                         T.C. Memo. 2009-147



                       UNITED STATES TAX COURT



                LEE MICHAEL LAWSON, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 24205-07.              Filed June 23, 2009.



     Lee Michael Lawson, pro se.

     Randall G. Durfee and Michael W. Bentley, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     HALPERN, Judge:    By notice of deficiency dated September 13,

2007 (the notice), respondent determined deficiencies in, and

additions to, petitioner’s Federal income tax as follows:
                                - 2 -

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

 2002     $20,212         $5,054        To   be   computed        --
 2003      26,467          5,762        To   be   computed        $668
 2004      60,088         13,520        To   be   computed       1,745
 2005      53,671         12,076        To   be   computed       2,153

     Unless otherwise noted, section references are to the

Internal Revenue Code in effect for the years in issue, and Rule

references are to the Tax Court Rules of Practice and Procedure.

All dollar amounts have been rounded to the nearest dollar.

     The principal issues for decision are whether petitioner had

income from various sources during the years in issue and whether

he is liable for the section 6651(a)(1) additions to tax for

failing to file returns for the years in issue.         Respondent has

conceded the section 6651(a)(2) and 6654 additions to tax.

Petitioner bears the burden of proof.        See Rule 142(a).1   We must

decide as a preliminary matter whether one of respondent’s

exhibits is admissible into evidence.




     1
       Petitioner does not argue (nor could we find) that the
burden of proof shifts to respondent under either sec. 6201(d) or
sec. 7491(a). Both sections require as a prerequisite to
shifting the burden of proof a showing the taxpayer provided
records requested by the Commissioner and cooperated with his
examination. We have found infra that petitioner failed to
provide records or cooperate.
                               - 3 -

     Exhibit 24-R (Ex. 24-R) purports to be the transcript of a

deposition of petitioner in an Alaska State court action

captioned Lee Lawson v. Thomas K. Pope, et al., Case No. 1SI-04-

145CI (Alaska Super. Ct. closed Oct. 27, 2005) (Lawson v. Pope).

Petitioner testified that he was the plaintiff in a suit by that

name and that he gave several depositions in that case.

Nonetheless, in this case, when presented at trial with Ex. 24-R,

petitioner testified that he could not identify that transcript.

Respondent identified Ex. 24-R as a transcript of petitioner’s

deposition testimony in Lawson v. Pope through the testimony of

his witness, Revenue Agent Alex Medley, who conducted

respondent’s investigation of petitioner’s Federal income tax

liabilities for the years in issue.    Revenue Agent Medley

testified that he received Ex. 24-R from Bruce Weyhrauch, the

attorney who represented the defendant in Lawson v. Pope and who

conducted the deposition.   Respondent argues that Ex. 24-R is

relevant because petitioner’s testimony in the transcript

contradicts his testimony here that, during 2004 and 2005, he did

not own income-producing assets that are central to this case.

Respondent argues that petitioner’s testimony in the transcript

is not hearsay because it is either a prior statement by a

witness, see Fed. R. Evid. 801(d)(1), or an admission by a party-

opponent, see Fed. R. Evid. 801(d)(2).    Finally, respondent

argues that Revenue Agent Medley’s testimony is sufficient to
                                - 4 -

meet the requirement of authentication or identification set

forth in rule 901 of the Federal Rules of Evidence.   In

particular, respondent relies on the illustration in subdivision

(b)(4) of that rule, “Distinctive characteristics and the like”,

which lists factors that may satisfy the requirement of

sufficient authentication or identification:   “Appearance,

contents, substance, internal patterns, or other distinctive

characteristics, taken in conjunction with circumstances.”

     Petitioner’s deposition testimony in Ex. 24-R is relevant,

nonhearsay testimony.   In form and content it is a deposition of

petitioner in Lawson v. Pope.    Respondent’s witness, Revenue

Agent Medley, received it from Mr. Weyhrauch, the attorney who

deposed petitioner in Lawson v. Pope.    Petitioner admits that he

was deposed in that proceeding, and he did have an opportunity

while on the stand in this trial to review the transcript.    He

did not deny that it was a transcript of his deposition

testimony; he simply said he did not know.

