§6020 — Returns prepared for or executed by Secretary

We distinguished Millsap from Cabirac because in Millsap, the revenue agent’s report was attached to the SFR. Cabirac, 120 T.C. at 172. In Rader v. Commissioner, 143 T.C. 376, 382 (2014), aff’d in part, appeal dismissed in part, 616 F. App’x 391 (10th Cir. 2015), we summarized the requirements of a section 6020(b) SFR: “To constitute a section 6020(b) SFR, ‘the return must be subscribed, it must contain sufficient information from which to compute the taxpayer’s tax liability, and the return for

Those cases are inapposite.

Those cases are inapposite.

8Even ifpetitioner was entitled to challenge his underlying tax liabilities, which he is not, his claims are iiidistinguishable from arguments uniformly rejected by this Court and the U.S. Court ofAppeals for the Third Circuit, the likely venue for appeal ofthis case. See Adler v. Commissioner, 443 Fed. Appx. 736, 739 (3d Cir. 2011) (rejecting the argument that the IRS lacks the authority to prepare substitutes for returns under sec. 6020(b)), affg T.C.

Thompson, pursuant to section 6020(b), for tax years 2014, 2015, and 2016.

An SFR prepared by the IRS pursuant to section 6020(b) is treated as the “return” filed by the taxpayer for purposes of section 6651(a)(2).

As a result respondent created for the S corporation a substitute for return pursuant to section 6020.

As a result respondent created for the S corporation a substitute for return pursuant to section 6020.

As a result respondent created for the S corporation a substitute for return pursuant to section 6020.

Respondent therefore prepared a substitute for return pursuant to section 6020(b) (which petitioner claims she did not receive)2 and on October 20, 2014, issued a notice ofdeficiency based on that substitute for return.

When, as here, the IRS prepares a substitute for return pursuant to section 6020(b), the taxpayer may raise her liability in an administrative hearing ifshe did not receive a notice ofdeficiency or otherwise - 9 - [*9] have a prior opportunity to contest the liability.

An SFR prepared by the IRS pursuant to section 6020(b) is treated as the "return" filed by the taxpayer for purposes ofsection 6651(a)(2).

We hold that respondent is so entitled, and we will grant respondent's motion.

Instead, on April 13, 2010, the IRS prepared a substitute for return ("SFR") for him for 2008 pursuant to section 6020(b).

The collection action stems from a substitute for return respondent prepared pursuant to section 6020 (b) for petitioner's 2005 tax year.

Respondent had previously prepared substitutes for returns pursuant to section 6020(b).

Therefore, respondent prepared substitutes for returns pursuant to section 6020(b) for petitioner's 2004, 2005, and 2006 tax years.

It did so pursuant to section 6020(b), which provides: (1) Authority of Secretary to execute return.--If any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such

Therefore, we hold petitioner liable for an addition to tax under section 6651(a) (1).

Adler a substitute for return for each of those years , pursuant to section 6020(b) .

The examining agent testified that substitutes for returns had been filed pursuant to section 6020 (b) for 2000, 2001, and subsequent years for which .no returns had been filed by petitioners .

Under section 6651(g) ( 2), a return prepabyrtehed S ecYre tarYy pursuant to section 6020(b) is treated as a:return filed by the taxpayer for the purpose of determining the amount of an addition to tax under section 6651(a)(2) .

Because the IRS made a return for each year pursuant to section 6020(b), section 6651(a)(2) imposes on petitioner an addition to tax for each year .

Pursuant to section 6020(b), respondent filed Federal income tax returns for petitioner for 2002, 2003, and 2004 (section 6020(b) returns) .

Section 6201(a)(1) provides that “The Secretary shall assess all taxes determined by the taxpayer or by the Secretary as to which returns or lists are made under this title.” Although section 6201(a)(1) does not appear to distinguish between the obligations to assess a tax with respect to a return filed by the taxpayer and a return filed by the Commissioner, Congress surely 6Petitioner argues that in Millsap v. Commissioner, 91 T.C. 926 (1988), the taxpayer did not raise, and this Court did not

1996-195 (finding that forms included in the notices of deficiency detailing the adjustments made by Commissioner did not serve as substitute returns under section 6020 and that nothing in the Internal Revenue Code requires the Secretary to file a return pursuant to section 6020 before assessing a deficiency); Hill v.

