                  T.C. Summary Opinion 2005-18



                     UNITED STATES TAX COURT



               ALBERT JAMES LAWLESS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18393-03S.            Filed February 23, 2005.



     Albert James Lawless, pro se.

     Sara J. Barkely, for respondent.



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

the provisions of section 7463 of the Internal Revenue Code in

effect at the time that the petition was filed.1    The decision to




     1
        Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for 1998,
the taxable year in issue, and all Rule references are to the Tax
Court Rules of Practice and Procedure. All monetary amounts are
rounded to the nearest dollar.
                                    - 2 -

be entered is not reviewable by any other court, and this opinion

should not be cited as authority.

       Respondent determined a deficiency in petitioner’s Federal

income tax for the taxable year 1998 of $25,394, as well as an

addition to tax under section 6651(a)(1) of $5,117, an addition

to tax under section 6651(a)(2) of $5,686, and an addition to tax

under section 6654 of $1,147.

       After concessions by the parties,2 the issues for decision

are:       (1)   Whether the statute of limitations bars the assessment

of the deficiency; if the statute of limitations is not a bar,

(2) whether petitioner is liable for the addition to tax for

failure to timely file under section 6651(a)(1).3

Background

       Some of the facts have been stipulated, and they are so

found.      We incorporate by reference the parties’ stipulation of

facts and accompanying exhibits.



       2
        Respondent concedes the additions to tax under secs.
6651(a)(2) and 6654. Petitioner concedes certain adjustments in
the notice of deficiency; specifically, that he received the
following items of income: (1) Wages of $24,906; (2) interest
income of $1,367; and (3) dividends of $5,744. The parties agree
that petitioner received a taxable distribution from his
individual retirement account in the amount of $23,968, rather
than $54,290, as determined in the notice of deficiency.
       3
        In the notice of deficiency, respondent determined that
petitioner failed to report capital gains of $1,641. Petitioner
did not raise this issue in his pleadings, nor did he address it
at trial. Accordingly, this issue is deemed conceded by
petitioner. Rules 34(b)(4), 142(a).
                                - 3 -

     At the time that the petition was filed, petitioner resided

in Boulder, Colorado.

     For the taxable year 1998, petitioner received an extension

of time to file his Federal income tax return (return) by August

15, 1999.   Petitioner did not file a return by that date.

     On December 9, 2002, respondent prepared a substitute return

for petitioner’s 1998 taxable year after determining that

petitioner failed to file a return for 1998.   In the spring of

2003, respondent’s Memphis Service Center contacted petitioner

requesting that he file a 1998 return.

     In response, petitioner mailed to respondent a purported

copy of his 1998 return, bearing his and his wife’s signatures,

dated September 3, 1999.   On July 10, 2003, respondent’s Memphis

Service Center received and filed this return as petitioner’s

1998 return.   On the return, petitioner claimed a refund of $87,

but he did not receive a refund check, nor did he contact

respondent about such refund.   On the top of the return,

petitioner handwrote, “DO NOT FILE - copy of previous return”.

     Petitioner filed his individual Colorado State income tax

return for 1998 on July 2, 2003.

     On August 1, 2003, respondent issued to petitioner a notice

of deficiency for 1998.4


     4
        Apparently, respondent issued the notice of deficiency
based on the substitute return although respondent’s Memphis
                                                   (continued...)
                              - 4 -

     Petitioner timely filed with the Court a petition

challenging the notice of deficiency.   Paragraph 4 of the

petition states:

     A copy of my 1998 return was mailed when requested,
     summer of 2003. Original return was filed 9-3-99. The
     statute of limitations had expired prior to the request
     for a copy. Notice of deficiency noted math errors and
     a balance due.

Discussion

A.   Statute of Limitations

     We must first decide whether the statute of limitations bars

the assessment of the deficiency in issue.    In doing so, we must

decide when petitioner filed his return.

     Generally, an income tax must be assessed within 3 years

after the applicable return is filed (whether or not such return

was filed on or after the date prescribed).   Sec. 6501(a).   The

bar of the statute of limitations on assessment is an affirmative

defense, and the party raising it must specifically plead it and

carry the burden of proving its applicability.   Rules 39, 142(a).

If the taxpayer makes a prima facie case proving the filing date

of his or her income tax return and the expiration of the

statutory period prior to the mailing of the notice of

deficiency, the burden of going forward with the evidence shifts


     4
      (...continued)
Center had received and filed a copy of petitioner’s return on
July 10, 2003. Although petitioner and his wife filed a joint
return for 1998, respondent mailed the notice of deficiency only
to petitioner.
                                - 5 -

to respondent.   Robinson v. Commissioner, 57 T.C. 735, 737

(1972).   The burden of proof, i.e., the burden of ultimate

persuasion, however, always remains with the party who pleads

that the assessment is barred by the statute of limitations.