     Rule 901(a) of the Federal Rules of Evidence provides that

“[t]he requirement of authentication or identification as a

condition precedent to admissibility is satisfied by evidence

sufficient to support a finding that the matter in question is

what its proponent claims.”   Rule 901 of the Federal Rules of

Evidence does not erect a particularly high hurdle, and that

hurdle may be cleared by circumstantial evidence.   The proponent
                                 - 5 -

is not required to rule out all possibilities inconsistent with

authenticity, or to prove beyond any doubt that the evidence is

what it purports to be.    United States v. Tin Yat Chin, 371 F.3d

31, 38 (2d Cir. 2004).    We are satisfied that Ex. 24-R is what it

purports to be; viz, a transcript of a deposition of petitioner

in Lawson v. Pope.   Ex. 24-R is received into evidence.

                          FINDINGS OF FACT

     At the time he filed the petition, petitioner resided in

Alaska.

     Petitioner did not file a Federal income tax return for any

year in issue.   He did not provide Revenue Agent Medley with any

records and did not cooperate with him during his investigation

of petitioner’s 2002 through 2005 Federal income tax liabilities.

Revenue Agent Medley prepared substitutes for returns for

petitioner for each of those years, reconstituting his income

from various sources and by various methods available to

respondent.

     During 2002 and 2003 petitioner worked for William G.

Shattenberg (Mr. Shattenberg).

     During 2004 and 2005, under the name “Lawson & Associates”,

petitioner owned and operated a grocery store and electrical

generating business in and around Port Alexander, Alaska.      During

those years, Lawson & Associates was a sole proprietorship, and

petitioner was the sole proprietor.      Petitioner acquired the
                                - 6 -

store and electrical generating facilities on February 27, 2004,

from Nelson L. Jodway.   Petitioner (under the name “Lawson and

Associates”) also acquired from Mr. Jodway real property subject

to a lease to the U.S. Coast Guard for use as a communications

site.    The U.S. Coast Guard paid Lawson & Associates $12,670 and

$13,115 in rent during 2004 and 2005, respectively.     AT&T Alascom

paid Lawson & Associates $36,775 and $44,130 for electricity

during 2004 and 2005, respectively.

     During 2002, 2003, 2004, and 2005 petitioner had signature

authority over and maintained a personal checking account No.

xxx-xxx7482 in his name at Wells Fargo Bank, N.A. (acct. No.

7482).    Deposits of $33,653, $53,483, and $27,745 were made into

that account during 2002, 2003, and 2004, respectively.     Those

deposits included deposits of $1,372 and $3,533, accompanied by

the annotation “State Of Ak Dol Credits”, during 2003 and 2004,

respectively.

     During 2003, 2004, and 2005, petitioner had signature

authority over and maintained a checking account No. xxx-xxx4553

in the name of Lee Lawson d/b/a Lawson & Associates at Wells

Fargo Bank, N.A. (acct. No. 4553).      Deposits of $3,362, $86,248,

and $99,436 were made into that account during 2003, 2004, and

2005, respectively.
                                  - 7 -

       Petitioner was entitled to Permanent Fund Dividends from the

State of Alaska but did not receive them because they were

garnished to pay child support or to pay tax debts.

                                 OPINION

I.    Introduction

       Petitioner assigns error to the notice, averring in support

of his assignment:      “The taxes they say I owe have already been

paid by another man.”      As petitioner makes clear on brief, his

position (which we reject) is that another individual, Tommy

Wells, was the owner of Lawson & Associates during 2004 and 2005

and properly taxable with respect to its income.      Petitioner

avers no other facts in the petition, but, at trial and on brief,

he made clear other challenges to the notice.      We shall address

what we believe to be his challenges.

