Erwin v. Commissioner

T.C. Memo. 1995-498

UNITED STATES TAX COURT

DUANE B. AND LINDA L. ERWIN, ET AL.,1 Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket Nos. 8625-95, 8626-95, Filed October 17, 1995.
8627-95.

Stuart Spielman and James A. Kutten, for respondent.

MEMORANDUM OPINION

DAWSON, Judge: These related cases were assigned to Special

Trial Judge Robert N. Armen, Jr., pursuant to the provisions of

1
The following cases are related and considered herewith:
Duane B. Erwin, docket No. 8626-95; and Linda L. Erwin, docket
No. 8627-95. A related case involving Angela D. Erwin, docket
No. 8624-95, was previously dismissed for lack of jurisdiction.
section 7443A(b)(4) and Rules 180, 181, and 183.2 The Court

agrees with and adopts the Opinion of the Special Trial Judge,

which is set forth below.

OPINION OF THE SPECIAL TRIAL JUDGE

ARMEN, Special Trial Judge: Each of these cases is 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.

Petitioners resided in Independence, Missouri, at the time

their petitions were filed in these cases.

Respondent's Notices of Deficiency

By notices dated February 23, 1995, respondent determined

deficiencies in petitioners' Federal income taxes for the taxable

years 1992 and 1993, as well as a penalty and additions to tax,

as follows:

Docket No. 8625-95
Duane B. and Linda L. Erwin
Penalty
Year Deficiency Sec. 6662(a)

1992 $14,029 $2,799

Docket No. 8626-95
Duane B. Erwin

Additions to tax
Year Deficiency Sec. 6651(a) Sec. 6654(a)

1993 $4,363 $1,156 $183

2
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.
 - 3 -

Docket No. 8627-95
Linda L. Erwin

Additions to tax
Year Deficiency Sec. 6651(a) Sec. 6654(a)
1993 $4,356 $1,089 $182

The deficiency in income tax for 1992 is based on

respondent's determination that petitioners failed to report the

following items of income:

Item of income Amount

Wages (Hallmark Cards, Inc.) $626
Interest (United Consumers Credit Union) 124
IRA distribution (United Consumer C/U) 56,417
Total 57,167

The deficiency in income tax includes the 10-percent additional

tax imposed by section 72(t) for premature distributions from

qualified retirement plans. The penalty under section 6662(a) is

based on respondent's determination that the underpayment of tax

for 1992 is due to negligence or intentional disregard of rules

or regulations.

Insofar as petitioner Duane B. Erwin is concerned, the

deficiency in income tax for 1993 is based on respondent's

determination that petitioner failed to report on a timely-filed

income tax return for that year: (1) Wages from Hallmark Cards,

Inc., and (2) income from self-employment, as reconstructed by

respondent. The deficiency in income tax includes the self-

employment tax. The addition to tax under section 6651(a) is

based on respondent's determination that petitioner failed to
 - 4 -

file a timely income tax return for 1993. Finally, the addition

to tax under section 6654(a) is based on respondent's

determination that petitioner failed to pay the requisite

estimated income tax for 1993.

Insofar as petitioner Linda L. Erwin is concerned, the

deficiency in income tax for 1993 is based on respondent's

determination that petitioner failed to report income from self-

employment, as reconstructed by respondent, on a timely filed

income tax return for that year. The deficiency in income tax

includes the self-employment tax. The addition to tax under

section 6651(a) is based on respondent's determination that

petitioner failed to file a timely income tax return for 1993.

Finally, the addition to tax under section 6654(a) is based on

respondent's determination that petitioner failed to pay

estimated income tax for 1993.