6020 provides: SEC. 6020. RETURNS PREPARED FOR OR EXECUTED BY SECRETARY.-- (a) Preparation of return by Secretary.--If any person shall fail to make a return required by this title or by regulations prescribed thereunder, but shall consent to disclose all information necessary for the preparation thereof, then, and in that case, the Secretary

It is well settled that an SFRprepared by the Commissioner under section 6020 is prima facie "good and sufficient for all legal purposes", including assessment ofFederal income tax shown on an SFR as due and owing.

6651(a)(1) for any month for which an (continued...) - 43 - [*43] tax is shown on a return filed by the taxpayer or a section 6020 substitute for return prepared by the Secretary.

As a result, we find that petitioner failed to timely pay the tax shown due on the section 6020 return without reasonable cause and is liable for the addition to tax under section 6651(a)(2).

Wnuck’s motion for reconsideration makes the following argument, which cites title 27 of the Code of Federal Regulations (“C.F.R.”): Judge Gustafson also, in his opinion, ignored the Petitioner’s argument that the enforcement regulations for 26 USC section 6020, substitute for returns, appear under 27 CFR Part 53 & 70 which relate to Alcohol, Tobacco, Firearms and explosives, not income or employment taxes.

- 13 - liable for the section 6651 (a)(2) addition to tax on his assertion that he made a substitute for return for 2004 under section 6020 (b) (SFR) that qualifies as a return for purposes of section 6651 ( a)(2) .

e petitioner a January 31, 2007, deadline to provide a current financial statement and to file all of the above- mentioned delinquent returns . After the hearing, the Appeals officer sent Mr . Statland copies of the returns respondent prepared under section 6020 (b) . Petitioner did not file the - 4 - requested tax returns or submit a current financial statement to the Appeals officer by the January 31, 2007, deadline . On February 15, 2007, the Appeals officer issued a Notice of Determination C

1996-195 (finding that forms included in the notices of deficiency detailing the adjustments made by the Commissioner were not substitute returns under section 6020 and that nothing in the Internal Revenue Code requires the Secretary to file a return pursuant to section 6020 before assessing a deficiency); Ebert v.

itioner argues that the notices of deficiency and the determinations therein are invalid because respondent: (1) Failed to identify the type of tax involved; (2) improperly prepared for petitioner tax returns that did not satisfy the requirements of section 6020; (3) failed to follow Internal Revenue Manual procedures and did not identify the statute or regulation relied upon in issuing the statutory notices; (4) misclassified her source of income; and (5) did not issue the notices within the st

Thody’s arguments that the Notice of Deficiency is invalid because (1) there is no “prescribing regulation” for section 6020 and (2) RA Greiner was not properly authorized to sign the Forms 13496.

On or around February 29, 2016, the IRS prepared a substitute for return (SFR) in accordance with section 6020 that asserted a deficiency of $85,238 and withholding of $36,057.4 All income for the taxable year was attributable to Mr.

The section 6651(a)(2) addition to tax applies only when an amount of tax is shown on a return filed by the taxpayer or a section 6020 substitute for return prepared by the Secretary.

-Whitaker included with the September pur- ported return a letter that they had both signed. They asserted in this letter that the IRS could not impose a frivolous return penalty upon them without first preparing a substitute for return (SFR) under section 6020. They accused the IRS ofmaking "extortionate threats" and characterized the CP72 notice as a "deliberate fraud- ulent effort at witness-tampering and extortion." They averred that the Form 1040 "previously submitted and confirmed received