II.    Deficiencies in Tax

       A.   2002

       In support of the notice, respondent shows an adjustment of

$50,901 for “Gross Sales”.      The explanation accompanying that

adjustment (and adjustments of $72,752, $118,735, and $111,994

similarly labeled for 2003, 2004, and 2005, respectively) states:

“In the absence of adequate records, your taxable income * * *

[has] been computed by reference to bank deposits and cash

payments * * *.      Thus, it is determined you had gross business

income in the * * * [amount] shown above.”      One of respondent’s
                                - 8 -

exhibits, Ex. 45-R, shows that, during 2002, there were three

bank accounts at Wells Fargo Bank, N.A., including acct. No.

7482, to which $33,653 was deposited, as found supra, and two

other accounts, accounts Nos. xxx-xxx6994 and xxx-xxx4815 (acct.

Nos. 6994 and 4815, respectively), to which respondent concedes

on brief no deposits were made that are includable in

petitioner’s gross income.2    Respondent’s application of the bank

deposits method accounts for only $33,653 of the total of $50,901

that respondent originally determined to be unreported income and

on which he based his deficiency for 2002.    While respondent asks

that we find that, during 2002, petitioner received $33,969 in

“wages” from Mr. Shattenberg, we shall treat that claim as being

limited to $33,653, given respondent’s concessions with respect

to acct. Nos. 6994 and 4815.    On brief, petitioner concedes:   “In




     2
       Respondent explains that, because petitioner failed to
file returns for the years in issue, respondent reconstructed his
income in part through an analysis of bank accounts over which
petitioner exercised signature authority. Taxpayers are required
to maintain records adequate to determine their Federal income
tax liability. See sec. 1.6001-1(a), Income Tax Regs. When a
taxpayer fails to maintain adequate records, the Commissioner is
entitled to reconstruct his income by any reasonable method.
E.g., Erickson v. Commissioner, 937 F.2d 1548, 1553 (10th Cir.
1991), affg. T.C. Memo. 1989-552. We have approved the
Commissioner’s use of the bank deposits and cash expenditures
method of recomputing income. E.g., Parks v. Commissioner, 94
T.C. 654, 658 (1990). Indeed: “A bank deposit is prima facie
evidence of income and respondent need not prove a likely source
of that income.” Tokarski v. Commissioner, 87 T.C. 74, 77
(1986).
                               - 9 -

2002 and 2003 the Petitioner did receive money from William

Shattenberg as earnings from a job where he worked for his boss.”

He claims, however, that he did not receive “wages”.     He

elaborates:   “Wages are paid to an employee.    Employee defined by

the IRC is an officer, employee or elected official of the United

States, a State or any political subdivision thereof, or the

District of Columbia.”   He argues that, since he is not an

employee as so defined, he is not “required by the IRS to report

his accumulated property to the IRS.”    Petitioner’s arguments

with respect to the meaning of the terms “wages” and “employee”

are meritless, tax-protester arguments.    See, e.g., Custer v.

Commissioner, T.C. Memo. 2008-266.     We accord them no weight.

     As we have stated, petitioner bears the burden of proof.3


     3
       This case involves unreported income, and barring
stipulation to the contrary the venue for appeal is the Court of
Appeals for the Ninth Circuit. See sec. 7482(b)(1)(A), (2). We
are therefore bound by a line of cases of the Court of Appeals
for the Ninth Circuit beginning with Weimerskirch v.
Commissioner, 596 F.2d 358 (9th Cir. 1979), revg. 67 T.C. 672
(1977), to which we defer in accordance with the doctrine of
Golsen v. Commissioner, 54 T.C. 742 (1970), affd. 445 F.2d 985
(10th Cir. 1971). E.g., Rodriguez v. Commissioner, T.C. Memo.
2009-92. The general rule established by that line of cases is
that, for the Commissioner to prevail in a case involving
unreported income, there must be some evidentiary foundation
linking the taxpayer with the alleged income-producing activity.
See Weimerskirch v. Commissioner, supra at 362. Although
Weimerskirch dealt specifically with illegal unreported income,
it is now well established that the Court of Appeals for the
Ninth Circuit applies the Weimerskirch rule in all cases of
unreported income where the taxpayer challenges the
Commissioner’s determination on the merits. E.g., Edwards v.
Commissioner, 680 F.2d 1268, 1270 (9th Cir. 1982) (Stating, in a
                                                    (continued...)
                             - 10 -

He has conceded that he worked for Mr. Shattenberg in 2002 and

was compensated for that work.   Section 61(a)(1) provides that

gross income includes compensation for services.   Petitioner has

failed to show that he received any less than $33,653 from Mr.

