Anthony P. Hart - Page 9




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          3.   Addition for Failure To Pay Estimated Tax                              
               Petitioner admits that he did not pay estimated taxes on his           
          income.  He is therefore liable for an addition to tax under                
          section 6654(a).  Respondent properly included the failure to pay           
          estimated taxes addition in the notice of deficiency.  Where, as            
          in the case at hand, no valid return for the taxable year was               
          filed,5 these amounts are to be assessed, collected, and paid as            
          taxes under section 6665(a)(1), and are subject to the deficiency           
          procedures.  Sec. 6665(b)(2).  Because petitioner failed to file            
          a valid return for the 1998 taxable year, it was proper for                 
          respondent to include the section 6654(a) addition in the notice            
          of deficiency, and we have jurisdiction to determine whether                
          petitioner is liable for the addition.  We sustain respondent’s             
          determination that petitioner is liable for a failure to pay                
          estimated taxes addition under section 6654(a).                             



               5It’s worth noting that respondent included the sec. 6654(a)           
          addition to tax in the notice of deficiency even though                     
          respondent apparently thought that petitioner had filed a valid             
          income tax return.  We would have no jurisdiction to review the             
          sec. 6654(a) addition to tax if petitioner had filed a valid                
          income tax return.  Sec. 6665(b).  See also Estate of DiRezza v.            
          Commissioner, 78 T.C. 19 (1982), for a discussion of the                    
          legislative history of sec. 6665(b)’s identical predecessor,                
          former sec. 6659.  In any event, it’s improper for respondent to            
          include in the notice of deficiency (unless in the alternative)             
          both a sec. 6654(a) addition for failure to pay estimated tax and           
          a sec. 6662 accuracy-related penalty.  The sec. 6662 penalty                
          applies only if a valid return is filed, and the deficiency                 
          procedures can be used in connection with a sec. 6654(a) addition           
          only if a valid return is not filed.                                        





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