                        T.C. Memo. 2003-169



                      UNITED STATES TAX COURT



                DOUGLAS G. TURNIDGE, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 1925-01.              Filed June 10, 2003.


     Douglas G. Turnidge, pro se.

     Nhi T. Luu-Sanders, for respondent.



                        MEMORANDUM OPINION


     GOEKE, Judge:   Respondent determined deficiencies in

petitioner’s Federal income taxes and additions to tax as

follows:
                                  - 2 -

                                      Additions to Tax
Year       Deficiency   Sec. 6651(a)(1)   Sec. 6651(a)(2)   Sec. 6654
                                                 1
1996         $10,679      $2,402.78                          $568.41
                                                 1
1997           3,927         883.58                           210.09
                                                 1
1998           5,084       1,143.90                           232.62
                                                 1
1999           5,180       1,165.50                           262.00
       1
      In the notices of deficiency, respondent listed these amounts
as “To Be Computed”.

After concessions,1 the issues for decision are: (1) Whether

petitioner must include in gross income amounts received as

compensation for services and as interest during the years in



       1
      The notices of deficiency contain a number of adjustments
for the years in issue. Respondent determined that for all years
petitioner was required to include in gross income amounts
received as compensation for services and as interest.
Respondent also determined that petitioner was entitled to
deductions in 1997, 1998, and 1999 for health insurance premiums
paid, and that petitioner was entitled to deductions in all years
in issue for certain expenses claimed on Schedule C, Profit or
Loss From Business. Respondent further determined that for all
years in issue petitioner was entitled to the standard deduction
based on married filing separately status and to one personal
exemption for himself. Finally, respondent determined that
petitioner was liable for additions to tax under secs. 6651(a)(1)
and (2) and 6654 for all years in issue. In the stipulation of
facts and the supplemental stipulation of facts, the parties
resolved most of the adjustments contained in the notices of
deficiency and also agreed to other adjustments in petitioner’s
favor that were not contained in the notices. Specifically,
respondent conceded that petitioner is entitled to: (1) An
additional exemption deduction for his wife; (2) additional self-
employment health insurance deductions; and (3) various itemized
deductions (relating to property taxes, charitable contributions,
medical expenses other than health premiums, and a tax
preparation fee) rather than the standard deductions determined
in the notices of deficiency. On brief, respondent concedes that
petitioner is not liable for the additions to tax under secs.
6651(a)(2) and 6654 for the years in issue. The parties shall
take the agreements contained in the stipulations and
respondent’s concessions into account in the Rule 155
computation.
                                - 3 -

issue; (2) whether petitioner is liable for the self-employment

tax for the years in issue; (3) whether petitioner is entitled to

a dependency exemption deduction for one of his daughters for the

years in issue; and (4) whether petitioner is liable for the

addition to tax under section 6651(a)(1)2 for failing to timely

file Federal income tax returns for the years in issue.

Background

     The parties submitted this case fully stipulated pursuant to

Rule 122.    The stipulation of facts, the supplemental stipulation

of facts, and the attached exhibits are incorporated herein by

this reference.   Petitioner resided in La Grande, Oregon, at the

time he filed his petition.

     During 1996, petitioner worked as a pipe layer and equipment

operator in Eugene, Oregon.   Petitioner initially performed this

work as a consultant and then as an independent contractor.

Petitioner received compensation for services of $38,000 in the

taxable year 1996.   During 1997, 1998, and 1999, petitioner

worked for Blue Mt. Conservative Baptist Association’s Camp

Elkanah as a groundskeeper/maintenance supervisor.   During these

years, petitioner performed his work as an independent

contractor.   Petitioner received compensation for services of



     2
      Unless otherwise indicated, 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.
                                - 4 -

$19,007, $22,412, and $23,295 in the taxable years 1997, 1998,

and 1999, respectively.

     Petitioner received interest of $11, $8, $9, and $8 in the

taxable years 1996, 1997, 1998, and 1999, respectively.

     During the years in issue, petitioner was married and

resided with and supported his minor child, Jessy Turnidge

(Jessy).3    For these years, Jessy was a dependent of petitioner

within the meaning of section 152(a).4    Petitioner did not obtain

a Social Security number (SSN) for Jessy during the years in

issue.

     Petitioner and his wife did not file Federal income tax

returns for the years in issue.    On November 7, 2000, respondent

issued a notice of deficiency to petitioner for the taxable years

1996, 1997, and 1998.    On the same date, respondent issued a

separate notice of deficiency to petitioner for the taxable year

1999.    Petitioner timely filed a petition to this Court seeking a

redetermination.




     3
        Jessy Turnidge (Jessy) was born Oct. 13, 1993.
     4
      Petitioner also has an older daughter, Jolivia Turnidge
(Jolivia), who was born on Aug. 28, 1977. Petitioner is not
claiming a dependency exemption deduction for Jolivia for any of
the years in issue.
                                   - 5 -

Discussion5

       Gross income includes income from whatever source derived,

including compensation for services and interest.       Sec. 61(a)(1),

(4).       The parties stipulated that petitioner received

compensation for services of $38,000, $19,007, $22,412, and

$23,295 in the taxable years 1996, 1997, 1998, and 1999,

respectively.       The parties further stipulated that petitioner

received interest of $11, $8, $9, and $8 in the taxable years

1996, 1997, 1998, and 1999, respectively.       Accordingly,

petitioner must include these amounts in his gross income for the

years in issue.