Shattenberg as compensation for services during 2002, and we

sustain respondent’s adjustment in that amount.4




     3
      (...continued)
case involving unreported income from an income-generating auto
repair business owned by the taxpayer: “We note, however, that
the Commissioner’s assertion of deficiencies are presumptively
correct once some substantive evidence is introduced
demonstrating that the taxpayer received unreported income.
Weimerskirch v. Commissioner, 596 F.2d 358, 360 (9th Cir.
1979).”); Petzoldt v. Commissioner, 92 T.C. 661, 689 (1989)
(“[T]he Ninth Circuit requires that respondent come forward with
substantive evidence establishing a ‘minimal evidentiary
foundation’ in all cases involving the receipt of unreported
income to preserve the statutory notice’s presumption of
correctness.”). Petitioner filed no returns for either 2002 or
2003, and he concedes that in 2002 and 2003 he did receive money
from Mr. Shattenberg as earnings from a job. Thus, independent
of the conclusions we draw from respondent’s analysis of bank
deposits and cash expenditures, discussed supra, respondent has
met his burden of showing that petitioner received unreported
income. Petitioner’s burden is to show that the unreported
income he received from Mr. Shattenberg was less than $33,653 for
2002 and, as discussed infra, $6,426 for 2003.
     4
       Because respondent claims on brief that during 2002 and
2003 petitioner received wages from Mr. Shattenberg, we assume
that he concedes that petitioner is not subject to self-
employment tax on the amounts he received from Mr. Shattenberg
during those years. If he does not, the parties can address any
dispute in the context of the Rule 155 computation.
                               - 11 -

     B.   2003

     In support of the notice, respondent shows the following

positive adjustments to petitioner’s income for 2003:

     Wages, Salaries and Tips, etc.            $6,426
     Other Income                               1,107
     Unemployment Compensation                  9,253
     Gross Sales                               72,752

     The explanation accompanying “Wages, Salaries and Tips,

etc.” states:    “From records and information available, it has

been determined that you received taxable wages in the amounts

[sic] shown from William G. Shattenberg, Form W-2.”     Petitioner

has failed to show that he received any less than $6,426 from Mr.

Shattenberg as wages during 2003, and we sustain respondent’s

adjustment in that amount.

     The explanation accompanying the adjustment of $1,107 for

“Other Income” describes that amount and adjustments of $919 and

$845 similarly labeled for 2004 and 2005, respectively, as

“taxable income from the Alaska Permanent Fund”.    Petitioner

testified that he was entitled to Permanent Fund Dividends from

the State of Alaska but did not receive them because they were

garnished to pay child support or to pay tax debts.     Payments

received under Alaska’s Permanent Fund Dividend Program are

subject to Federal income tax.    Jones v. Commissioner, T.C. Memo.

1989-616, revd. on another issue 927 F.2d 849 (5th Cir. 1991);

accord Greisen ex rel. Greisen v. United States, 831 F.2d 916,
                                - 12 -

920 (9th Cir. 1987).   Income payable to a person that is diverted

before its receipt to pay a personal obligation of that person is

still income to that person.    See Old Colony Trust Co. v.

