                               T.C. Memo. 2012-89



                        UNITED STATES TAX COURT



                  MARIO E. CAYABYAB, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 11469-10.                         Filed March 26, 2012.




      Mario E. Cayabyab, pro se.

      John W. Strate, for respondent.



            MEMORANDUM FINDINGS OF FACT AND OPINION


      HAINES, Judge: This case arises from a petition for redetermination filed in

response to a notice of deficiency issued to petitioner for 2006. Respondent

determined a deficiency of $270,885 and additions to petitioner’s Federal income
                                           -2-

tax of $59,707, $42,458, and $12,529 pursuant to sections 6651(a)(1) and (2) and

6654, respectively.1

       After stipulations and concessions the only issue remaining for decision is

whether petitioner is liable for the section 6651(a)(1) addition to tax.2

                                 FINDINGS OF FACT

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

facts, together with the attached exhibits, are incorporated herein by this reference.

At the time petitioner filed his petition, he lived in California.

       Petitioner has a degree in engineering. During 2006 he worked for Dionex

Corp. Petitioner was going through a divorce in 2006 and was struggling with the

care of his children. Petitioner’s ex-wife was in possession of documents relating to

their investment income. Petitioner did not attempt to retrieve these documents

because his priority was to settle his divorce and take care of his children, and he

believed he could settle his taxes for 2006 “later on”. Petitioner was in good




       1
        All section references are to the Internal Revenue Code in effect for the year
at issue, and all Rule references are to the Tax Court Rules of Practice and
Procedure. Amounts are rounded to the nearest dollar.
       2
        The parties have stipulated that there is a deficiency in income tax due from
petitioner for 2006 of $14,537 and a withholding tax credit of $5,553. Respondent
has conceded the secs. 6651(a)(2) and 6654 additions to tax.
                                          -3-

health throughout 2006 and was not hospitalized for any illness between 2006 and

2010.

        Petitioner was aware of his obligation to file his Form 1040, U.S. Individual

Income Tax Return, for 2006. However, he did not file a timely Form 1040.

Respondent sent petitioner a letter on November 30, 2009, requesting that petitioner

file his Form 1040 for 2006. Petitioner filed his Form 1040 for 2006 with

respondent on October 14, 2010, and respondent accepted petitioner’s filing. The

notice of deficiency was issued on February 16, 2010, and petitioner timely filed his

petition.

                                       OPINION

        The Commissioner has the burden of production with respect to any penalty,

addition to tax, or additional amount. Sec. 7491(c). The Commissioner satisfies

this burden of production by coming forward with sufficient evidence indicating

that it is appropriate to impose the penalty. See Higbee v. Commissioner, 116 T.C.

438, 446 (2001). Once the Commissioner satisfies this burden of production, the

taxpayer must persuade the Court that the Commissioner’s determination is in error

by supplying sufficient evidence of an applicable exception. Id.

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

the date prescribed unless the taxpayer can establish that the failure is due to
                                         -4-

reasonable cause and not due to willful neglect. To prove reasonable cause for a

failure to timely file, the taxpayer must show that he exercised ordinary business

care and prudence and was nevertheless unable to file the return within the

prescribed time. Crocker v. Commissioner, 92 T.C. 899, 913 (1989); sec.

301.6651-1(c)(1), Proced. & Admin. Regs. The determination of whether

reasonable cause exists is based on all the facts and circumstances. Estate of

Hartsell v. Commissioner, T.C. Memo. 2004-211; Merriam v. Commissioner, T.C.

Memo. 1995-432, aff’d without published opinion, 107 F.3d 877 (9th Cir. 1997).

      Petitioner admits that he failed to timely file his Form 1040 for 2006 and that

he was aware of his obligation to do so. Therefore, respondent’s burden of

production under section 7491(c) with respect to the section 6651(a)(1) addition to

tax has been satisfied.

      Petitioner argues that certain documents required for filing his return were

unavailable to him because of his divorce. He further argues that he was too

preoccupied with the difficulties of his divorce and the care of his children to

attempt to retrieve those documents. We have previously held that a taxpayer did

not have reasonable cause for failure to file where the taxpayer knew of his

obligation to file but chose to make his divorce and custody battle a greater

priority. Maher v. Commissioner, T.C. Memo. 2003-85. Further, the unavailability
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of information or records does not necessarily establish reasonable cause for failure

to file a timely return. Elec. & Neon, Inc. v. Commissioner, 56 T.C. 1324,

1342-1343 (1971), aff’d without published opinion, 496 F.2d 876 (5th Cir. 1974).

Petitioner has not demonstrated that he exercised the ordinary business care and

prudence that would qualify him for relief from the section 6651(a)(1) addition to

tax. Consequently, petitioner has not met his burden of persuasion, and

respondent’s determination is sustained.

         The Court, in reaching its holdings, has considered all arguments made, and,

to the extent not mentioned, concludes that they are moot, irrelevant, or without

merit.

         To reflect the foregoing,


                                                    Decision will be entered

                                              under Rule 155.
