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paid taxes through withholding but failed to file a return, the
Court held that the amount of the deficiency was equal to the
amount of tax due); Schneiker v. Commissioner, T.C. Memo. 1989-
378 (where the taxpayer submitted an invalid return, the Court
held that the amount shown as the tax by the taxpayer upon his
return was zero).
A taxpayer's liability for a deficiency becomes fixed, or
accrues, by an assessment of the tax. See secs. 6201, 6203. If
a taxpayer fails to file a return, then in order to assess a tax
liability, the Commissioner generally must issue a notice of
deficiency. Sec. 6212(a). It is for this reason that respondent
issued the notice of deficiency to petitioner, who had not
previously filed a return.
Because petitioner was liable for income tax for 1988, and
because she did not self-assess such liability by filing a valid
return for that year before the mailing of the notice of
deficiency, we hold that respondent was substantially justified
in issuing the notice of deficiency.
2. The Judicial Proceeding
Petitioner further contends that respondent's position was
not substantially justified at the time respondent filed the
answer because respondent had information available to her at
that time demonstrating that petitioner had satisfied her income
tax liability in April 1989. As previously indicated, respondent
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