Section 6020 Substitute for Return The Jagoses also argue that the Commissioner is required to prepare a substitute for return under section 6020. Section 6020 gives the Commissionerthe authorityto prepare a return for a taxpayerwhen that taxpayer fails to file a return. The Jagoses filed a return for 2012. Consequently, the Commissioner was not re

at 5, as follows: "It is well settled that a substitute for return prepared by the Commissioner under section 6020 is prima facie 'good and sufficient for all legal purposes', including to assess Federal income tax liability shown on a substitute for return as due and owing.

at 5, as follows: "It is well settled that a substitute for return prepared by the Commissioner under section 6020 is prima facie 'good and sufficient for all legal purposes', including to assess Federal income tax liability shown on a substitute for return as due and owing.

at 5, as follows: "It is well settled that a substitute for return prepared by the Commissioner under section 6020 is prima facie 'good and sufficient for all legal purposes', including to assess Federal income tax liability shown on a substitute for return as due and owing.

extension oftime to pay the tax. Evans's tax payment for the 2009 tax year was due on April 15, 2010. See sec. 6151. 3°A Form 13496 is a certification, which is signed by an IRS officer, that the documents attached thereto constitute a return under sec. 6020. See sec. 301.6020-1(b)(2), Proced. & Admin. Regs. - 49 - [*49] documents satisfy the above requirements and qualify as a substitute for return under section 6020(b).3¹ Consequently, they count as a return for purposes ofsection 6651(a)(2).

at 5, as follows: "It is well settled that a substitute for return prepared by the Commissioner under section 6020 is prima facie 'good and sufficient for all legal purposes', including to assess Federal income tax liability shown on a substitute for return as due and owing.

) imposes an addition to tax for failure to pay the amount oftax shown on a taxpayer's Federal income tax return on or before the payment due date, unless such failure is due to reasonable cause and not due to willful neglect.¹4 The section 6651(a)(2) addition to tax applies onlywhen an amount of tax is shown on a return filed by the taxpayer or a section 6020 substitute for return prepared by the Secretary.

The section 6651(a)(2) addition to tax applies only when an amount of tax is shown on a return filed by the taxpayer or a section 6020 substitute for return prepared by the Secretary.

return. Wheeler v. Commissioner, 127 T.C. 200, 208-211 (2006), aff'd, 521 F.3d 1289 (10th Cir. 2008). This can be done by introducing a copy of the SFR into evidence or by stipulation ofthe parties that the SFR is valid and meets the requirements ofsection 6020. See, e.g., Wheeler. 127 T.C. at 208-211; Gardner v. Commissioner, T.C. Memo. 2013-67, at *23-*24. The IRS cannot rely solely on account transcripts stating that an SFR was prepared in order to meet this burden ofproduction. Ibid. Respon

printed heading ("C Explanation of changes. In the space provided below, tell us why you are filing Form 1040X.") appears the following typewritten text: "Page 5 ofhis petitiön states: COST BASIS was provided to IRS on 09/02/2009 (pursuant to 26 USC Sec. 6020) in order to keep record ofCAPITAL LOSSES OVER FROM TY 2005 UNTIL TODAY. For TY2005 losses carry over was ($6,576.33). 2006 realized capital gain was $2,890.50 2007 losses carry over was ($84,870.63) 2008 * * * ($131,206.74) 2009 * * * ($14

Such a return, ifit meets the requirements ofsection 6020(b), is treated as the return filed by the taxpayer for purposes ofthe section 6651(a)(2) addition to tax. Secs. 6020(b), 6651(g)(2); Wheeler v. Commissioner, 127 T.C. 200, 208-209 (2006), aff'd, 521 F.3d 1289 (10th Cir. 2008); O'Boyle v. Commissioner, T.C. Memo. 2010-149, slip op.

Further, petitioner contends that respondent's determination was incorrect because he did not remember receiving the income reflected on respondent's 2009 substitute for return, prepared under section 6020.1 After concessions, the issues for decision are: (1) whetherpetitioner was required to file a Federal tax return for the 2009 tax year; (2) the amount of petitioner's taxable income for the 2009 tax year; and (3) whether petitioner was entitled to a making work pay credit for the 2009 tax yea

Respondentprepared substitutes f r returns under section 6020(b) for petitioner's years in issue (section 6020( ) returns); The 2003 section 6020(b) return showed $378 and $52,579 ofinte est income and Schedule C gross receipts, respectively, totaling $52,957.

