Hall v Commissioner, T.C. Memo. 2022-82 | July 28, 2022 | Marshall, J.| Dkt. No. 8541-20
Short Summary: This case involves the disputed liability for (1) the deficiency in taxpayer’s income tax, (2) additions to tax for untimely filing of income tax returns, and (3) additions to tax for underpayments of estimated tax. In 2016 and 2017, Jamie B. Hall (Hall) was a beneficiary of two trusts. She received dividends and capital gains from each of the Trusts. Hall received Schedules K–1 (Form 1041), Beneficiary’s Share of Income, Deductions, Credits, etc., from each trust. Hall failed to file a federal income tax return for tax years 2015, 2016, or 2017. Hall did not pay any estimated income tax for the 2016 or 2017 tax year.
IRS issued notices of deficiency for the 2016 and 2017 tax years assessing deficiencies and addition to tax. In trial IRS requested to increase the section 6651(a)(1) additions to tax to 25% of the amounts required for 2016 and 2017. Hall argued that the Social Security Administration created the Jamie Bennett Hall trust (one of the trusts) by assigning her a Social Security number and a Social Security card. Additionally, she argued the trust is an agency of the U.S. Government and not subject to tax. The Tax Court found this argument frivolous and sustain IRS determinations for 2016 and 2017.
- Whether, pursuant to 26 U.S.C. § 6651(a)(1) and 6654, Hall is liable to additions to tax for untimely filing income tax returns, and to additions to tax for underpayments of estimated tax for 2016 and 2017 tax years?