Commissioner, 279 U.S. 716, 729 (1929); Vorwald v. Commissioner,

T.C. Memo. 1997-15.    Petitioner has agreed that he was entitled

to Alaska Permanent Fund Dividends and has failed to show that

his dividends were less than $1,107, $919, and $845 in 2003,

2004, and 2005, respectively.    Thus, petitioner has gross income

from that source in those amounts for those years.5

     The explanation accompanying the adjustment of $9,253 for

“Unemployment Income” describes that amount and an adjustment of

$5,888 similarly labeled for 2004 as “taxable unemployment income

* * * from the State of Alaska”.    We have found that deposits of

$1,372 and $3,533 were made into acct. No. 7482 during 2003 and

2004, respectively, accompanied by the annotation “State of Ak

Dol Credits”.   We infer that the term “Dol” is shorthand for

“Department of Labor and Workforce Development”, and we infer

further that the deposits in question represent unemployment

compensation petitioner received.    Gross income includes

unemployment compensation.   See sec. 85(a).   Petitioner states on

brief that he “cannot confirm” respondent’s proposed findings of

fact that he received $9,253 and $5,888 during 2003 and 2004,



     5
       See supra note 3 regarding respondent’s obligation under
the Weimerskirch line of cases.
                              - 13 -

respectively, as unemployment compensation from the Alaska

Department of Labor and Workforce Development.   Respondent

supports his proposed findings of fact by directing us to

exhibits comprising petitioner’s bank statements for acct. No.

7482 for 2003 and 2004.   While petitioner bears the burden of

proof, we are willing to assume that the Alaska Department of

Labor and Workforce Development was consistent in crediting all

2003 and 2004 unemployment compensation payments to acct. No.

7482.   Since our examination of those statements reveals total

deposits annotated “State of AK Dol Credits” of $1,372 and $3,533

for 2003 and 2004, respectively, we find that petitioner received

unemployment compensation in those amounts, and no more, for

those years.

     The explanation accompanying the adjustment of $72,752 for

“Gross Sales” is as stated supra in section II.A. of this report.

Ex. 45-R shows that the sum $72,752 encompasses deposits during

2003 into four Wells Fargo Bank, N.A., accounts, acct. Nos. 7482,

4553, 6994, and 4815.   Respondent concedes that only the deposits

into the first two accounts, totaling $56,845, include

petitioner’s unexplained gross income.   Moreover, given

respondent’s 2003 adjustments for wages, Alaska Permanent Fund

Dividends, and unemployment income totaling $8,905, respondent

concedes that the sum of the deposits to those first two accounts

constituting unexplained gross income is no greater than
                                - 14 -

$47,940.6    Petitioner offers no explanation for the $47,940 of

unexplained 2003 deposits to acct. Nos. 7482 and 4553; he has

failed to show error in respondent’s positive adjustment in his

income in that amount, and we sustain the adjustment in that

amount.

     C.     2004

     In support of the notice, respondent shows the following

positive adjustments to petitioner’s income for 2004:

         Other Income                                 $919
         Unemployment Income                         5,888
         Gross Income--Electric/Power Sales         62,237
         Gross Sales                               118,735

     Our discussion supra in section II.B. of this report

disposes of the first two items.

     The explanation accompanying the adjustment of $62,237 for

“Gross Income--Electric/Power Sales” describes that amount and an

adjustment of $57,245 similarly labeled for 2005 as follows:

     From records and information available it has been
     determined that you received taxable non-employee
     compensation in the amounts shown above from the
     sources listed below:

     Payer(s):                            2004      2005
     Port Alexander, Alaska,
       United States Coast Guard         $12,670   $13,115
     Alascom                             $36,775   $44,130
     First Bank in Ketchikan, Alaska     $12,792      --



     6
       Respondent has satisfied his burden under Weimerskirch v.
Commissioner, 596 F.2d 358 (9th Cir. 1979). See supra note 3.
                               - 15 -

     We have found payments to Lawson & Associates from the U.S.

Coast Guard and AT&T Alascom in the amounts described.      Those

findings result in part from respondent’s proposed findings of

fact (with which our findings are consistent).      Respondent has

proposed no finding with respect to the $12,792 payment labeled

“First Bank in Ketchikan, Alaska”.      We interpret respondent’s

failure to propose a finding of fact with respect to that payment

as respondent’s concession that the payment was not an item of

gross income to petitioner.    We find accordingly.