Petitioners' Petition at Docket No. 8625-953

Petitioners filed a petition for redetermination on May 24,

1995. In their petition, petitioners admit that "citizens and

resident aliens of the United States are taxed on all their net

3
The petition filed at docket No. 8626-95 by petitioner
Duane B. Erwin and the petition filed at docket No. 8627-95 by
petitioner Linda L. Erwin are virtually identical to the petition
filed by petitioners at docket No. 8625-95. Similarly, the
history of docket Nos. 8626-95 and 8627-95 subsequent to the
filing of the petitions parallels exactly the history of docket
No. 8625-95. Accordingly, we shall limit our discussion in this
Opinion to the petition filed at docket No. 8625-95. It should
be understood, however, that what we say in respect of that
docket applies equally to the other two dockets.
 - 5 -

income regardless of its source." Nevertheless, petitioners

allege that they are not subject to the Federal income tax

because they are "without the jurisdiction" of the United States.

In this regard, petitioners allege that they are neither United

States citizens nor resident aliens because they are "state

citizens of Missouri (not State of Missouri)". Petitioners also

allege that they are not nonresident aliens engaged in a trade or

business within the United States, and that they are not

nonresident aliens who have elected to be treated as resident

aliens.

Petitioners attached a number of documents to their

petition. One such document is an "Affidavit in Support of

Petition". This document states in part:

That Duane B. Erwin and Linda L. Erwin, the
workmanship of God, are naturally in a state of perfect
freedom to order their actions, and dispose of their
possessions and persons, as they think fit, within the
bounds of the law of nature, that is, the law of reason
and common equity, without asking leave, or depending
upon the will of any other man.

* * * * * * *

That Duane B. Erwin and Linda L. Erwin are state
citizens of Missouri, and have continually abode in
Jackson County, Missouri.

That Missouri is a free and independent State
united by and under the Constitution of the United
States.

That 26 U.S.C. (I.R.C. 1939 and 1954) imposes NO
tax on the person of the state citizen within the
jurisdiction of Missouri, a free and independent state.
 - 6 -

Petitioners also attached to their petition a series of

documents identified as "Exodus Documents", which petitioners

apparently filed with the local recorder's office in Missouri and

which include, inter alia, an "Abjuration of Citizenship", a

"Declaration of Citizenship", and "Affidavit of Pledge". The

"Abjuration of Citizenship" states as follows:

I, Duane B. Erwin/Linda L. Erwin, a NATURAL
FREEBORN NATIVE in Jackson County, Missouri, having
obtained tender mercy from God our Saviour, who will
have all men to be saved, and to come unto the
knowledge of the truth. For there is one God, and one
mediator between God and men, the man Christ Jesus; who
gave himself a ransom for all, to be testified in due
time.

And I thank Jesus Christ, Son of the living God,
that he hath delivered me from this present evil world.
Now having been delivered from the power of darkness
and translated into the kingdom of God's dear Son,
being of full age, possessed of a sound mind, and not
acting under fraud, duress, or undue influence, do
solemnly swear and affirm the following:

1. That of my own free will, I voluntarily,
intentionally and willingly abjure, disavow, and
relinquish the citizenship of the United States, and
renounce and abandon with solemnity allegiance to the
United States.

2. That the United States is a foreign country, a
private corporation. I am not a member of the
aforesaid foreign corporation, the United States. I am
not a U.S. Citizen, and I do not elect to be a
resident-alien of the United States (District of
Columbia), its territories or possessions. I freely
and wholly choose to renounce and quit the United
States forever and never to return under its
jurisdiction.

3. That all vows, oaths, anathemas, obligations,
pledges of all names, which I have vowed, sworn,
devoted, or bound myself to, from birth until this 3rd
day of March, 1995, I repent, of them all, they shall
 - 7 -

all be deemed forgiven, abjured, absolved, annulled,
void and made of no effect, and shall not stand; the
vows shall not be reckoned vows, the obligations shall
not be obligatory, nor the oaths considered as oaths;
all signatures of the property known as Duane B.
Erwin/Linda L. Erwin that appear on all United States
Federal Forms, Contracts, Codicils, or documents of any
description are repudiated and forever cast into
forgetfulness.

The "Declaration of Citizenship", the second of the several

"Exodus Documents", states in part as follows:

Blessed be the God and Father of our Lord Jesus
Christ, who according to his abundant mercy hath
begotten us again unto a lively hope by the
resurrection of Jesus Christ from the dead, to an
inheritance incorruptible, undefiled, which does not
fade, reserved for the saints of the Most High, who are
kept by the power of God through faith unto salvation
ready to be revealed in the last time.