On November 24, 2008, respondent prepared a section 6020 (b) substitute for return for 2005, which gave rise to the notice of deficiency.

On June 2, 2008, respondent prepared a substitute for < return for petitioner under section 6020 (b) for 2005.

returns filed by the IRS under section 6020(b) are treated as returns for section 6651 (a) (2) purposes . Sec . 6651 (g) (2) . Thus s ction 6651 (a) (2) imposes an addition to tax for failing to pay dhe amount shown on a substitute return satisfying section 6020 (b) . The addition is one-half percent of the tax shown on the return for each month (or fraction of a month) the taxpayer fails to pay, up to 25 percent. Sec. 6651(a) (2). The taxpayer is not; liable for an addition to tax under section

Asbury Attorney at Law PA for the years 1998 through 2002.4 Respondent prepared substitutes for returns (SFRs) under section 6020 (b) for tax years 1997 through 2002.

Substitute Returns Under Section 6020(b ) Beginning with her 1999 taxable year petitioner stopped filing Forms 1040, U.S .

Such a`return, if it meets the requirements of section 6020(b), is treated as the return filed by the taxpayer for the purposes of the section 6651(a)(2 ) addition to tax . Secs . 6020(b), 6651(g)(2) . Buckardt stipulated that he did not pay any taxes for the years .in dispute, but he raises several objections to the validity of the sec

007, the IRS sent petitioner a Letter 1058, Final Notice of Intent to Levy and Notice of Your Right to a Hearing, for 2002, 2003, 2004, and 2005 . The 2002 tax liability in the Letter 1058 was based on a substitute for return the IRS prepared under section 6020 . After the IRS sent the Letter 1058, petitioner filed a corrected 2002 return showing no tax liability, and the IRS updated her file accordingly . Petitioner also filed tax returns for 2003, 2004, and 2005 . The outstanding tax liabiliti

Substitutes for return were prepared under section 6020 (b) showing taxes due .

Together, the Westcotts timely filed an amended petition on November 13, 2007, in which they stated : Title 26, Section 6020a of the Tax Code requires (dozens of case law define "may" as meaning "must" in statutes or constitutional provisions) .

nder section 7491(c), respondent .has the burden of production with respect to the additions to tax . Respondent produced official records reflecting petitioner's failure to file a return for 2005 and the preparation of a substitute for return under section 6020 (b) . These records were received in evidence pursuant to rules 803 ( 8) and ( 10) and 902 (1) and (4) of the Federal Rules of Evidence . Respondent has satisfied the burden of production with respect to the additions to tax under sectio

From that point, petitioner's argument is that the section 6020 provisions do not apply to his income as he characterizes it and that procedures set out in the Internal Revenue Manual were not followed .

When the IRS prepares substitutes for returns under section 6020, the returns are generally based on income reported on third-party information returns .

ion of the unpaid taxes for the 2002 period by levy is neces- sary and appropriate . BACKGROUND The taxpayer did not voluntarily file Forms 1040 for any of the 2000-2002 periods . As al result, the IRS prepared the returns under the authority of IRC Section 6020 (b) . The IRS then made deficieicy assessments, which remain unpaid . The taxpayer did not petition the Tax Court for a re-determination of~any of the defi- ciencies . No payments have been male by the taxpayer . The taxpayer has additio

espondent also had the burden of production with-respect to the additions to tax under sections 6651(a) and 6654 . See sec . 7491(c) . Petitioner stipulated that he failed to file a return for 2002 and that a substitute tax return was prepared under section 6020,(b) . Respondent introduced evidence that petitione r also failed to file a return for 2001 . - 8 - Section 6651(a) 'imposes additions to ,tax for failure to file a return and failure to pay the .amount shown as-tax on a-return . Petitio

The Court cannot determine : (1) Whether petitioner's 2002 or 2003 untimely return was processed by respondent ; or (2) whether in the absence of a timely return for either year, respondent prepared a substitute for return, or a section 6020(b ) return .

