                        T.C. Memo. 2006-136



                      UNITED STATES TAX COURT



                JAMES A. SHINAULT, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11360-04.               Filed June 27, 2006.



     James A. Shinault, pro se.

     J. Craig Young, for respondent.



                        MEMORANDUM OPINION


     WELLS, Judge:   Respondent determined a $9,378 deficiency in

tax, and additions to tax pursuant to sections 6651(a)(1) and

6654(a) of $2,345 and $504.39, respectively, for petitioner’s

taxable year 2000.   The issues we must decide are:

     1.   Whether petitioner’s correct filing status for taxable

year 2000 is that of a married individual filing separately.
                                - 2 -

     2.    Whether petitioner is entitled to additional personal

exemptions for taxable year 2000.

     3.    Whether petitioner is entitled to the earned income

credit for taxable year 2000.

     4.    Whether petitioner is entitled to the child tax credit

for taxable year 2000.

     5.    Whether petitioner is entitled to certain Schedule C

business deductions for taxable year 2000.

     6.    Whether petitioner’s failure to file his 2000 Federal

income tax return was due to reasonable cause and not willful

neglect.

     7.    Whether petitioner is liable for an addition to tax

pursuant to section 6654(a) for failure to make estimated tax

payments for taxable year 2000.

     Unless otherwise indicated, all section references are to

the Internal Revenue Code, as amended, and all Rule references

are to the Tax Court Rules of Practice and Procedure.

                            Background

     At the time of filing the petition in the instant case,

petitioner resided in Waterloo, South Carolina.   During taxable

year 2000 petitioner was a self-employed motorcycle mechanic and

received $36,864 in nonemployee compensation.   Petitioner did not

timely file a Form 1040, U.S. Individual Income Tax Return, for

taxable year 2000 or pay any tax for that year because, at the
                               - 3 -

time the return was due, he believed he was not required to file

tax returns or pay taxes because money he received for his labor

was a nontaxable exchange of equal value.1   Petitioner, however,

did timely file a tax return for taxable year 2001.   Based on a

Form 1099 issued to petitioner by Lauren’s Cycle Sales, Inc. for

taxable year 2000, respondent determined a $9,378 deficiency in

tax and additions to tax pursuant to sections 6651(a)(1) and

6654(a) in the amounts of $2,3452 and $504.39, respectively, and

sent petitioner a notice of deficiency on April 7, 2004.

Respondent computed the deficiency using the tax rates under

section 1(c) for an unmarried individual who is not a head of

household.   Petitioner timely petitioned this Court contending:

“I do not have any tax liability.   I deny the figures and content

of the Notice of Deficiency.   I dispute the computations.   In the

year in question I had dependents, deductions, credits, business

expenses, etc.   Local taxes, interest, dependent son.”



     1
      We note that petitioner has previously appeared before this
Court. In docket No. 19512-03L, a case in which we entered oral
findings of fact and opinion pursuant to sec. 7459 and Rule 152,
petitioner contended, among other frivolous contentions, that he
did not owe taxes for taxable year 1993 because respondent sent
the notice of determination to a “straw man” when respondent used
all capital letters to spell petitioner’s name. Petitioner
subsequently had a change of heart regarding the tax laws and
started filing returns, beginning with taxable year 2001.
     2
      The addition to tax pursuant to sec. 6651(a)(1) determined
in the notice of deficiency was originally, and incorrectly,
calculated as $3,704.31.
                               - 4 -



     Shortly before trial, petitioner provided respondent’s

counsel with a Form 1040, the Form 1099 from Lauren’s Cycle

Sales, Inc., and a Schedule C, Profit or Loss From Business, on

which petitioner claimed $19,525 in expenses.3    The Form 1040 is

dated November 1, 2005, and purports to be a joint return.    The

Form 1040 bears the signature of a return preparer but is not

signed by petitioner or his spouse.

                            Discussion

     As a general rule, the Commissioner’s determinations in the

notice of deficiency are presumed correct, and the taxpayer bears

the burden of proving an error.   Rule 142(a); Welch v. Helvering,

290 U.S. 111, 115 (1933).   The Commissioner has the burden of

production regarding whether it is appropriate to impose

penalties, additions to tax, or additional amounts.    Sec.

7491(c); Higbee v. Commissioner, 116 T.C. 438, 446 (2001).    The

Commissioner, however, does not have the obligation to introduce

evidence regarding reasonable cause.     Higbee v. Commissioner,


     3
      Petitioner claimed $6,000 for advertising expenses, $7,316
for car and truck expenses, and $6,209 for depreciation and sec.
179 expenses. Line 31 of petitioner’s Schedule C reflects a net
profit of $17,339 after deducting expenses of $19,525 from
petitioner’s $36,864 income.

     The Form 1040 that petitioner gave to respondent’s counsel
shortly before trial purports to be a joint Federal income tax
return and lists three personal exemptions, one each for
petitioner, his spouse, and their son. After claiming several
other deductions and credits, petitioner claims that his total
tax liability for taxable year 2000 is only $646.
                               - 5 -

supra at 446-447.   A taxpayer may claim married filing jointly

status if he and his spouse are legally eligible to file jointly

and in fact do file.   See secs. 1(a), 6013; Columbus v.

Commissioner, T.C. Memo. 1998-60, affd. without published opinion

162 F.3d 1172 (10th Cir. 1998).

     Respondent contends that petitioner’s correct filing status

is that of married individual filing a separate return.     See sec.

1(d).   Petitioner testified at trial that he sent a joint Federal

tax return for taxable year 2000 to the Internal Revenue Service

in Atlanta, Georgia, in November of 2005.   Petitioner, however,

failed to produce a signed copy of his return or a certified mail

receipt despite testifying that he had both.     Respondent’s

transcripts of account contained no evidence of any 2000 tax

return for petitioner.   Based on the record in the instant case,

we conclude that petitioner has failed to prove that his filing

status is not married filing separately.

