T.C. Memo. 1995-475
UNITED STATES TAX COURT
MAURICE H. SOCHIA AND BEATRICE M. SOCHIA, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 26675-93. Filed October 4, 1995.
Maurice H. Sochia and Beatrice M. Sochia, pro sese.
T. Richard Sealy III, for respondent.
MEMORANDUM OPINION
KÖRNER, Judge: Respondent determined deficiencies in and
additions to petitioners' Federal income taxes for the years and
in the amounts as follows:
Additions to Tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654(a)
1990 $21,079 $4,638 $1,204
1991 13,798 3,450 790
All statutory references are to the Internal Revenue Code
in effect for the years in issue, and all Rule references are to
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the Tax Court Rules of Practice and Procedure, except as
otherwise noted.
In the petition as originally filed herein, petitioners
alleged that they were residents and citizens of Texas and were
not subject to United States taxes; that they filed "Fifth
Amendment" returns of income and were justified in doing so; that
the U.S. tax system is voluntary and petitioners have not elected
to file returns thereunder; that petitioners do not understand
the legal requirements of filing income tax returns; and
petitioners further alleged certain amounts with respect to their
gross receipts, adjustments to gross receipts, deductions, and
exemptions for the years 1990 and 1991. Finally, petitioners
alleged respondent owes them the total of $8,345 for both years.
Respondent filed a motion to dismiss herein for failure to
state a claim. The Court ordered a new petition, with specific
errors of respondent alleged therein, and specific allegations of
facts, and the grounds, which petitioners rely upon. Petitioners
replied to respondent's motion to dismiss, asserting generally
the same protester claims as in the petition, and adding a few
others, including allegations that the Federal Government was
engaged in "plundering" petitioners.
After a hearing by the Court, all petitioners' lengthy
protester rhetoric was ordered stricken by the Court, except for
paragraph 2 of petitioners' response to respondent's motion which
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was ordered to be filed as an amended petition on February 10,
1994.
Said paragraph 2 contained allegations by petitioners as to
their gross receipts, gross income, adjustments to income,
deductions, exemptions, and net taxable income for 1990 and 1991,
respectively.
Respondent filed an answer denying all material parts of the
amended petition, and the case was at issue on April 11, 1994.
Thereafter, on September 6, 1994, petitioners filed a motion
for summary judgment in which petitioners repeated again the tax
protester rhetoric that had been struck from the first petition,
e.g., (a) that respondent's statutory notice was defective as a
matter of law; (b) that respondent had no jurisdiction to
determine deficiencies against petitioners; and (c) whether
respondent could convert "a voluntary noncompulsory tax system as
enacted by Congress" into a "nonvoluntary compulsory tax system".
The Court answered the contentions of petitioners in an
order dated September 14, 1994, in which, after summarizing
petitioners' contentions, the Court denied the motion for summary
judgment by petitioners, and quoted Lonsdale v. Commissioner, 661
F.2d 71, 72 (5th Cir. 1981), affg. T.C. Memo. 1981-122, which
said:
Appellant's contentions are stale ones, long
settled against them. As such, they are frivolous.
Bending over backwards, in indulgence of appellant's
pro se status, we today forbear the sanctions of * * *
[damages for frivolous appeals]. We publish this
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opinion as notice to future litigants that the
continued advancing of these long-defunct arguments
invites such sanctions, however.
Undeterred, on September 30, 1994, petitioners moved for
reconsideration of the Court's order dated September 14, 1994,
advancing many of the same arguments theretofore rejected, in a
document of some 22 pages. It was denied.
On June 24, 1994, prior to petitioners' motion for summary
judgment, the order in connection therewith, petitioners' motion
for reconsideration thereof, and prior to trial herein (on
November 29, 1994), the United States Court of Appeals for the
Fifth Circuit affirmed this Court in petitioners' tax case
involving the year 1989, reported at Sochia v. Commissioner, 23
F.3d 941. In the Tax Court in that earlier case, petitioners
argued, as here, that their Fifth Amendment returns were valid,
that the U.S. tax system was voluntary, not mandatory, that the
determination of deficiencies against them violated their due
process rights as citizens of Texas, and that respondent had no
jurisdiction over them. The Tax Court had dismissed petitioners'
claim therein as failing to state a cause of action.
The Court of Appeals for the Fifth Circuit agreed with the
Tax Court, and characterized petitioners' arguments as stale
protester rhetoric long since discredited and now frivolous. The
Court of Appeals affirmed the Tax Court's determination of
deficiencies and additions to tax against petitioners, and,
consolidating petitioners' appeals from the District Court, also
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affirmed the approval by that court of a penalty imposed by
respondent for filing a frivolous return.
Finally, the Court of Appeals imposed double costs and
damages against petitioners for bringing such frivolous appeals.
