T.C. Memo. 1995-495
UNITED STATES TAX COURT
TASHINA BAKER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
ROBERT R. BAKER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 5931-95, 5932-95. Filed October 16, 1995.
Tashina Baker and Robert R. Baker, pro sese.
Stuart Spielman and Stephanie R. Jensen, for respondent.
MEMORANDUM OPINION
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ARMEN, Special Trial Judge: These cases were heard pursuant
to the provisions of section 7443A(b)(3) and Rules 180, 181, and
182.1
These cases are before the Court on respondent's Motion To
Dismiss For Failure To State A Claim Upon Which Relief Can Be
Granted, filed pursuant to Rule 40 and section 6673(a).
Petitioners resided in Denton, Texas, at the time their
petitions were filed in these cases.
Respondent's Notices of Deficiency
By notices dated January 18, 1995, respondent determined
deficiencies in, and additions to, petitioners' Federal income
taxes for the taxable years 1990, 1991, and 1992, as follows:
Docket No. 5931-95
Tashina Baker
Addition to tax
Year Deficiency Sec. 6651(a)(1)
1990 $454 $114
1991 611 153
1992 623 156
Docket No. 5932-95
Robert R. Baker
Additions to tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654(a)
1990 $2,490 $623 ---
1991 2,554 639 $130
1992 2,389 597 104
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable years in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
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The deficiencies in income taxes are based on respondent's
determination that petitioners failed to report income on timely
filed income tax returns for the taxable years in issue. Because
petitioners were married and domiciled in Texas, a community
property state, respondent allocated one-half of the total income
for each year, as reconstructed by respondent, to each
petitioner. Respondent also determined that all of the total
income for each year, except for $900 in 1991 and $1,450 in 1992,
is attributable to petitioner Robert R. Baker for self-employment
tax purposes. See sec. 1402(a)(5)(A); see also sec. 164(f). It
is this latter determination that explains the difference between
petitioners regarding the amount of the deficiencies determined
by respondent.
The additions to tax under section 6651(a)(1) are based on
respondent's determination that petitioners' failure to file
timely income tax returns for the years in issue was not due to
reasonable cause. The additions to tax under section 6654(a) are
based on respondent's determination that petitioners failed to
pay the requisite estimated income taxes.
Petitioner Tashina Baker's Petition and Amended Petition2
2
The petition filed at docket No. 5931-95 by petitioner
Tashina Baker and the petition filed at docket No. 5932-95 by
petitioner Robert R. Baker are virtually identical. Similarly,
the history of docket No. 5931-95 subsequent to the filing of the
petitions parallels exactly the history of docket No. 5932-95.
Accordingly, we shall limit our discussion in this Opinion to the
petition filed at docket No. 5931-95. It should be understood,
(continued...)
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Petitioner3 filed a petition for redetermination on April
20, 1995. The crux of petitioner's position in the petition
appears to be that the Commissioner may determine a deficiency
against a taxpayer only if the taxpayer first files a return and
that the Commissioner's preparation of a return for the taxpayer
pursuant to section 6020(b) does not obviate the need for a
return filed by the taxpayer himself or herself.
On May 30, 1995, petitioner sua sponte filed an amended
petition. The amended petition includes allegations that wages
are not income because a person's labor is property in which the
person has a basis equal to its fair market value. Thus, the
amended petition alleges in part as follows:
During the years of 1990, 1991, and 1992 the
Petitioner did in fact receive payment for services
actually rendered in a fair market value exchange under
26 USC §83, §1001, §1011 and §1012 not comprising
taxable income, said acts performed as Unalienable
rights to life, liberty, pursue happiness and acquire
property, with labor being property.
At all times during the years of 1990, 1991 and
1992 any failure by the Respondent to recognize the
Unalienable Rights of the Petitioner and the Fair
Market Value Exchange of [her] labor in accordance with
26 USC §83, §1001, §1011 and §1012 would amount to a
denial of due process and constitutional and civil
rights violations.
2
(...continued)
however, that what we say in respect of that docket applies
equally to docket No. 5932-95.
3
For the sake of convenience, we will refer to petitioner
Tashina Baker as petitioner. See supra note 2.
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At all times during the years 1990, 1991 and 1992
the Petitioner possess[ed] and did possess [her]
Sovereign (God-given) Rights to own, acquire and
protect [her] private property.
At all times during the years of 1990, 1991 and
1992 the Petitioner possessed and does possess [her]
"labor" as property.