     Petitioner bears the burden of showing that he is entitled

to claim any additional exemptions.    Rule 142(a); Welch v.

Helvering, supra; Columbus v. Commissioner, supra.     A taxpayer

filing a separate return may claim an exemption for his spouse

“if the spouse, for the calendar year in which the taxable year

of the taxpayer begins, has no gross income and is not the

dependent of another taxpayer.”   Sec. 151(b).    A taxpayer also

may claim an additional exemption for each individual who is a
                                 - 6 -

dependent as defined in section 152.     Sec. 151(c).   A dependent

generally includes a son or daughter of the taxpayer if:     The

taxpayer provided over half of the child’s support during the

calendar year, and the child is under the age of 19 or is a full

time student and under the age of 24.     Secs. 151(a), (c), 152(a).

       In the instant case, petitioner’s son was 12 years old

during taxable year 2000 and lived with petitioner and his spouse

for the entire year.    At trial, petitioner testified that his

spouse was not employed during taxable year 2000 and further

testified that his dependent son has always lived with petitioner

and his spouse.    We believe petitioner’s testimony that his

spouse did not have any income during taxable year 20004 and that

his minor son was a dependent.    Accordingly, petitioner is

entitled to two additional exemptions for his spouse and minor

son.

       Regarding petitioner’s claimed Schedule C business expenses,

deductions are a matter of legislative grace, and the taxpayer

bears the burden of proving that he is entitled to the claimed

deductions.    Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S.

79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435

(1934).    The taxpayer must maintain records sufficient to enable

the Commissioner to determine the correct tax liability.     Sec.



       4
      We infer from petitioner’s testimony that his spouse is not
the dependent of another taxpayer.
                                 - 7 -

6001; Meneguzzo v. Commissioner, 43 T.C. 824, 831-832 (1965);

sec. 1.6001-1(a), Income Tax Regs.       The taxpayer also bears the

burden of substantiating the amount and purpose of the claimed

deductions.     Hradesky v. Commissioner, 65 T.C. 87, 90 (1975),

affd. per curiam 540 F.2d 821 (5th Cir. 1976); sec. 1.6001-1(a),

Income Tax Regs.

     In the instant case, the only evidence petitioner presented

supporting his claimed Schedule C deductions was his own

uncorroborated testimony, which was vague and did not elaborate

on any of the claimed Schedule C expenses.      This Court is not

compelled to accept as true uncorroborated evidence of an

interested witness even though uncontradicted.       Marcella v.

Commissioner, 222 F.2d 878, 883 (8th Cir. 1955), affg. in part

and vacating in part a Memorandum Opinion of this Court.

Accordingly, we hold that petitioner has failed to prove that he

is entitled to the claimed Schedule C deductions for taxable year

2002.

     Section 32(a)(1) provides that an eligible individual shall

be allowed an earned income credit against his income tax.

However, in the case of a married individual, section 32(d)

provides that section 32 applies only if the individual filed a

joint return.    As of the date of trial, respondent’s transcript

of account contained no evidence that petitioner had filed a

joint return for taxable year 2000.      Accordingly, we hold that
                                - 8 -

petitioner has not proved that he is entitled to the earned

income credit.

     Under section 24(a), a taxpayer is entitled to a child tax

credit for each qualifying child.    A qualifying child is any

child of the taxpayer for whom the taxpayer is allowed a

deduction under section 151 and who is under the age of 17.

Sec. 24(c).   We have found that petitioner’s son was 12 years

old during taxable year 2000 and that petitioner is allowed a

deduction under section 151.    Accordingly, we hold that

petitioner has shown that he is entitled to a child tax credit

for his minor son for taxable year 2000.

     Section 6651(a)(1) imposes an addition to tax for a failure

to file an income tax return.    A taxpayer may be relieved of the

penalties, however, if he can demonstrate that the failure is due

to reasonable cause and not due to willful neglect.     Higbee v.

Commissioner, supra at 446-447.     Willful neglect means

intentional failure or reckless indifference.     United States v.

Boyle, 469 U.S. 241, 245 (1985).    Section 301.6651-1(c)(1),

Proced. & Admin. Regs., states that if a taxpayer exercises

ordinary business care and prudence and is nevertheless unable to

file on time, then the delay is due to reasonable cause.

Petitioner did not timely file his 2000 tax return because at the

time it was due he believed that the amounts paid to him by

Lauren’s Cycle Sales, Inc. were a nontaxable exchange of equal
                                   - 9 -

value for his labor.    Misguided interpretations of the

Constitution or other typical tax protester arguments are not

reasonable cause.    See Yoder v. Commissioner, T.C. Memo. 1990-

116.    Accordingly, we hold that petitioner is liable for the

addition to tax under section 6651(a)(1) for taxable year 2000.

       Section 6654(a) imposes an addition to tax for failure to

pay estimated income tax.    Section 6654 applies where prepayments

of tax, either through withholdings or by making estimated

quarterly payments, do not equal the percentage of total

liability required under the statute, unless one of the several

statutory exceptions applies.       Niedringhaus v. Commissioner, 99

T.C. 202, 222 (1992).    The taxpayer bears the burden of showing

he qualifies for an exception.       Habersham-Bey v. Commissioner, 78

T.C. 304, 319-320 (1982).    We find that petitioner does not

qualify for any such exception.      Accordingly, we hold that

petitioner is liable for the addition to tax under section 6654

for taxable year 2000.

       To reflect the foregoing,


                                                Decision will be entered

                                           under Rule 155.
