Cross References
- Ebert, T.C. Memo. 2015-5, January 7, 2015

The taxpayer owned 1,176 shares of BNSF stock throughout 2009. Computershare Investor Services was the registered agent for BNSF in 2009. BNSF was acquired by Berkshire Hathaway early in 2010. Wells Fargo replaced Computershare as the registered agent for BNSF in 2010.

The taxpayer reported $470 of dividend income from BNSF on his 2009 tax return. The IRS claimed the taxpayer should have reported $1,410 in total dividend income from BNSF. Computershare sent a letter to the IRS dated February 28, 2014, with an attached copy of Form 1099-DIV stating that it had issued the 1099-DIV to the taxpayer. The 1099-DIV reported $1,410 in dividend income and was properly addressed to the taxpayer’s home address.

The taxpayer testified in court that he did not receive the disputed dividend payments in 2009 or a Form 1099-DIV reporting those payments and that he does not recall having negotiated any checks. His testimony included details regarding the acquisition of BNSF by Berkshire Hathaway and his persistent but unsuccessful attempts to make inquiries with Computershare and Wells Fargo about the disputed dividend payments.

The court said it decides whether a witness’s testimony is credible based on objective facts, the reasonableness of the testimony, the consistency of statements made by the witness, and the demeanor of the witness. The taxpayer had devoted a substantial amount of time to contest the relatively small amount of tax liability at issue here, and he testified consistently, clearly, and with considerable conviction in explaining that he did not receive the disputed dividend payments. The court was persuaded to rule that the taxpayer did not receive the disputed dividend payments in 2009.