The Court cannot determine : (1) Whether petitioner's 2002 or 2003 untimely return was processed by respondent ; or (2) whether in the absence of a timely return for either year, respondent prepared a substitute for return, or a section 6020(b ) return .

The petition alleges : (1) Respondent did not provide evidence that petitioner was engaged in "employment " or a "trade or business" as defined by the Internal Revenue Code ; (2) respondent failed to execute a valid substitute return under section 6020 (b) ; (3) respondent does not have authority to execute a substitute for return ; and (4 ) petitioner filed tax returns for each year at issue showing no tax liability .

ning the applicable tax periods before this CDP case . Issues Raised by the Taxpayer Challenges to the Existence or Amount of the Liability You have challenged the existence or the amount of the liability on the returns prepared by the IRS under IRC §6020 (b) . The underlying liability issue is precluded from this hearing. Furthermore, you have not prepared and submitted your own returns which would allow the IRS to adjust your tax liabilities . Challenges to the Appropriateness of the Collectio

A substitute return under section 6020 (b) was prepared by the Internal Revenue Service for that year on February 1, 2005 .

ued...) - 7 - Income Tax Examination Changes, was not signed; (4) the Individual Master File (IMF) for each year per the Forms 4340, Certificate of Assessment, Payments, and Other Specified Matters, shows no tax was ever assessed, no amounts due, and lacks a “code 494”;5 (5) Title 27, U.S.C., not Title 26, contains the implementing regulation for section 6020;6 and (6) he is not an individual required to pay an income tax.

ued...) - 7 - Income Tax Examination Changes, was not signed; (4) the Individual Master File (IMF) for each year per the Forms 4340, Certificate of Assessment, Payments, and Other Specified Matters, shows no tax was ever assessed, no amounts due, and lacks a “code 494”;5 (5) Title 27, U.S.C., not Title 26, contains the implementing regulation for section 6020;6 and (6) he is not an individual required to pay an income tax.

Respondent alleged in the pretrial memorandum that respondent had prepared a substitute for petitioner's 2002 income tax return and a Form 13496 , IRC Section 6020 (b) Certification, and attached to the Form 13496 transcripts of account for petitioner' s 2002 tax year, Form 4549, Income Tax Examination Changes, and Form 886-A, Explanation of Items .

Under section 6651 (g)(2), a return the Secretary prepared under section 6020 (b) is treated as "the return filed by the taxpayer for purposes of determining the amount of the addition" under section 6651 ( a)(2) .

You might prepare a return (pursuant to Code section 6020b) where no return is filed, but where, as in this case, a return has been filed, no statute authorizes I.R.S.

-3- not authorized to prepare a substitute return under section 6020; that petitioner at a section 6330 hearing may compel the production of documents from respondent; and that Appeals at his section 6330 hearing improperly relied upon Form 4340, Certificate of Assessments, Payments and Other Specific Matters.

Section 6020 specifically discusses returns prepared for or executed by the Secretary, but neither that section nor any other - 20 - section of the Internal Revenue Code provides a definition of the term “return”.10 In Beard v. Commissioner, 82 T.C. 766 (1984), affd. 793 F.2d 139 (6th Cir. 1986), this Court developed a widely accepted interpretati

Returns for 1990, 1991, and 1992 Petitioner and his wife, Lorraine Craig (Ms. Craig), did not file timely Federal income tax returns for 1990 and 1991. On February 18, 1993, respondent prepared and filed substitutes for returns for those years under section 6020. In preparing the substitutes for returns, respondent relied on information 2(...continued) 266 (1998); 1998-3 C.B. 747, 1020. We refer to it as a “Hearing”. -4- received from the Bureau of Labor Statistics. On October 27, 1994, and on D

You might prepare a return (pursuant to Code Section 6020b), where no return is filed, but where, as in this case, a return has been filed, no statute authorises (sic) IRS personnel [sic] to “change” that return.