     Petitioner makes no claim that the payments from the U.S.

Coast Guard and AT&T Alascom are not items taxable to the

recipient; he argues only that Tommy Wells, not he, was the

recipient:    “The store and electrical plant were acquired by the

petitioner for Lawson and Associates owned by Tommy Wells.”

While both petitioner and Mr. Wells testified to that effect, we

found neither credible on the ownership issue.

     Mr. Wells could not say when he bought the Port Alexander

facility, how much he paid for it, or where he got the money to

pay for it.   Nor was he sure from whom he (allegedly) purchased

the facility.   Petitioner introduced into evidence Mr. Wells’s

amended Federal income tax returns for 2004 and 2005, which

report that Mr. Wells was the proprietor of Lawson & Associates.

Those returns, however, show a loss from Lawson & Associates for

each year (entitling Mr. Wells to claim refunds of previously
                              - 16 -

paid taxes).   Moreover, they were filed September 19, 2007, 6

days after the date of the notice, and Mr. Wells was vague and

unconvincing as to why he had not reported his involvement with

Lawson & Associates on his originally filed 2004 and 2005 Federal

income tax returns.   Petitioner also introduced into evidence a

copy of an expired business license for Lawson & Associates that

shows an original issue date of March 5, 2004, and an expiration

date of December 31, 2006.   While it also shows Mr. Wells as

owner, it does not specify when he became owner; indeed, he could

have become owner after 2005, the last year here in question, and

still have been covered by the license, which was valid until the

end of 2006.

     In contrast to Mr. Wells’s testimony, there is ample

evidence in the record to support our findings that, during 2004

and 2005, petitioner, as sole proprietor, under the name “Lawson

& Associates” owned and operated a general store and electrical

generating business in and around Port Alexander, Alaska, and

owned real property leased to the U.S. Coast Guard.   Among that

evidence is the following: a bill of sale naming petitioner as

the buyer of real and other property Lawson & Associates used; a

fax cover sheet to a real estate specialist with the U.S. Coast

Guard in which petitioner represents that he is the owner of the

property described in the bill of sale; a business account

application, dated September 10, 2003, that petitioner submitted
                              - 17 -

to Wells Fargo Bank, N.A., to open an account under the business

name “Lawson and Associates” (as “Sole Proprietor”), which

petitioner signed on a line that required that he enter his

“Position/Title”, which he did, in his own hand, as “owner”; and

records of Wells Fargo Bank, N.A., for the business bank account

of Lawson & Associates for a portion of 2003, all of 2004, and a

portion of 2005 that show the account name “Lee M Lawson DBA

Lawson and Associates”.   Finally, there is the transcript of

petitioner’s deposition in Lawson v. Pope in which petitioner

unequivocally testifies that in August 2003 he started Lawson &

Associates, on February 27, 2003, he bought from Mr. Jodway the

real estate leased to the U.S. Coast Guard, and on May 13, 2005,

he sold Lawson & Associates and associated property to Mr. Wells.

     Petitioner was the recipient of $12,670 and $13,115 paid by

the U.S. Coast Guard to Lawson & Associates during 2004 and 2005,

respectively.   Likewise, he was the recipient of $36,775 and

$44,130 paid by AT&T Alascom to Lawson & Associates during 2004

and 2005, respectively.   Those items are taxable to petitioner.7


     7
       We are aware that in the Lawson v. Pope deposition,
petitioner testified that he sold Lawson & Associates and
associated property to Mr. Wells on May 13, 2005. If that were
true, then he might not be taxable on all the 2005 receipts from
the U.S. Coast Guard and AT&T Alascom. That testimony is
contrary to his position in this case, however (i.e., that he
never owned Lawson & Associates), and Mr. Wells could not say
when (allegedly) he purchased Lawson & Associates. We give that
portion of the deposition little credit. Moreover, even if we
were to attempt some allocation of the 2005 receipts, it would
                                                   (continued...)
                                - 18 -

     The explanation accompanying the adjustment of $118,735 for

“Gross Sales” is as stated supra in section II.A. of this report.

