Joseph C. Honer, Jr.

Opinion

United States Tax Court

Washington, DC 20217

Joseph C. Honer, Jr., Petitioners

v. Docket Nos. 3985-20.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

ORDER

Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is

ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial in the above captioned case before Judge Christian N. Weiler at Tampa, Florida on March 30, 2022, containing his Oral Findings of Fact and Opinion rendered at the trial session at which the case was heard.

In accordance with the Oral Findings of Fact and Opinion, decision will be entered for respondent.

(Signed) Christian N. Weiler Judge

Served 04/28/22

1 Bench Opinion by Judge Christian N. Weiler 2 March 30, 2022 3 Joseph C. Honer, Jr. v. Commissioner 4 Docket No. 3985-20 5 THE COURT: The Court has decided to render oral 6 findings of fact and opinion in this case, and the 7 following represents the Court's oral findings of fact and 8 opinion. The oral findings of fact and opinion shall not 9 be relied upon as precedent in any other case. 10 This bench opinion is made pursuant to the 11 authority granted by I.R.C. §7459(b) of the Internal 12 Revenue Code of 1986, as amended, and Rule 152 of the Tax 13 Court Rules of Practice and Procedure. Unless otherwise 14 indicated, all statutory references are to the Internal 15 Revenue Code, Title 26 U.S.C., in effect at all relevant 16 times, and all Rule references are to the Tax Court Rules 17 of Practice and Procedure. 18 Joseph C. Honer, Jr., petitioner, resided in 19 Florida at the time his petition was filed, and appeared 20 at trial pro se. Chardea C. Murray appeared on behalf of 21 the Commissioner of Internal Revenue, respondent. 22 This case arises from a notice of deficiency 23 dated January 6, 2020, issued to petitioner proposing an 24 increase in tax of $6,491, and an addition to tax under 25 section 6662 in the amount of $1,298 for the 2017 tax

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1 year. Petitioner timely filed his petition with the Tax 2 Court on February 27, 2020. 3 Before trial the parties agreed that petitioner 4 underreported his gains on the sales of securities by 5 $26,255, and dividends of $9,775 for 2017. Before trial 6 respondent conceded that petitioner is not liable for the 7 addition to tax under section 6662. The remaining issues 8 for trial are whether petitioner is liable for a tax 9 deficiency and whether petitioner has an overpayment for 10 2017. 11 Findings of Fact 12 The parties filed with the Court a stipulation 13 of facts, with accompanying exhibits, that is incorporated 14 herein by this reference. 15 Petitioner timely filed his personal income tax 16 return for 2017, reporting adjusted gross income of 17 $139,441, taxable income of $103,687, and tax liability of 18 $23,328. In total, petitioner paid $36,424 in taxes for 19 2017, which consisted of tax withholding of $6,000, 20 estimated tax payments of $20,000, and carry forward 21 credits from a prior tax period of $10,424. On his 2017 22 tax return, petitioner chose to apply any overpayment of 23 his taxes to the 2018 tax year and the Internal Revenue 24 Service (hereinafter "IRS") applied $13,096 to 25 petitioner's 2018 tax year. Petitioner has an overpayment

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1 or credit balance for 2018 and refund checks have been 2 issued to petitioner. 3 In 2020 the IRS conducted a review of 4 petitioner's 2017 tax return. The IRS received a third- 5 party report from Vanguard Brokerage Services reflecting 6 taxable dividends of $9,775 received by petitioner in 7 2017. The IRS also received third-party reports from 8 Boston Financial Data Services and Vanguard Brokerage 9 Services, reflecting sale of taxable securities by 10 petitioner of $103,056. Petitioner's 2017 income tax 11 return reported no dividends and the sale of taxable 12 securities of $76,701. 13 Based on these third-party reports, the IRS 14 adjusted petitioner's return by including as additional 15 income dividends of $9,775 and additional sales of taxable 16 securities of $26,355, which is the difference between the 17 amount reported from third-parties and the amount shown on 18 petitioner's 2017 tax return. 19 On March 2, 2022 respondent filed a motion for 20 entry of decision based on the filed stipulation. On 21 March 14, 2022, petitioner filed his response opposing 22 respondent's motion for entry of decision. On March 16, 23 2022, petitioner filed a motion for declaratory judgment. 24 During trial petitioner and respondent both withdrew their 25 respective motions. At trial, petitioner also moved to

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1 seek sanctions against respondent and requested that the 2 Court hold respondent in contempt. 3 Opinion 4 I. Summary of Petitioner's Arguments 5 Petitioner contends that respondent acted in bad 6 faith in handling his case and objects to the length of 7 time this matter has taken to be resolved. Petitioner 8 disputes there is a deficiency in tax owed and points the 9 Court to the amount of tax he paid for 2017. In other 10 words, petitioner argues there is no tax deficiency since 11 the total tax due - as adjusted to include the deficiency 12 - would still reflect an overpayment after considering the 13 amounts paid. 14 In short petitioner's argument conflates the 15 issue of a tax deficiency with the issue of whether there 16 is an overpayment of tax. The two issues are not 17 synonymous; rather, they are parallel issues and will be 18 separately addressed herein by the Court. 19 II. Is a Tax Deficiency Due by Petitioner? 20 When the IRS determines that there is a 21 deficiency in tax due, the IRS is authorized to send 22 notice of such deficiency to the taxpayer by certified 23 mail or registered mail. See I.R.C. § 6212. When a 24 petition is timely filed by a taxpayer in response to the 25 IRS notice, the Tax Court has jurisdiction to redetermine

