor claim a tax liability

imposed under 26 U.S.C. § 1 or 3, owing by the undersigned by

your agency or in a court of law".

     We find that the protest document disclaims liability and

tends to negate the declarations in the jurat.    Any voluntary

agreement to a tax liability in the jurat is expressly

conditioned in the protest document upon certain further actions

by respondent.   Moreover, the assertion in the protest document

that petitioner is not an "individual" for purposes of sections 1

and 3 contradicts any purported self-assessment of his liability

made on the face of the 2000 Form 1040, which by its terms is a

form for reporting Federal income tax of an individual.    At a

minimum, the protest document raises substantial doubts that
                                  - 13 -

petitioner affirms the veracity, accuracy, and completeness of

the return, as declared in the jurat.       Following Williams and

Sloan, we therefore hold that the 2000 Form 1040 is not a valid

return, as the jurat has been vitiated by an accompanying

statement.       The declarations in the protest document produce just

the kind of "guessing game" about the document's import that we

refused to require the Commissioner to undertake in Sloan and

Williams.6

       Moreover, as was the case in Williams, the 2000 Form 1040

herein would also fail at least two parts of the four-part test

of a valid return enunciated in Beard v. Commissioner, 82 T.C. at

777.       First, because the jurat has been vitiated, the 2000 Form

1040 has not been executed under penalties of perjury.      Second,

we conclude that the 2000 Form 1040 does not represent an honest

and reasonable attempt to satisfy the requirements of the tax

law.       Petitioner's contention in the protest document that he is

not an "individual" as that term is used in sections 1 and 3 is

frivolous.       While items of income are reported and taxable income

is purportedly computed, the entries on the lines for "tax" and

"total tax" are blank and $0, respectively.       Inexplicably, after

reporting both "total tax" and "total payments" as $0, petitioner


       6
       We note that the 2000 Form 1040 was considered by three
units of respondent before respondent concluded that the document
could not serve as the basis for assessing any Federal income tax
liability for petitioner for 2000.
                                - 14 -

entered $4,563 as the "amount owed", even though this last figure

should be the difference between the first two.    We conclude that

these entries were made in bad faith, exemplifying petitioner's

misguided efforts to disclaim liability for tax.

       We accordingly sustain respondent's determination that

petitioner is consequently liable for an addition to tax pursuant

to section 6651(a) for failure to file.

III.    Gross Income

       Respondent determined that petitioner had gross income of

$46,306 in 2000, consisting of pension distributions from NEBF

and EWTF, gambling winnings, and Social Security benefits.

       A.   Pension Distributions

       With respect to the pension distributions, petitioner

stipulated that he received $11,082 from NEBF and $22,723 from

EWTF in 2000 and respondent determined that these amounts were

includible in petitioner's gross income.    Pension disbursements

are generally includible in gross income under section 61(a)(11).

However, disbursements of employee contributions to a pension

plan constitute a nontaxable return of capital.    See Ashman v.

Commissioner, T.C. Memo. 1998-145; Knight v. Commissioner, T.C.

Memo. 1989-219.     At trial, petitioner appeared to argue that the

pension disbursements received were derived from employee

contributions since the amounts contributed by his employers were

determined by the number of hours he worked.    Petitioner's
                               - 15 -

argument misconstrues the nature of an employee contribution,

however.    The pension plans for NEBF and EWTF each prohibit

employee contributions.    We are persuaded that no portion of the

pension disbursements at issue constituted the return of an

employee contribution and consequently sustain respondent's

determination.

     B.    Gambling Winnings

     Respondent determined that the $1,000 lottery proceeds

received by petitioner in 2000 were includible in gross income as

gambling winnings.    Lottery proceeds are gambling winnings,

taxable under section 61(a).    See, e.g., Solomon v. Commissioner,

25 T.C. 936 (1956); Rusnak v. Commissioner, T.C. Memo. 1987-249.

Petitioner makes a series of arguments on brief concerning the

nature of "income" for Federal income tax purposes that do not

persuade us of any error in respondent's determination.

Accordingly, respondent's determination is sustained.

