                         T.C. Memo. 2000-252



                      UNITED STATES TAX COURT



              ROBERT CONRAD EANES II, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10966-99.                      Filed August 10, 2000.



     Robert Conrad Eanes II, pro se.

     Fred E. Green, Jr., for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     MARVEL, Judge:   Respondent determined the following

deficiencies and additions to tax with respect to petitioner’s

Federal income taxes:1



     1
      All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure. Monetary amounts are
rounded to the nearest dollar.
                              - 2 -

                                      Additions to tax1
                                 Sec.          Sec.      Sec.
     Year       Deficiency    6651(a)(1)    6651(a)(2)   6654
     1990         $3,667         $917                    $240
     1991         14,457        3,614                     826
     1992         11,122        2,781                     485
     1993          9,639        2,410                     404
     1994          4,237        1,059                     220
     1995         16,721        4,180                     907
     1996          6,529        1,469          $653       348
     1997         22,273        5,011           891     1,192
     1
      In his answer, respondent conceded the additions to tax
under sec. 6651(a)(2) and claimed increased additions to tax
under sec. 6651(a)(1) for 1996 and 1997 of $1,632 and $5,568,
respectively.

     After concessions,2 the issues for decision are (1) whether

petitioner is liable for self-employment tax for each year at

issue except 1996; (2) whether petitioner is liable for additions

to tax for failure to file returns for each year at issue

pursuant to section 6651(a)(1); and (3) whether petitioner is

liable for additions to tax for failure to make estimated tax

payments for each year at issue except 1994 and 1996 pursuant to

section 6654.



     2
      Prior to trial, petitioner and respondent entered into a
stipulation of settled issues, wherein petitioner conceded
deficiencies, without regard to self-employment tax, of $829 for
1990, $4,222 for 1991, $2,419 for 1992, $1,841 for 1993, $5,204
for 1995, $13 for 1996, and $6,337 for 1997. The parties agree
there is no deficiency in income tax due from petitioner for
1994, without regard to self-employment tax, and that petitioner
is not liable for self-employment tax for 1996. At trial,
petitioner orally conceded that he received self-employment
income during the years at issue but asserted that he was not
liable for the self-employment tax on that income. Petitioner
also conceded all remaining matters in dispute, except for the
issues for decision in this opinion.
                              - 3 -

                        FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.    We

incorporate the stipulation of facts by this reference.

     Petitioner Robert Conrad Eanes II resided in Henderson,

Nevada, at the time the petition was filed.   During the years at

issue, petitioner was self-employed and earned Schedule C, Profit

or Loss From Business, income in amounts sufficient to require

the filing of a Federal income tax return for each year at issue.

Petitioner, however, did not file a Federal income tax return or

an application for extension of time to file his Federal income

tax returns for any of the years at issue.

     Using payor information returns (Forms 1099), respondent

reconstructed petitioner’s self-employment income and determined

that petitioner is liable for self-employment taxes as follows:

                          Net earnings
             Sch. C           from            Self-employment
    Year     income      self-employment            tax

    1990     $15,895         $14,679              $2,246
    1991      46,477          42,922               6,567
    1992      38,749          35,785               5,475
    1993      35,394          32,686               5,001
    1994      18,444          17,033               2,606
    1995      53,671          49,565               7,583
    1996      26,595          24,560               3,758
    1997      68,000          62,798               9,608

Respondent issued a notice of deficiency for 1990 through 1993 on

March 19, 1999, and a notice of deficiency for 1994 through 1997

on March 24, 1999.
                                          - 4 -

       Prior to trial, respondent prepared and stipulated the

following revised computations of petitioner’s net earnings from

self-employment as well as the income tax deficiencies and

additions to tax allegedly owed by petitioner for all years at

issue:3

         Revised net                           Revised          Additions to
        earnings from    Revised self-       deficiencies       tax (revised)
Year   self-employment   employment tax     (incl. SE tax)   Sec.6651    Sec. 6654


1990       $11,642          $1,645             $2,474          $619        $163
1991        32,336           4,569              8,791         2,198         506
1992        23,705           3,349              5,768         1,442         252
1993        19,723           2,787              4,628         1,157         194
1994         2,063             291                291           100           0
1995        38,530           5,444             10,648         2,662         581
1996             0               0                 13            13           0
1997        43,682           6,172             12,509         3,127         674


                                      OPINION

Self-Employment Tax

       The first Social Security Act, ch. 531, 49 Stat. 620 (1935),

was enacted as part of a program to provide retirement benefits

to qualifying individuals who no longer were employed.                    Today,

such benefits are funded primarily from taxes paid by employers,

employees, and self-employed individuals under the Federal

Insurance Contributions Act (FICA), ch. 736, 68A Stat. 415

(1954), and the Self-Employment Contributions Act of 1954 (SECA),

ch. 736, 68A Stat. 353.         See secs. 3101-3128, 1401-1403.


       3
      Respondent stipulated that petitioner had Schedule C,
Profit or Loss From Business, income of $20,250, Schedule C
expenses of $20,050, and no liability for self-employment tax for
1996.
                                - 5 -

     Section 1401 imposes a tax on the self-employment income of

every individual for old age, survivors, disability insurance,

and hospital insurance.    See sec. 1401(a) and (b); Beachy v.

Commissioner, T.C. Memo. 2000-125; Greene v. Commissioner, T.C.

Memo. 2000-26; sec. 1.1401-1(a), Income Tax Regs.     Self-

employment income “means the net earnings from self-employment

derived by an individual”.   Sec. 1402(b).    Net earnings from

self-employment “means the gross income derived by an individual

from any trade or business carried on by such individual, less

the deductions allowed by this subtitle which are attributable to

such trade or business”.   Sec. 1402(a); see also sec. 1.1402(a)-

1, Income Tax Regs.   Self-employment tax is assessed and

collected as part of the income tax, must be included in

computing any income tax deficiency or overpayment for the

applicable tax period, and must be taken into account for

estimated tax purposes.    See sec. 1.1401-1(a), Income Tax Regs.