Respondent again concedes that only deposits into acct. Nos. 7482

and 4553, totaling $113,993, remain unexplained and that

petitioner should be given credit against those deposits for

respondent’s adjustments for 2004 for Alaska Permanent Fund

Dividends, unemployment income, and the payments from the U.S.

Coast Guard, AT&T Alascom, and, we assume, First Bank in

Ketchikan, Alaska, totaling $66,689, leaving unexplained deposits

no greater than $47,304.     For the same reasons offered above for

the similar items, we shall sustain respondent’s adjustment in

that amount.

     D.     2005

     In support of the notice, respondent shows the following

positive adjustments to petitioner’s income for 2005:

         Other Income                                $845
         Gross Income--Electric/Power Sales        57,245
         Gross Sales                              111,994

     Our discussion supra in section II.B. of this report

disposes of the first item, and our discussion supra in section

II.C. disposes of the second item.



     7
      (...continued)
not reduce petitioner’s taxable income for the year, because any
reduction in his income attributable to those receipts would be
matched by an increase in his income attributable to unexplained
bank deposits.
                               - 19 -

       The explanation accompanying the adjustment of $111,994 for

“Gross Sales” is as stated supra in section II.A. of this report.

Respondent makes concessions similar to those for 2003 and 2004,

so that the amount of bank deposits remaining unexplained is

$41,346.    For the same reasons offered above for the similar

items, we shall sustain respondent’s adjustment in that amount.

III.    Additions to Tax

       Section 6651(a)(1) provides for an addition to tax in the

event a taxpayer fails to file a timely return (determined with

regard to any extension of time for filing) unless the taxpayer

shows that such failure is due to reasonable cause and not due to

willful neglect.    The amount of the addition is equal to 5

percent of the amount required to be shown as tax on the

delinquent return for each month or fraction thereof during which

the return remains delinquent, up to a maximum addition of 25

percent for returns more than 4 months delinquent.     Id.

       In pertinent part, section 7491(c) provides:   “the Secretary

shall have the burden of production in any court proceeding with

respect to the liability of any individual for any * * * addition

to tax”.    The Commissioner’s burden of production under section

7491(c) is to produce evidence that imposing the relevant

addition to tax is appropriate.    Swain v. Commissioner, 118 T.C.

358, 363 (2002).
                              - 20 -

     Respondent’s evidence shows that petitioner did not file

Federal income tax returns for any of the years in issue, and we

have found accordingly.   Respondent’s evidence also shows that,

for each of those years, petitioner had income sufficient to

require him to file a return, i.e., income above the standard

deduction and the exemption amount, and we so find.8   Respondent

has produced evidence that imposing the section 6651(a)(1)

additions to tax is appropriate.    See, e.g., Rodriguez v.

Commissioner, T.C. Memo. 2009-92.    Petitioner has failed to prove

that his failures to file are due to reasonable cause and not due

to willful neglect.

     Petitioner is liable for the section 6651(a)(1) additions to

tax that respondent determined, adjusted to take into account

respondent’s concessions and other relevant matters discussed in

this report.


                                           Decision will be entered

                                     under Rule 155.




     8
       Sec. 6012(a) requires every individual having gross income
exceeding a certain minimum amount to file an income tax return.
Petitioner’s gross income exceeded the standard deductions of
$4,700, $4,750, $4,850, and $5,000 and the exemption amounts of
$3,000, $3,050, $3,100, and $3,200 for 2002, 2003, 2004, and
2005, respectively. See sec. 151(d); Rev. Proc. 2001-59, sec.
3.07(1), 3.11(1), 2001-2 C.B. 623, 626; Rev. Proc. 2002-70, sec.
3.09(1), 3.15(1), 2002-2 C.B. 845, 848, 849; Rev. Proc. 2003-85,
sec. 3.10(1), 3.16(1), 2003-2 C.B. 1184, 1188; Rev. Proc.
2004-71, sec. 3.10(1), 3.17(1), 2004-2 C.B. 970, 973, 974.