     C.    Social Security Benefits

     Respondent determined that $11,501 of the $13,531 in Social

Security benefits received by petitioner in 2000 was includible

in his gross income for that year.7



     7
       On brief, respondent erroneously states that the
includible portion is the total amount of benefits received
($13,531) rather than 85 percent of that amount ($11,501) as
determined in the notice of deficiency. See sec. 86 (a)(2),
(c)(1) and (2).
                                 - 16 -

      Because petitioner had $34,805 of adjusted gross income in

2000 (per our redetermination thus far), he was required to

include 85 percent of the Social Security benefits in gross

income.    See sec. 86(a)(2), (c)(1) and (2).

      The only argument petitioner advances in challenging

respondent's determination is that he attempted to surrender his

Social Security card and instructed the Social Security

Administration to return his contributions.      Petitioner conceded,

however, that he cashed all Social Security benefit checks he

received.    On this record, we sustain respondent's determination

to include $11,501, 85 percent of the $13,531 of Social Security

benefits received, in petitioner's gross income for 2000.

IV.   Deductions

      A.    Gambling Losses

      Section 165(d) provides that losses from wagering

transactions may be deducted to the extent of gains from such

transactions.      The burden of substantiating wagering loss

deductions by keeping sufficient records of such deductions is on

the taxpayer.      Mayer v. Commissioner, T.C. Memo. 2000-295, affd.

29 Fed. Appx. 706 (2d Cir. 2002); Mack v. Commissioner, T.C.

Memo. 1969-26, affd. 429 F.2d 182 (6th Cir. 1970); sec. 6001;

sec. 1.6001-1(a), Income Tax Regs.

      Petitioner produced losing lottery tickets for 2000 totaling

$851, and respondent now concedes that he had wagering losses in
                                - 17 -

that amount.     Petitioner's unchallenged testimony at trial was

that he purchased the same amount of lottery tickets each week,

at a cost of approximately $80 per month, and that he began

saving his (losing) tickets after he won the $1,000 in March

2000.     The $851 total for the tickets purchased from March

through December 2000 corroborates petitioner's testimony.

Petitioner's testimony is unimpeached and should not be

disregarded.     See Loesch & Green Constr. Co. v. Commissioner, 211

F.2d 210, 212 (6th Cir. 1954).     We accordingly conclude that

petitioner has provided reasonable evidentiary support for

invocation of the Cohan rule, and find that he had additional

gambling losses of $160 in January and February of 2000.     See

Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930);

Vanicek v. Commissioner, 85 T.C. 731, 743 (1985).     These losses

fully offset the gambling winnings for 2000, but are not further

deductible.     See sec. 165(d); see also Offutt v. Commissioner, 16

T.C. 1214 (1951).

        B. Charitable Contribution Deductions

        Section 170 provides that charitable contributions may be

deducted from gross income "if verified under regulations

prescribed by the Secretary".     Under the regulations, a taxpayer

must maintain records of each contribution, such as a canceled

check, a receipt, or other reliable records from the charitable

organization.     Sec. 1.170A-13(a)(1), Income Tax Regs.
                               - 18 -

     Petitioner claimed $4,143 in charitable contribution

deductions on the 2000 Form 1040, yet conceded at trial that he

had no records to substantiate any amount.    Although petitioner

testified in very vague terms about having made gifts of clothing

and cash to the Salvation Army, his testimony provides no basis

on which we might make even a guess at the actual amount donated.

See Vanicek v. Commissioner, supra.     We accordingly conclude that

petitioner is not entitled to any deduction for charitable

contributions in 2000.

     C.    Closing Costs for Mortgage Refinancing

     Petitioner claimed an itemized deduction of $1,367.73 for

"closing costs" on the 2000 Form 1040, representing amounts he

paid in 2000 in connection with refinancing the mortgage on his

residence.    The parties now agree that $85.28 of this figure

represents home mortgage interest, and respondent has conceded

petitioner's entitlement to deduct that amount.     Respondent

maintains that petitioner is not entitled to any additional

amount.    These amounts consist of $337 of prepaid hazard

insurance and $948.95 in other closing costs that petitioner paid

in connection with the refinancing, as itemized in our findings

of fact.