Adler v. Commissioner, 85 T.C. 535, 540 (1985).

     Petitioner contends that he filed his return on September 3,

1999, and that the period of limitations ordinarily would have

expired on September 3, 2002.   Petitioner testified at trial

that, as a matter of personal habit, on the night he completes a

return, he signs and dates it, he has his wife sign and date it,

he makes a copy of it at the copy store, and then mails it at the

local post office.   With regard to his 1998 return, petitioner

asserts that he and his wife signed it on September 3, 1999, that

he made a copy of it, and that he mailed it at the local post

office by regular mail on the same day.   Petitioner further

asserts that he learned that respondent did not receive his

return only when respondent’s Memphis Service Center contacted

him in the spring of 2003, at which time petitioner mailed

respondent a copy of his return.5   In contrast, respondent’s

records show that respondent first received and filed

petitioner’s 1998 return on July 10, 2003.




     5
        We find it remarkable that petitioner never contacted
respondent regarding the refund he claimed on the return
allegedly submitted in September 1999.
                               - 6 -

     Under certain circumstances, this Court may accept the

credible testimony of witnesses regarding the preparation and

mailing of a tax return when the Commissioner’s records do not

show receipt of a return and the taxpayer cannot provide any

documentary evidence of the filing of such return.   See

Sorrentino v. IRS, 383 F.3d 1187, 1193-1194 (10th Cir. 2004);

Estate of Wood v. Commissioner, 92 T.C. 793, 796-798 (1989)

(testimony of postal employee who affixed postmark to return),

affd. 909 F.2d 1155 (8th Cir. 1990); Mitchell Offset Plate Serv.,

Inc. v. Commissioner, 53 T.C. 235, 239-240 (1969) (testimony of

corporation’s shareholders and its accountants).   However, a

taxpayer’s own testimony concerning his or her habit regarding

the preparation and mailing of his or her returns is not

sufficient by itself.   See Longazel v. Commissioner, T.C. Memo.

1994-487; Duralia v. Commissioner, T.C. Memo. 1994-269.

     Based on the entirety of the record, petitioner’s testimony

does not establish that he filed his return on September 3, 1999.

Moreover, the fact that petitioner also did not file his

individual Colorado State income tax return until July 2, 2003,

suggests that he filed both his Federal and State income tax

returns at about the same time.   We thus conclude that petitioner

failed to carry his burden of proving that he filed his return on

September 3, 1999.   Rather, based on the evidence adduced, we

hold that petitioner filed his 1998 return on July 10, 2003.
                                - 7 -



Accordingly, the statute of limitations does not bar the

assessment of the deficiency at issue.

B.   Addition to Tax

     Pursuant to section 6651(a)(1), respondent determined that

petitioner is liable for an addition to tax.    Section 6651(a)(1)

imposes an addition to tax for the failure to file a return

within the period of time prescribed (determined with regard to

any extension of time for filing), unless the taxpayer shows that

such failure was due to reasonable cause and not due to willful

neglect.

     Section 7491(c) provides that the Commissioner will bear the

burden of production with respect to the liability of any

individual for additions to tax.   “The Commissioner’s burden of

production under section 7491(c) is to produce evidence that it

is appropriate to impose the relevant penalty, addition to tax,

or additional amount”.    Swain v. Commissioner, 118 T.C. 358, 363

(2002); see also Higbee v. Commissioner, 116 T.C. 438, 446

(2001).    The Commissioner, however, does not have the burden to

introduce evidence regarding reasonable cause or substantial

authority. Id. at 446-447.    Section 7491(c) applies to

examinations commenced after July 22, 1998.

     Petitioner had an extension of time to file his return until

August 15, 1999.   Petitioner did not file a return by August 15,
                                 - 8 -

1999.    Indeed, petitioner testified at trial that he allegedly

mailed his return to respondent on September 3, 1999, after the

due date as extended.    Accordingly, respondent met his burden of

production for the section 6651(a)(1) addition to tax.

     Petitioner did not present any persuasive evidence that his

failure to timely file a return was due to reasonable cause and

not due to willful neglect.     See Higbee v. Commissioner, supra at

446-447.    Accordingly, petitioner is liable for the section

6651(a)(1) addition to tax for 1998.

C.   Conclusion

     We have considered all of petitioner’s arguments, and, to

the extent that we have not specifically addressed them, we

conclude that they are without merit.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect our disposition of the disputed issues, as well

as the parties’ concessions,6



                                         Decision will be entered

                                 under Rule 155.




     6
        Presumably, respondent will afford petitioner the
applicable joint filing tax rate in recomputing the deficiency.
See supra note 4.