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1 the correct amount of the deficiency. See I.R.C. § 6214. 2 The redetermined deficiency as decided by the Tax Court is 3 then assessed by the IRS. See I.R.C. § 6215. 4 We find that petitioner is liable for a tax 5 deficiency of $6,491. This tax deficiency is based on the 6 stipulated adjustments to petitioner's 2017 tax return, 7 and includes the additional income that was not originally 8 reported by petitioner of taxable dividends of $9,775 and 9 sale of securities of $26,355. 10 III. Is there an Overpayment by Petitioner? 11 Based on the original return as filed by 12 petitioner, there was an original overpayment of the tax 13 of $13,096. Petitioner argues that after the increased 14 tax deficiency of $6,491, no balance should remain since 15 the tax deficiency is less than petitioner's overpayment 16 amount. However, petitioners argument fails to consider 17 how he directed the overpayment amount to be carried 18 forward to 2018. The IRS honored petitioner's request and 19 applied $13,096 to petitioner's 2018 tax year. 20 Consequently, we find no overpayment remains for 2017.

21 IV. Can the Court Require the IRS to Apply Petitioner's Overpayment for 2018 to His 2017 22 Tax Deficiency?

23 Under section 6512(b)(1) we have jurisdiction to 24 find that there is a deficiency in tax, or to find that 25 there is no deficiency in tax, and, in either situation,

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1 we also have jurisdiction to determine whether there has 2 been an overpayment. Steinberg v. Commissioner, T.C. 3 Memo. 1999-311, aff'd, 19 F. App'x 498 (9th Cir. 2001). 4 However, the Tax Court is a court of limited jurisdiction 5 and a timely filed petition in response to a notice of 6 deficiency only invokes the Court's jurisdiction over the 7 tax year at issue. See I.R.C. § 6213(a). 8 Accordingly, our jurisdiction in this case is 9 limited to petitioner's 2017 tax year, and we have no 10 jurisdiction to order the IRS to offset or apply 11 petitioner's 2018 overpayment amount to petitioner's tax 12 deficiency for 2017. See Savage v. Commissioner, 112 T.C. 13 46 (1999); Buckner v. Commissioner, T.C. Memo. 2013-243. 14 Although we do not have jurisdiction to order 15 the IRS to apply the overpayment amount from 2018 to 2017, 16 this may very well be done by the IRS once the 2017 tax 17 deficiency amount is assessed against petitioner, after a 18 decision is entered by the Tax Court. 19 V. Other Issues Raised by Petitioner at Trial 20 At trial petitioner also moved to seek sanctions 21 and requested an amount of $250, reflecting what he 22 considered to be costs he incurred in this case, 23 comprising of filings fees, certified mailings, and 24 transportation costs. 25 Under the current circumstances, any delays in

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1 the handling of this case were not intentional but were 2 likely caused by the COVID-19 pandemic. Petitioner's 3 arguments for sanctions are entirely unsubstantiated. 4 Therefore, we deny petitioner's request. 5 Finally, petitioner requested that we hold 6 respondent in contempt of court; however, petitioner 7 provides no evidence of respondent failing to comply with 8 any order of the Court. Accordingly, we likewise deny 9 this request. 10 Consistent with the preceding discussion, a 11 decision will be entered for respondent. 12 This concludes the Court's oral findings of fact 13 and opinion in this case. 14 (Whereupon, at 10:43 a.m., the above-entitled 15 matter was concluded.)

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1 CERTIFICATE OF TRANSCRIBER AND PROOFREADER 2 CASE NAME: Joseph C. Honer, Jr. v. Commissioner 3 DOCKET NO.: 3985-20 4 We, the undersigned, do hereby certify that the 5 foregoing pages, numbers 1 through 10 inclusive, are the 6 true, accurate and complete transcript prepared from the 7 verbal recording made by electronic recording by Adrian 8 Morris on March 30, 2022 before the United States Tax 9 Court at its session in Tampa, FL, in accordance with the 10 applicable provisions of the current verbatim reporting 11 contract of the Court and have verified the accuracy of 12 the transcript by comparing the typewritten transcript 13 against the verbal recording. 14 15 16 17 _______________________________________________ 18 Meribeth Ashley, CET-507 4/3/22 19 Transcriber Date 20 21 22 _______________________________________________ 23 Lori Rahtes, CDLT-108 4/3/22 24 Proofreader Date