     Petitioner does not dispute that he received self-employment

income as determined by respondent.     Petitioner disputes only

whether he is required to pay self-employment tax.     Petitioner

contends that since self-employment tax is merely a

“contribution”, he may choose whether or not to pay it.

According to petitioner, a contribution is a voluntary payment.

Petitioner bears the burden of proving that respondent’s
                                - 6 -

determinations are erroneous.     See Rule 142(a); Welch v.

Helvering, 290 U.S. 111, 115 (1933).4

     Petitioner’s argument focuses on the use of the word

“contributions” in SECA’s title and relies upon what petitioner

claims is its plain meaning.    Petitioner’s argument is misplaced.

Webster’s Collegiate Dictionary defines “contribution”, among

other things, as “a payment (as a levy or tax) imposed by

military, civil, or ecclesiastical authorities [usually] for a

special or extraordinary purpose”.      Webster’s Collegiate

Dictionary 252 (10th ed. 1997).    The use of the term

“contributions” in SECA’s title is consistent with the definition

cited above.   Self-employment tax is a tax imposed by the United

States Government for a special purpose; i.e., to fund Social

Security and hospital insurance benefits.      The taxation regime

established by SECA has been upheld as constitutional.      See Cain

v. United States, 211 F.2d 375 (5th Cir. 1954); Egan v.

Commissioner, T.C. Memo. 1980-560, affd. without published

opinion (9th Cir. 1982).

     Section 1401 imposes a tax on income earned from self-

employment in order to fund the payment of Social Security and



     4
      Although respondent claimed increased additions to tax
under sec. 6651(a)(1) in his answer, as to which he bears the
burden of proof, see Rule 142(a), the issue is moot since
respondent has conceded that petitioner’s liability for the sec.
6651(a)(1) addition to tax for 1996 and 1997 is lower than that
determined in the notice of deficiency.
                                 - 7 -

hospital insurance benefits to self-employed persons.   The

obligation to pay self-employment tax is mandatory if the

requirements of section 1401 are met as they are in this case.

We hold, therefore, that petitioner is liable for self-employment

tax as modified by respondent.

Additions to Tax Under Section 6651(a)(1)

     Section 6651(a)(1) authorizes the imposition of an addition

to tax for failure to file a timely return, unless it is shown

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

willful neglect.   See sec. 6651(a)(1); United States v. Boyle,

469 U.S. 241, 245 (1985); United States v. Nordbrock, 38 F.3d

440, 444 (9th Cir. 1994); Harris v. Commissioner, T.C. Memo.

1998-332.   A failure to file a timely Federal income tax return

is due to reasonable cause if the taxpayer exercised ordinary

business care and prudence and, nevertheless, was unable to file

the return within the prescribed time.   See sec.

301.6651-1(c)(1), Proced. & Admin. Regs.    Willful neglect means a

conscious, intentional failure to file or reckless indifference

toward filing.   See United States v. Boyle, supra.

     Petitioner concedes he did not file Federal income tax

returns or applications for extensions of time to file for 1990

through 1997.    Petitioner contends that he did not file returns

because he did not have money to pay the taxes he owed at the

time the returns were due, and it was his understanding that the
                               - 8 -

returns and the taxes owed had to be submitted simultaneously.

Petitioner states that he “never had any willful intent not to

file” and that he “knew that * * * [he] was going to have to

file”.

     A taxpayer’s inability to pay Federal income taxes does not

constitute reasonable cause for failure to file a timely return.

See Stokes v. Commissioner, T.C. Memo. 1989-661 (citing Fitch v.

Commissioner, T.C. Memo. 1975-36); see also Jones v.

Commissioner, 25 T.C. 1100, 1106 (1956), revd. on another issue

259 F.2d 300 (5th Cir. 1958); Sanders v. Commissioner, 21 T.C.

1012, 1019-1020 (1954).   Since petitioner introduced no evidence

of any legitimate reason for his failure to file timely returns,

we hold that he did not have reasonable cause for his failure to

file as required by section 6651(a)(1) and that, therefore,

petitioner is liable for the additions to tax as revised by

respondent.

Section 6654 Addition to Tax

     Section 6654(a) imposes an addition to tax in the case of

any underpayment of estimated tax by an individual.    Sec.

6654(a).   Unless a statutory exception applies, the addition to

tax under section 6654(a) is mandatory.   See sec. 6654(a), (e);

Recklitis v. Commissioner, 91 T.C. 874, 913 (1988); Grosshandler

v. Commissioner, 75 T.C. 1, 20-21 (1980); see also Estate of

Ruben v. Commissioner, 33 T.C. 1071, 1072 (1960) (“This section
                                - 9 -

has no provision relating to reasonable cause and lack of willful

neglect.   It is mandatory and extenuating circumstances are

irrelevant.”)    None of the statutory exceptions under section

6654(e) applies in this case.

     Respondent determined that petitioner is liable for an

addition to tax under section 6654 for each tax year at issue.

He subsequently conceded, however, that petitioner is not liable

for the addition to tax under section 6654 for 1994 and 1996.

Petitioner conceded at trial that he did not make any payments of

estimated tax.    Since petitioner was required to make estimated

tax payments for all of the years at issue except 1994 and 1996

and he failed to do so, respondent’s determination as modified is

sustained.

     To reflect the foregoing and the concessions of the parties,



                                             Decision will be entered

                                        under Rule 155.
