                        T.C. Memo. 2010-99



                      UNITED STATES TAX COURT



                 PETER STORAASLI, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 17707-07.               Filed May 6, 2010.



     Peter Storaasli, pro se.

     Robert V. Boeshaar, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     FOLEY, Judge:   After concessions, the issues for decision

are whether petitioner is liable for income tax deficiencies and
                               - 2 -

for additions to tax pursuant to sections 6651(f) and (a)(2)1 and

6654(a) relating to 2000, 2001, 2002, 2003, and 2004.

                         FINDINGS OF FACT

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

all relevant times, petitioner worked as a real estate agent and

resided with his wife in the State of Washington.   In 2000, 2001,

2002, 2003, and 2004 (years in issue), petitioner provided

services to Windermere Real Estate/SBA, Inc. (Windermere), and

was paid $82,669, $108,952, $120,311, $219,575, and $130,907,

respectively, for these services.   At petitioner’s request

Windermere paid petitioner for his services by issuing checks

payable to trust entities petitioner owned.   These checks were

deposited into a bank account over which petitioner had signature

authority and were subsequently transferred to petitioner’s

personal bank account.   Neither petitioner nor the trusts filed

returns relating to these payments.

     Petitioner, in 2002, 2003, and 2004, received dividend and

capital gain income, and in 2004 he received cancellation of

indebtedness income.   In addition, in 2000, 2001, and 2002

petitioner’s wife received self-employment income, and in 2003




     1
      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.
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and 2004 she received wages.2       Petitioner did not file Federal

income tax returns and did not pay estimated taxes relating to

the years in issue.

       Respondent assigned Revenue Agent Sue Ann Besson to examine

petitioner’s case.      During the course of Ms. Besson’s

examination, petitioner was uncooperative and evasive.       Ms.

Besson made numerous attempts to meet with petitioner and to

personally serve a summons on him but was unsuccessful.       Using a

bank deposits analysis and information obtained from Windermere

and other third parties, Ms. Besson made adjustments to

petitioner’s income relating to the years in issue.

       On May 10, 2007, respondent issued petitioner a notice of

deficiency relating to the years in issue and determined the

following income tax deficiencies and additions to tax:

                                      Additions to Tax
Year       Deficiency    Sec. 6651(a)(2) Sec. 6651(f)    Sec. 6654(a)

2000         $17,808         $4,452          $12,911         $951
2001          21,540          5,385           15,617          861
                                1
2002          29,365                          21,290          981
                                1
2003         125,151                          90,734        3,275
                                1
2004          26,541                          19,242          770
       1
      The amount of any addition to tax pursuant to sec.
6651(a)(2) shall be determined pursuant to sec. 6651(a)(2), (b),
and (c).



       2
      Washington is a community property State in which each
taxpayer spouse is treated as owning an undivided one-half
interest in the income earned by each spouse during marriage and
is liable for income tax on that one-half. See Poe v. Seaborn,
282 U.S. 101 (1930).
                               - 4 -

     On August 8, 2007, petitioner, while residing in the State

of Washington, filed his petition with the Court.

                              OPINION

     The parties stipulated that petitioner received income,

failed to file tax returns, and failed to pay estimated taxes

relating to the years in issue.   Petitioner nevertheless contends

that he is not required by law to file tax returns and that he is

not legally required to pay taxes.3     Such contentions are

meritless.   Accordingly, we sustain respondent’s determinations

with respect to the income tax deficiencies.

     Respondent also determined and established that petitioner

is liable for additions to tax pursuant to section 6651(f) for

fraudulent failure to file tax returns relating to the years in

issue.   See sec. 7454(a); Rule 142(b); Bradford v. Commissioner,

796 F.2d 303, 307-308 (9th Cir. 1986), affg. T.C. Memo. 1984-601;

Clayton v. Commissioner, 102 T.C. 632, 646-647, 652-653 (1994);

Petzoldt v. Commissioner, 92 T.C. 661, 700-701 (1989).     The

parties stipulated that petitioner failed to file tax returns and

failed to make estimated tax payments relating to the years in

issue.   Petitioner used trusts to divert and conceal the receipt

of income and was evasive during examination.     In addition,

petitioner did not have a good faith belief that he was exempt


     3
      Sec. 7491(a) is inapplicable because petitioner failed to
introduce credible evidence within the meaning of sec.
7491(a)(1).
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from filing.   See Niedringhaus v. Commissioner, 99 T.C. 202, 217-

219 (1992).    Accordingly, we sustain respondent’s determinations

relating to the section 6651(f) additions to tax.

     Respondent further determined that petitioner is liable for

section 6651(a)(2) additions to tax for failure to pay the amount

of tax shown on his returns and section 6654(a) additions to tax

for failure to pay estimated income taxes relating to the years

in issue.   With respect to the section 6651(a)(2) additions to

tax, respondent bears, but has failed to meet, the burden of

production pursuant to section 7491(c).     See Rule 142(a); Wheeler

v. Commissioner, 127 T.C. 200, 210 (2006), affd. 521 F.3d 1289

(10th Cir. 2008).   Respondent failed to establish that a return

or a substitute for return showing petitioner’s tax liability was

filed for any of the years in issue.     See sec. 6651(g)(2);

Wheeler v. Commissioner, supra.     Accordingly, petitioner is not

liable for the section 6651(a)(2) additions to tax.

     With respect to the section 6654(a) additions to tax,

respondent bears, and has met, the burden of production pursuant

to section 7491(c).   See sec. 6654(d)(1)(B); Rule 142(a).

Petitioner failed to make any estimated tax payments relating to

the years in issue and does not meet any of the exceptions

enumerated in section 6654(e).    Therefore, we sustain

respondent’s determinations relating to the section 6654(a)
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additions to tax.   See Wheeler v. Commissioner, supra at 210-211;

Higbee v. Commissioner, 116 T.C. 438, 446-447 (2001).

     Contentions we have not addressed are irrelevant, moot, or

meritless.

     To reflect the foregoing,


                                              Decision will be entered

                                         under Rule 155.
