John Michael Davidson, Petitioner

MEMORANDUM FINDINGS OF FACT AND OPINION

FOLEY, Judge : After concessions, the issues for decisio n are whether petitioner is entitled to a net operating loss carryover relating to 2003 and whether petitioner is liable for a section 6651(a)(1)1 addition to tax .

'Unless otherwise indicated, all section re ferences are to .

(continued .

. ) SERVED Feb 24 2010 r

FINDINGS OF FAC T

Most of the facts have been stipulated and are so found .

Petitioner timely filed 1999 and 2000 Federal income tax returns, reporting adjusted gross income of $97,291 and $109,123, respectively . On September 25, 2006, petitioner and his wife untimely filed a joint Federal income tax return relating to 2003 and claimed a $64,973 net operating loss (NOL) carryover relating to losses sustained in 2001 and 2002 . On January 2, 2007, petitioner and his wife untimely filed joint Federal income tax returns relating to 2001 and 2002 . On the 2001 and 2002 returns petitioner and his wife reported NOLs of $26,628 and $38,345, respectively, and attempted to waive the carryback period relating to each loss .

On August 7, 2008, respondent issued petitioner and petitioner's wife a notice of deficiency relating to 2003 . In the notice of deficiency, respondent determined that petitioner and petitioner' s wife were not entitled to the $64,973 NOL carryover claimed on their 2003 return . Respondent further determined a $6,654 deficiency and a $1,664 section 66$1(a)(1) .

addition to tax for failure to file a timely return . On November '( .

. .continued) the Internal Revenue Code in effect for the year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure .

6, 2008, petitioner, while residing in Georgia, filed hi s 3 - petition with the Court .

OPINION

We must determine whether petitioner is ent itled to an NOL .carryover relating to 2003 . Petitioner contends that his 200 3 income is offset by NOLs sustained in, and carri ed over from, 2001 and 2002 . Petitioner bears the burden of p roof with respect to whether he is entitled to an, NOL carryover re lating to 2003 . 2 See Rule 142(a) . Generally, before an NOL may be carrie d forward, it must be carried back (carryback rule . See sec .

172(b) ; sec . 1 .172-4( b)(1) and ( 2), Income Tax Pegs . On a timely filed return , a taxpayer may elect to waive application of the carryback rule . See sec . 172(b)(3), ( j) ; see also sec . 301 .9100- 12T(d), Temporary Proced . & Admin . Regs ., 57 Fed . Reg . 43893, 43896 ( Sept . 23, 1992 ) ( redesignating sec . 7 .0, Temporary Income Tax Regs ., 42 Fed . Reg . 147 .0 (Jan . 7, 1977 )) . Petitioner filed his 2001 and 2002 returns on January 2, 2007--several years after their respective due dates .

Thus, petitioner failed to timely waive the applicable carryback rules relating to his 2001 an d 2002 NOLs . Petitioner must therefore establish that these losse s .) were not absorbed by his gross income in prior years .

See sec .

172(b)(1)(A), (H) ; Jones v . Commissioner , 25 T .C . 1100, 110 4 2Sec . 7491(a) is inapplicable because petitioner failed to introduce credible evidence within the meaning of sec . 7491(a)(1) .

4-- (1956), revd . in part and remanded on other grounds 259 F .2d 300 (5th Cir . 1958) ; .,sec . 1 .172-4(b)(1) and (2), Income Tax Regs .

Petitioner had sufficient income in those years to absorb the NOLs . See sec . 172(b) (1) (H) ; sec .

1 .172-4(b)(1) and (2), Income Tax Regs . Accordingly, we sustain respondent's determination with respect to petitioner's NOL carryover .

We must also determine whether petitioner is liable for a section 6651(a)(1) addition to tax for failure to file a timely return . Petitioner filed his 2003 return (i .e ., which was due April 15, 2004) on September 25, 2006, and has failed t o establish, pursuant to section 6651(a)(1), that the untimely filing was due to reasonable cause and not willful neglect .

Accordingly, petitioner is liable for the section 6651(a)(1) addition to tax .

Contentions we have not addressed are irrelevant, .moot, or meritless .

To reflect the foregoing, Decision will be entere d under Rule 155 .