     As for the prepaid hazard insurance, the cost of insuring a

dwelling owned and occupied by a taxpayer as a personal residence
                              - 19 -

is not deductible.   Sec. 1.262-1(b)(2), Income Tax Regs.   Thus,

petitioner is not entitled to deduct the foregoing amount.8

     Also included in the closing costs that petitioner seeks to

deduct is a $167 "loan origination fee", which is further

described on the settlement sheet as "0.218%".   Petitioner has

offered no evidence concerning whether this amount represents

prepaid interest or instead a payment for services rendered by

the financial institution that provided the financing.   Thus,

this amount is not deductible as interest under section 163.

Goodwin v. Commissioner, 75 T.C. 424, 440-442 (1980), affd. 691

F.2d 490 (3d Cir. 1982); Wilkerson v. Commissioner, 70 T.C. 240,

253 (1978), revd. on another issue 655 F.2d 980 (9th Cir. 1981);

Enoch v. Commissioner, 57 T.C. 781, 794-795 (1972); Cao v.

Commissioner, T.C. Memo. 1994-60, affd. 78 F.3d 594 (9th Cir.

1996); Dozier v. Commissioner, T.C. Memo. 1982-569.

     Since petitioner has failed to show that the loan

origination fee is interest, it falls into the same category as

the bulk of the remaining closing costs that he seeks to deduct;

namely, the $250 appraisal fee, the $391 attorney's fee, and the



     8
       Petitioner also seeks to deduct $17 listed on the
settlement sheet as for "flood". Other than the settlement
sheet, petitioner offered no evidence concerning what the "flood"
item represents. Given the evidence, we conclude that the item
is either flood insurance, in which case it is not deductible
under the authority cited above, or it is something else, not
deductible for lack of proof concerning the nature of the
expenditure.
                               - 20 -

$4 "computer filing fee".    All are costs for services rendered in

connection with obtaining the refinancing and are not currently

deductible.9   See, e.g., Goodwin v. Commissioner, supra, at 440-

441; Trivett v. Commissioner, T.C. Memo. 1977-161, affd. 611 F.2d

655 (6th Cir. 1979).

     The remaining closing costs that petitioner seeks to deduct

are described in the settlement sheet as $32 in "Recording Fees"

and $87.95 in "State tax/stamps".    State and local transfer and

recordation taxes are not deductible expenses.    Gibbons v.

Commissioner, T.C. Memo. 1976-125.

V.   Section 6654 Addition to Tax

     Respondent determined that petitioner was liable for an

addition to tax pursuant to section 6654 for failure to pay

estimated tax.    Under section 7491(c), respondent bears the

burden of production with respect to petitioner's liability for

an addition to tax.    Once respondent has met that burden, it is

petitioner's burden to show exculpatory factors such as

reasonable cause or that respondent's determination is

incorrect.     See Higbee v. Commissioner, 116 T.C. 438, 446-447

(2001).




     9
       In the circumstances of this case, we need not decide
whether any portion of the closing costs is amortizable over the
life of the refinancing loan, as there is no evidence concerning
the loan's term nor proof that the proceeds of the loan were used
for business or investment rather than personal purposes.
                             - 21 -

     We have sustained respondent's determinations that

petitioner had gross income of $46,306 in 2000.    Petitioner

admitted on the 2000 Form 1040 that no estimated taxes were paid

nor was any tax withheld with respect to 2000.     The information

returns of NEBF, EWTF, and the Kentucky Lottery Corporation

likewise corroborate that no tax was withheld with respect to

petitioner's pension disbursements and lottery winnings.       We

accordingly conclude that respondent has met his burden of

production with respect to the section 6654 addition.     As

petitioner's only argument is that "there is no longer

legislation which authorizes" the section 6654 addition to tax,

we sustain respondent's determination.

VI. Conclusion

     We have considered all remaining arguments made by the

parties for contrary holdings and, to the extent not addressed,

find them to be irrelevant, moot, or meritless.

     To reflect the foregoing,


                                      Decision will be entered

                                 under Rule 155.