* * * * * * *

1. That I, Duane B. Erwin/Linda L. Erwin, a
Follower of God, Natural Born Citizen, Free Person,
born in Green County, Missouri, of my own freewill, do
knowingly, willingly, intentionally and voluntarily vow
and devote upon solemn PLEDGE that I am a Citizen of
Missouri, and any claim to the contrary is based on
fraud, and is null and void and shall not stand, nunc
pro tunc.

The "Affidavit of Pledge" is a pledge of allegiance to the

"Missouri Republic" and pledges to "defend and protect this my

Country, Missouri, its Sovereignty and Constitution from both

foreign and domestic enemies."

Respondent's Rule 40 Motion and Subsequent Developments

As indicated, on June 28, 1995, respondent filed a Motion To

Dismiss For Failure To State A Claim Upon Which Relief Can Be

Granted. Shortly thereafter, on June 30, 1995, the Court issued
 - 8 -

an order calendaring respondent's motion for hearing and also

directing petitioners to file a proper amended petition in

accordance with the requirements of Rule 34. In particular, the

Court directed petitioners to file a proper amended petition

setting forth with specificity each error allegedly made by

respondent in the determination of the deficiency and separate

statements of every fact upon which the assignments of error are

based. Petitioners did not file an amended petition and did not

otherwise respond to the Court's Order.

Respondent's motion to dismiss was called for hearing in

Washington, D.C., on August 2, 1995, and again on August 16,

1995. Counsel for respondent appeared at both hearings and

presented argument and evidence in support of the pending motion.

Petitioners did not appear at either hearing, nor did they file

any written statement of their position under Rule 50(c).4

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

that would entitle him or her to relief. Conley v. Gibson, 355

4
Petitioners were reminded of the applicability of Rule
50(c) in the Court's Order dated June 30, 1995, calendaring
respondent's motion for hearing.
 - 9 -

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 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

(1933). Moreover, any issue not raised in the pleadings is

deemed to be conceded. Rule 34(b)(4); Jarvis v. Commissioner, 78

T.C. 646, 658 n.19 (1982); Gordon v. Commissioner, 73 T.C. 736,

739 (1980).

The 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
 - 10 -

passages from the petition, and the attachments thereto, that we

have quoted above. 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 June 30, 1995, provided petitioners

with an opportunity to assign error and allege specific facts

concerning their liability for the taxable year in issue.

Unfortunately, petitioners 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 painstakingly address petitioners' basic

argument. The short answer to it is that petitioners are not

exempt from Federal income tax or from the imposition of

appropriate penalties and additions to tax. See Abrams v.

Commissioner, supra at 406-407. 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

citation of precedent; to do so might suggest that these

arguments have some colorable merit." Crain v. Commissioner, 737

F.2d 1417, 1417 (5th Cir. 1984).

Because the petition fails to state a claim upon which

relief can be granted, we will grant respondent's motion to
 - 11 -

dismiss for failure to state a claim. See Scherping v.

Commissioner, 747 F.2d 478 (8th Cir. 1984); see also Nieman v.

Commissioner, T.C. Memo. 1993-533; Solomon v. Commissioner, T.C.

Memo. 1993-509, affd. without published opinion 42 F.3d 1391 (7th

Cir. 1994).

We turn now, on our own motion, to the award of a penalty

against petitioners 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

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 deficiency

in income tax or the penalty determined by respondent in the

notice of deficiency. Rather, the record demonstrates that

petitioners regard 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, consists solely of tax protester rhetoric and
 - 12 -

legalistic gibberish. Based on well established law,

petitioners' position is frivolous and groundless.

We are also 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.

In view of the foregoing, we will exercise our discretion

under section 6673(a)(1) and in our decision in docket No.

8625-95 require each petitioner to pay a penalty to the United

States in the amount of $1,500. 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, supra at 408-411.

To reflect the foregoing,

Orders of dismissal and

decisions will be entered in

each case.