Respondent's Rule 40 Motion and Subsequent Developments
As indicated, respondent filed a Motion To Dismiss For
Failure To State A Claim Upon Which Relief Can Be Granted. On
July 19, 1995, shortly after respondent filed her motion to
dismiss, the Court issued an order calendaring respondent's
motion for hearing and also directing petitioner to file a proper
second amended petition in accordance with the requirements of
Rule 34. In particular, the Court directed petitioner to file a
proper second amended petition setting forth with specificity
each error allegedly made by respondent in the determination of
the deficiencies and separate statements of every fact upon which
the assignments of error are based.
On August 14, 1995, petitioner filed the following: (1)
Objection to respondent's motion, (2) Rule 50(c) statement, and
(3) second amended petition. The second amended petition sounds
a single theme, of which the following statements are
representative:
a return which [does] not "voluntarily assess" [does]
not provide the necessary Material Facts upon which the
Commissioner [can] determine a tax liability * * *
Therefore Petitioner believing she is a non-
taxpayer and not required to file, further shows that
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even if she were compelled by law to report, she is not
mandated to assess, hence all of the court's rulings on
the voluntary assessment aspect of the tax system, and
without the voluntary assessment and material facts the
government prepared bookkeeping 'dummy/substitute'
forms/returns are without a basis in law or fact upon
which to rely for the authority to examine or audit.
The bookkeeping returns prepared by the Respondent are
Forms 1040. Any issue alleged for failure to report or
file is an issue not justiciable in this court, for
this court has only been mandated to determine the
alleged civil liability, if there is one, after it has
exercised its review of the procedures used by
Respondent in the determinations made. * * *
* * * * * * *
Petitioner states that the Form 1040 has not been
authorized by the Office of Management and Budget for
the collection of information/return for the Individual
Income Tax found in Title 26 United States Code §1,
which is a direct tax * * *.
* * * * * * *
Petitioner states that she is not identified in
the Internal Revenue Code by person, class of persons,
and/or activity as a taxpayer (as defined in the
internal revenue code) and therefore Petitioner is not
subject to an internal revenue tax.
Petitioner has never been afforded a hearing to
determine if she is a "taxpayer" as defined within the
definition of the internal revenue code. Since non-
taxpayers are not within the purview of the code they
are not subject to any internal revenue tax. Therefore
the above determinations are in error.
Since I am not that taxpayer, and the respondent
has not made such an assertion nor is there any
evidence before this Court that I am engaged in any
revenue taxable activity, happening or event, for which
Congress possess[es] legislative jurisdiction, and for
which the Commissioner possess[es] subject matter
jurisdiction, the notice of deficiency constitutes a
"counterfeit security" and its signer is subject to
punishment under Title 18 United States Code Section
552 as a felony. Since this counterfeit security was
sent through the mail the sender has committed mail
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fraud. Since this counterfeit security says that I am
liable for a tax without stating how I became liable it
constitutes the making of a false statement on a
government form in violation of 26 USC Section 7214(7).
Petitioner attached to her second amended petition a number
of documents, including some 18 pages of OMB-related documents
pertaining to Form 1040 and its various schedules. Petitioner
also attached to her second amended petition an "Affidavit in
Commerce". This document provides in part as follows:
I was not afforded a judicial hearing of any kind
before the appellation of "taxpayer" was bestowed upon
me.
To my best knowledge and belief the notice of
deficiency served on me is a counterfeit security.
This affidavit in commerce stands as prima facie
evidence unless rebutted point by point by the
respondent.
I, Tashina Baker, have personally researched the
Notice of Office of Management and Budget Action * * *
with its attached Request for OMB Review * * * and its
attached Form SF-83 Supporting Statement for Form 1040
for 1992 * * * and it is upon this government Form, the
26 Code of Federal Regulations part 602 and the CFR
Index and finding aids that I rebut and refute all
presentments made or alleged to have been made to or
for me, by the Respondent attempting to make me a
taxpayer.
Petitioner's objection and Rule 50(c) statement rely on and
incorporate petitioner's "Affidavit in Commerce"; the objection
and statement also advance additional arguments of equivalent
relevance.
Respondent's motion to dismiss was called for hearing in
Washington, D.C., on August 16, 1995. Counsel for respondent
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appeared at the hearing and presented argument on the pending
motion. Petitioner did not appear at the hearing; however, as
previously indicated, she did file a Rule 50(c) statement.
Discussion
Rule 40 provides that a party may file a motion to dismiss
for failure to state a claim upon which relief can be granted.
We may grant such a motion when it appears beyond doubt that the
party's adversary can prove no set of facts in support of a claim
which would entitle him or her to relief. Conley v. Gibson, 355
U.S. 41, 45-46 (1957); Price v. Moody, 677 F.2d 676, 677 (8th
Cir. 1982).
