Opinion
9650-14
02-10-2022
NIKTA FATEMEH ABDOLRAHIM & MELVIN COLLINS, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Tamara W. Ashford, Judge
On April 23, 2020, after trial and briefing, the Court issued a Memorandum Findings of Fact and Opinion (T.C. Memo. 2020-50). The opinion ended by stating that "[d]ecisions will be entered under Rule 155", i.e., the Tax Court Rule under which the parties are to submit computations according to the Court's opinion, showing the correct amount of the tax liability for each taxable year at issue to be included in the decision.
This case (involving petitioners' 2009 and 2010 taxable years) was consolidated with Docket No. 9649-14 (involving petitioner Melvin Collins' 2011 and 2012 taxable years) for purposes of trial, briefing, and opinion.
Unless otherwise indicated, all Rule references are to the Tax Court Rules of Practice and Procedure, and all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times.
On July 22, 2020, respondent filed his computation for entry of decision, attaching thereto the proposed decision. On September 28, 2020, pursuant to the Court's August 26, 2020, Order, petitioners filed an alternative computation for entry of decision.
Respondent's computation for the 2009 taxable year results in a deficiency in income tax due from petitioners of $8,437.00, a section 6651(a)(1) addition to tax due from petitioners of $1,662.25, and a section 6663(a) penalty due from petitioner Melvin Collins of $6,327.75. Respondent's computation for the 2010 taxable year results in a deficiency in income tax due from petitioners of $8,886.00, a section 6651(a)(1) addition to tax due from petitioners of $1,726.50, and a section 6663(a) penalty due from Mr. Collins of $6,664.50.
Petitioners' alternative computation for the 2009 and 2010 taxable years results in lower amounts due for the deficiencies in income tax, the section 6651(a)(1) additions to tax, and the section 6663(a) penalties. The lower amounts are attributable to (1) alternative calculations of the Schedule E income from Mr. Collins' S corporation for each year, (2) the inclusion of additional Schedule A deductions for real estate taxes and personal property taxes for the 2009 taxable year and an additional Schedule A deduction for real estate taxes for the 2010 taxable year, and (3) alternative calculations of the total payments made for each year. Petitioners' alternative computation is incorrect.
Regarding the Schedule E income from Mr. Collins' S corporation for the 2009 and 2010 taxable years, the parties in their respective computation take into account the Schedule E deductions that respondent conceded were attributable to the corporation (see page 18 of the Court's opinion). However, petitioners failed (unlike respondent) to account for the Schedule E losses attributable to the corporation that they had previously reported on their 2009 and 2010 Schedules E ($1,828 and $3,277, respectively). As a result, petitioners have in effect over-inflated the conceded deductions attributable to Mr. Collins' S corporation and thus have incorrectly included in their computation lower amounts of Schedule E income from the corporation than respondent.
Regarding additional Schedule A deductions for real estate taxes and personal property taxes for the 2009 taxable year and an additional Schedule A deduction for real estate taxes for the 2010 taxable year, petitioners in their computation use higher amounts for these items than reported on their 2009 and 2010 Schedules A (which are the amounts respondent has included in his computation). These reported items and their amounts, however, were never raised as issues either at trial or on brief; thus, it is incorrect for petitioners to have included in their computation the higher amounts.
Regarding the total payments made for the 2009 and 2010 taxable years, the parties in their respective computation take into account the payments petitioners made as reported on their Federal income tax returns for those years. However, petitioners failed (unlike respondent) to account for the tax refunds they were issued on March 14, 2011, and May 21, 2012, for the 2009 and 2010 taxable years, respectively. As a result, petitioners have incorrectly included in their computation higher amounts of total payments made than respondent.
The Court is satisfied that respondent's computation for the 2009 and 2010 taxable years is consistent with our opinion and is therefore correct. Accordingly, it is hereby
ORDERED and DECIDED that there are deficiencies in income tax due from petitioners for the 2009 and 2010 taxable years in the amounts of $8,437.00 and $8,886.00, respectively. It is further
ORDERED and DECIDED that there are additions to tax due from petitioners under section 6651(a)(1) for the 2009 and 2010 taxable years in the amounts of $1,662.25 and $1,726.50, respectively. It is further
ORDERED and DECIDED that there are penalties due from petitioner Melvin Collins under section 6663(a) for the 2009 and 2010 taxable years in the amounts of $6,327.75 and $6,664.50, respectively.