All this was known to petitioners well in advance of trial
and briefing in the instant case. As though it had never
happened, petitioners went right ahead in the matter before us,
repeating the same stale and discredited protester arguments and
consuming valuable time of the Court, as well as respondent's
counsel, in reading and responding to them.
In the stipulation of facts executed by the parties and
filed at trial herein, and on brief, respondent made certain
concessions as to the amount of deductible expenses incurred by
petitioners, and as to the correct amount of gross income of
petitioners for the years 1990 and 1991, and such concessions
will be given effect under Rule 155 in arriving at the decision
which is to be entered herein.1
As for the rest of it, we see no need to catalog
petitioners' contentions and painstakingly address them. We have
dealt with most of them before. Moreover, as the Court of
Appeals for the Fifth Circuit has remarked: "We perceive no need
to refute these arguments with somber reasoning and copious
1
Respondent made the concessions herein after having
examined petitioners' books and records, which had been made
available to her by petitioners only after the statutory notice
herein was issued.
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citation of precedent; to do so might suggest that these
arguments have some colorable merit." Crain v. Commissioner, 737
F.2d 1417 (5th Cir. 1984).
Petitioners have not shown that they incurred additional
expenses beyond those allowed by respondent or that their gross
income as determined in the notice of deficiency should be
reduced by any amount greater than that which respondent has
agreed to and conceded. It was petitioners' burden to make such
a showing. Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933).
Thus, respondent's determinations of the deficiency, as modified
to give effect to respondent's concessions herein, must stand.
The additions to tax for failure to file returns under
section 6651(a) for each of the years must likewise be approved.
A Form 1040 which contains only "object Fifth Amendment" entries
is not a Federal income tax return. Beard v. Commissioner, 82
T.C. 766, 777 (1984), affd. 793 F.2d 139 (6th Cir. 1986). This
is true even where information forms are attached to the form.
Reiff v. Commissioner, 77 T.C. 1169, 1177-1179 (1981).
Finally, petitioners have not alleged, let alone shown, that
they had any credible fear of prosecution that could remotely
justify claiming the Fifth Amendment with respect to the
reporting of any given item on their returns. Reiff v.
Commissioner, supra.
We also approve respondent's imposition of the addition to
tax for failure to pay estimated income tax under section 6654(a)
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for each of the years in issue. The addition to tax is mandatory
in the absence of specified exemptions, Grosshandler v.
Commissioner, 75 T.C. 1 (1980), and petitioners have not shown
that any of the exemptions apply to them.
We turn now to respondent's request that a penalty against
petitioners under section 6673(a) be awarded. As relevant
herein, section 6673(a)(1) authorizes the Tax Court to require a
taxpayer to pay to the United States not in excess of $25,000
whenever it appears that proceedings have been instituted or
maintained by the taxpayer primarily for delay or that the
taxpayer's position in such proceeding is frivolous or
groundless.
The record in this case convinces us that petitioners were
not interested in disputing the merits of either the deficiencies
in income tax or the additions to tax determined by respondent in
the notice of deficiency. Rather, the record demonstrates that
petitioners regarded this case as a vehicle to protest the tax
laws of this country and espouse their own misguided views.
A petition to the Tax Court is frivolous "if it is contrary
to established law and unsupported by a reasoned, colorable
argument for change in the law". Coleman v. Commissioner, 791
F.2d 68, 71 (7th Cir. 1986). Petitioners' position as set forth
in the petition, motion for summary judgment, and other filings
consists solely of stale and time-worn tax protester rhetoric.
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Based on well-established law, petitioners' position is frivolous
and groundless.
We also are convinced that petitioners instituted and
maintained this proceeding primarily, if not exclusively, for
purposes of delay. Having to deal with this matter wasted the
Court's time, as well as respondent's. Moreover, taxpayers with
genuine controversies were delayed. We find all of this
particularly egregious when we consider that petitioners were
aware of the outcome of their 1989 case in the Fifth Circuit, on
much the same grounds, prior to the time the trial herein
occurred, as we have recounted above. Cf. Sandvall v.
Commissioner, 898 F.2d 455, 459 (5th Cir. 1990), affg. T.C. Memo.
1989-189 and T.C. Memo. 1989-56.
In view of the foregoing, we will exercise our discretion
under section 6673(a)(1) and require petitioners to pay a penalty
to the United States in the amount of $2,000 for each of the
years here in issue. Coleman v. Commissioner, supra at 71-72;
Crain v. Commissioner, supra at 1417-1418; Coulter v.
Commissioner, 82 T.C. 580, 584-586 (1984); Abrams v.
Commissioner, 82 T.C. 403, 408-411 (1984).
In order to reflect the foregoing,
Decision will be entered
under Rule 155.