Rule 34(b)(4) requires that a petition filed in this Court
contain clear and concise assignments of each and every error
which the taxpayer alleges to have been committed by the
Commissioner in the determination of the deficiency and the
additions to tax in dispute. Rule 34(b)(5) further requires that
the petition contain clear and concise lettered statements of the
facts on which the taxpayer bases the assignments of error. See
Jarvis v. Commissioner, 78 T.C. 646, 658 (1982). The failure of
a petition to conform with the requirements set forth in Rule 34
may be grounds for dismissal. Rules 34(a)(1); 123(b).
In general, the determinations made by the Commissioner in a
notice of deficiency are presumed to be correct, and the taxpayer
bears the burden of proving that those determinations are
erroneous. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
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(1933). Moreover, any issue not raised in the pleadings is
deemed to be conceded. Rule 34(b)(4); Jarvis v. Commissioner,
supra at 658 n.19; Gordon v. Commissioner, 73 T.C. 736, 739
(1980).
The second amended petition filed in this case does not
satisfy the requirements of Rule 34(b)(4) and (5). There is
neither assignment of error nor allegation of fact in support of
any justiciable claim. Rather, there is nothing but tax
protester rhetoric and legalistic gibberish, as demonstrated by
the allegations previously quoted. See Abrams v. Commissioner,
82 T.C. 403 (1984); Rowlee v. Commissioner, 80 T.C. 1111 (1983);
McCoy v. Commissioner, 76 T.C. 1027 (1981), affd. 696 F.2d 1234
(9th Cir. 1983).
The Court's order dated July 19, 1995, provided petitioner
with an opportunity to assign error and allege specific facts
concerning her liability for the taxable years in issue.
Unfortunately, petitioner failed to properly respond to the
Court's order. Rather, petitioner elected to continue to proceed
with time-worn tax protester rhetoric. See Abrams v.
Commissioner, supra; Rowlee v. Commissioner, supra; McCoy v.
Commissioner, supra; Karlin v. Commissioner, T.C. Memo. 1990-496.
We see no need to catalog petitioner's arguments and
painstakingly address them. As the Court of Appeals for the
Fifth Circuit has remarked: "We perceive no need to refute these
arguments with somber reasoning and copious citation of
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precedent; to do so might suggest that these arguments have some
colorable merit." Crain v. Commissioner, 737 F.2d 1417, 1417
(5th Cir. 1984). Suffice it to say that petitioner is not exempt
from Federal income tax or from the imposition of appropriate
additions to tax, Olsen v. Commissioner, T.C. Memo. 1995-471; see
Abrams v. Commissioner, supra at 406-407. A tax return filed by
a taxpayer is not a condition precedent to the determination of a
deficiency by the Commissioner, Reichenbach v. Commissioner, T.C.
Memo. 1995-369.4
Because the second amended petition fails to state a claim
upon which relief can be granted, we will grant so much of
respondent's motion that moves to dismiss. See Scherping v.
Commissioner, 747 F.2d 478 (8th Cir. 1984).
We turn now to that part of respondent's motion that moves
for an award of a penalty against petitioner under section
6673(a).
As relevant herein, section 6673(a)(1) authorizes the Tax
Court to require a taxpayer to pay to the United States a penalty
not in excess of $25,000 whenever it appears that proceedings
have been instituted or maintained by the taxpayer primarily for
4
It is unclear whether petitioner's second amended petition
abandoned the argument that "wages are not income". If
petitioner's second amended petition did not abandon this
argument, we observe that both this and other Federal courts have
consistently and uniformly held for many years that wages are
income and that a taxpayer has no basis in his or her labor.
E.g., Lonsdale v. Commissioner, 661 F.2d 71, 72 (5th Cir. 1981),
affg. T.C. Memo. 1981-122; see sec. 61(a)(1).
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delay or that the taxpayer's position in such proceeding is
frivolous or groundless.
The record in this case convinces us that petitioner was not
interested in disputing the merits of either the deficiencies in
income taxes or the additions to tax determined by respondent in
the notice of deficiency. Rather, the record demonstrates that
petitioner regards this case as a vehicle to protest the tax laws
of this country and espouse her 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). Petitioner's position, as set forth
in the second amended petition, consists solely of tax protester
rhetoric and legalistic gibberish. Based on well established
law, petitioner's position is frivolous and groundless.
We are also convinced that petitioner 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.
In view of the foregoing, we will exercise our discretion
under section 6673(a)(1) and require petitioner Tashina Baker and
petitioner Robert R. Baker to each pay a penalty to the United
States in the amount of $500. Coleman v. Commissioner, supra at
71-72; Crain v. Commissioner, supra at 1417-1418; Coulter v.
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Commissioner, 82 T.C. 580, 584-586 (1984); Abrams v.
Commissioner, supra at 408-411.
In order to reflect the foregoing,
Orders of dismissal and
decisions will be entered.