                        T.C. Memo. 2011-211



                      UNITED STATES TAX COURT



                ALEC JEFFREY MEGIBOW, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7943-10.                Filed August 30, 2011.



     Anthony M. Bentley, for petitioner.

     Shawna A. Early and Robert A. Baxer, for respondent.



                        MEMORANDUM OPINION


     MORRISON, Judge:   The IRS issued to petitioner Alec Jeffrey

Megibow a statutory notice of deficiency pursuant to section

6212.1   The notice reflected the IRS’ determination of a $506

income-tax deficiency for the tax year 2007.    Dr. Megibow brings


     1
      All section references are to the Internal Revenue Code for
the year in issue.
                                      -2-

this case pursuant to section 6213(a), asking this Court to

redetermine the deficiency.       For the reasons explained below, we

sustain the deficiency.

                                Background

     At the time he filed his petition, Megibow resided in New

York.   During 2007, the IRS issued Megibow three checks that it

contends were partly payments of interest Megibow earned on tax

overpayments.    The table below sets forth the dates of the three

checks, the amounts of the checks, the tax years to which the IRS

contends each check corresponds, and the portions of the amounts

that the IRS contends are interest:

                   Checks Paid by the IRS to Megibow in 2007
                 That Allegedly Contain an Interest Component
                  Tax Year to Which                        Portion of Amount
                   Check Allegedly                         That Is Allegedly
 Date of Check         Relates          Amount of Check        Interest
   8/27/07              1997                $11,383.03          $1,000.11
   9/3/07               1998                 8,266.20             803.94
   11/12/07             2006                13,210.00               4.39
     Total                                  32,859.23           1,808.44

On his 2007 income-tax return, Megibow did not report that he

earned any interest income from the IRS.           On the basis of its

view that Megibow earned $1,808.44 of interest on tax

overpayments, the IRS determined a $506 income-tax deficiency and

issued Megibow a notice of deficiency on January 11, 2010.              In

response, Megibow filed a petition for redetermination of the

deficiency.
                                 -3-

                              Discussion

     If a taxpayer overpays federal taxes, the IRS is required to

pay interest on the overpayment.    Sec. 6611(a).   Generally, a

taxpayer who earns interest must include the interest in gross

income for the tax year in which it is received.     Sec. 61(a)(4)

(gross income includes interest); sec. 451(a) (item is included

in gross income for the taxable year in which item is received by

the taxpayer except when taxpayer’s tax-accounting method

dictates a different year).    Thus, a taxpayer who earns interest

on a tax overpayment must generally include the interest in gross

income in the year it is received.

     At trial the IRS introduced into evidence its accounting

records for Megibow’s 1997, 1998, and 2006 tax years.     These

records reflect the history of Megibow’s dealings with the IRS,

including the dates he made tax payments, the dates the IRS paid

him refunds, and the dates he accrued tax liabilities.     According

to the records, the IRS made three payments to Megibow in 2007.

Portions of each of the three payments are described as “INTEREST

DUE TAXPAYER”.   The portions are $1,000.11, $803.94, and $4.39

for overpayments of tax for the tax years 1997, 1998, and 2006,

respectively--a total of $1,808.44.    Megibow contends that the

accounting records are irrelevant in determining the amount of

interest income he earned because the records do not show what

rate the IRS used to compute interest.     Although the accounting
                                  -4-

records do not explicitly show the interest rate that the IRS

used in the computations, they are nonetheless persuasive that

$1,808.44 of the payments was, in substance, interest income.

The records show that the IRS computed and recorded that

$1,808.44 of its payments to Megibow was interest.    Megibow

produced no evidence that the disputed portions were not

interest.   He did not himself testify, call others to testify, or

introduce documentary evidence.    In his brief, Megibow

erroneously asserts that his attorney testified at trial.    The

attorney gave an opening statement, but he was not sworn in, and

he was not subjected to cross-examination.    Thus, he did not

testify.

     Megibow contends that the IRS has the burden of proof.      We

need not resolve whether this is correct.    The IRS has shown by a

preponderance of the evidence that the disputed portions of the

payments are interest income.   See Estate of Gilford v.

Commissioner, 88 T.C. 38, 51 (1987) (burden of proof is satisfied

by preponderance of evidence); Van Dusen v. Commissioner, 136

T.C. ___, ___ (2011) (slip. op. at 13) (“Our conclusions here,

however, are based on the preponderance of the evidence, and thus

the allocation of the burden of proof is immaterial.”).

     Megibow argues that the IRS failed to report to him, for

example by issuing him a Form 1099, that the payments had an

interest component.   The question we are required to answer is
                                    -5-

whether the disputed portions of the payments are taxable.        See

sec. 61(a).     The nonreceipt of an information return, such as a

Form 1099, does not convert a taxable item into a nontaxable

item.     See Vaughn v. Commissioner, T.C. Memo. 1992-317, affd.

without published opinion 15 F.3d 1095 (9th Cir. 1993).

        We required the parties to file simultaneous opening briefs,

followed by simultaneous answering briefs.        In his answering

brief Megibow challenges the adequacy of the amount of interest

the IRS paid.     He also raises an argument involving the Takings

Clause of the Constitution.     See U.S. Const., amend. V.     Because

these arguments were not made in the opening brief, we do not

consider them.     We conclude that Megibow earned the disputed

$1,808.44 as interest income.

        To reflect the foregoing,


                                               Decision will be entered

                                          for respondent.