       Section 1401 imposes a tax on the “self-employment income”

of every individual.       Section 1402(b) defines “self-employment

income” as “net earnings from self-employment”.       Section 1402(a)

generally defines “net earnings from self-employment” as gross

income derived by an individual, less deductions allowed.       It is

well established that earnings derived from work as an

independent contractor are “self-employment income” subject to

the self-employment tax.       E.g., Jackson v. Commissioner, 108 T.C.

130, 133-134 (1997); Simpson v. Commissioner, 64 T.C. 974 (1975).




       5
      Our resolution of the issues related to petitioner’s income
and self-employment tax liabilities for the years in issue does
not depend on who has the burden of proof in this case. With
respect to the burden of proof for the sec. 6651(a)(1) addition
to tax, see infra note 9 and the accompanying text.
                                   - 6 -

        The parties stipulated that petitioner worked as an

independent contractor during the years in issue.6       Accordingly,

we hold that petitioner is liable for the self-employment tax for

the years in issue.

        Petitioner argues that he is entitled to a dependency

exemption deduction for Jessy for the years in issue.       On brief,

petitioner claims that “The Social Security Number was and is not

to be used as identification”, and he questions how an SSN can be

required for tax deduction purposes.

        A taxpayer is generally entitled to claim an exemption for

each child who qualifies as a dependent under sections 151 and

152.7       However, no exemption is allowed for any individual unless

the taxpayer identification number (TIN) of the individual is

included on the return claiming the exemption.       Sec. 151(e).8   A



        6
      The parties stipulated that petitioner performed some work
in 1996 as a consultant. Respondent treated all of petitioner’s
1996 earnings as self-employment income subject to the self-
employment tax. Petitioner does not dispute this treatment.
        7
      Respondent is not arguing that Jessy was not a dependent of
petitioner during the years in issue.
        8
      Sec. 151(e) was added to the Code by the Small Business Job
Protection Act of 1996 (SBJPA), Pub. L. 104-188, sec. 1615(a)(1),
110 Stat. 1853, and is generally effective for returns due after
Sept. 19, 1996, Miller v. Commissioner, 114 T.C. 511, 513 n.1
(2000). However, for purposes of claiming a dependency exemption
deduction for the 1996 taxable year, the SBJPA requires a TIN
only for children born on or before Nov. 30, 1996. SBJPA sec.
1615(d)(2), 100 Stat. 1853; Miller v. Commissioner, supra at 513
n.1. Jessy was born on Oct. 13, 1993; therefore, the above
exception does not apply in this case.
                                 - 7 -

TIN is “the identifying number assigned to a person under section

6109.”    Sec. 7701(a)(41).   The SSN issued to an individual is the

identifying number, except as otherwise specified under

applicable regulations.    Sec. 6109(d).   The regulations specify

that an individual required to furnish a TIN must use an SSN

unless the individual is not eligible to obtain an SSN or is

required to use an employer identification number.    Sec.

301.6109-1(a)(1)(ii)(A), (B), and (C), Proced. & Admin. Regs.

     This Court has held that the SSN requirement is the least

restrictive means of achieving the Government’s compelling

interests in implementing the Federal tax system in a uniform,

mandatory way and in detecting fraud in regard to dependency

exemptions.    Miller v. Commissioner, 114 T.C. 511, 517-518

(2000).    Without providing an SSN, a taxpayer cannot properly

claim a section 151 dependency exemption deduction for his

children.    Id. at 513.   Petitioner does not dispute that he did

not file Federal income tax returns and did not provide an SSN

for Jessy for the years in issue.    Accordingly, we hold that

petitioner is not entitled to the dependency exemption deduction

for Jessy for the years in issue because he did not satisfy the

requirements of section 151(e).

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

failure to file a required return on or before the specified

filing date.    The addition to tax is 5 percent of the amount
                               - 8 -

required to be shown as tax on the return, and an additional 5

percent is imposed for each additional month or fraction thereof

during which the failure continues, but not to exceed 25 percent

in the aggregate.   Sec. 6651(a)(1).   This addition to tax may be

avoided only if the failure to file was due to reasonable cause

and not willful neglect.   United States v. Boyle, 469 U.S. 241,

245-246 (1985).

     Under section 7491(c), the Commissioner must come forward

with sufficient evidence to show that an addition to tax is

appropriate.9   Higbee v. Commissioner, 116 T.C. 438, 446 (2001).

However, the Commissioner does not bear the burden of proof as to

an addition to tax, and once the initial burden of production is

met, the taxpayer must come forward with sufficient evidence to

establish that the addition to tax does not apply.    Id. at 447.

     The parties stipulated that petitioner received compensation

for services and interest (which were of amounts sufficient to

require him to file Federal income tax returns), and that

petitioner did not file Federal income tax returns for 1996,

1997, 1998, and 1999.   Thus, we find that respondent has met his


     9
      Sec. 7491 is effective with respect to court proceedings
arising in connection with examinations commencing after July 22,
1998. Internal Revenue Service Restructuring and Reform Act of
1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 727. The evidence
in the record does not indicate when the examination commenced in
this case; however, the due dates, without extensions, for filing
petitioner’s returns for 1998 and 1999 were after July 22, 1998.
Accordingly, sec. 7491(c) is applicable to at least some of the
years in issue.
                               - 9 -

burden of production.   See, e.g., Spurlock v. Commissioner, T.C.

Memo. 2003-124.   Petitioner did not specifically address his

liability for the addition to tax, and the evidence in the record

lacks any indication that his failure to file was due to

reasonable cause and not willful neglect.     Accordingly, we hold

that petitioner is liable for the addition to tax under section

6651(a)(1) for the years in issue.


                                            Decision will be entered

                                       under Rule 155.
