Black v. Commissioner

T.C. Memo. 1995-560

UNITED STATES TAX COURT

JOHN S. BLACK, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 11571-95. Filed November 27, 1995.

John S. Black, pro se.

Peter Reilly and Paul L. Dixon, for respondent.

MEMORANDUM OPINION

ARMEN, Special Trial Judge: This case was assigned pursuant

to the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1

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.
(continued...)
 This case 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. John S. Black (petitioner)

resided in Las Vegas, Nevada, at the time that the petition was

filed in this case.

Respondent's Notices of Deficiency

By separate notices, each dated March 24, 1995, respondent

determined deficiencies in, and additions to, petitioner's

Federal income taxes for the taxable years 1991 and 1992 as

follows:

Additions to tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654(a)

1991 $3,844 $601.50 $128.38
1992 6,067 714.00 109.01

The deficiency in income tax for 1991 is based on

respondent's determination that petitioner failed to report on an

income tax return for the taxable year 1991: (1) Wages from

three separate payors in the amounts of $5,568, $3,265, and

$9,411, respectively; (2) unemployment compensation in the amount

of $6,973; (3) short-term capital gains in the amount of $3,488;

and (4) dividend income in the amount of $5. The deficiency in

income tax for 1992 is based on respondent's determination that

petitioner failed to report on an income tax return for the

taxable year 1992: (1) Wages in the amount of $34,481; and (2)

unemployment compensation in the amount of $3,036. The additions

1
(...continued)
 - 3 -

to tax under section 6651(a)(1) are based on respondent's

determination that petitioner's failure to file timely income tax

returns for 1991 and 1992 was not due to reasonable cause. The

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

determination that petitioner failed to pay the requisite amount

of estimated income taxes for each of the years in issue.2

Petitioner's Petition and Amended Petition

Petitioner filed an imperfect petition for redetermination

on June 26, 1995, attaching thereto the first page of the two

notices of deficiency described above. The imperfect petition

states:

I WOULD LIKE TO PETITION THIS NOTICE OF DEFICIENCY AND
ALL OF THE OTHER LIENS (LIES) & CRIMINAL ACTS THAT THE
INTERNAL REVENUE SERVICE HAS COMMITTED AGAINST ME.
IF YOU PEOPLE OPERATE LIKE THE "GESTAPO" TYPE
INDIVIDUALS THAT I HAVE BEEN DEALING WITH IN THE PAST--
THIS TOO IS A WASTE OF TIME, BECAUSE THE "TAX COURT"
HAS TO BE WHY THE TERM [deletion in original]
ORIGINATED IN THE FIRST PLACE.
UNTIL YOU RETURN THE PROPERTY THAT HAS BEEN STOLEN FROM
ME I SEE NO REASON TO DEAL WITH YOU ON ANY LEVEL.
ACCORDING TO YOUR OWN CODE--SECTION 7806(b)
CONSTRUCTION OR TITLE--THE INTERNAL REVENUE CODE HAS
"NO LEGAL EFFECT."

A legend is stamped on the petition just above petitioner's

signature which states: "With express reservation of all my

2
The notices of deficiency indicate that petitioner is
entitled to prepayment (withholding) credits in the amounts of
$1,438 and $3,211 for the taxable years 1991 and 1992,
respectively.
 - 4 -

rights in law, equity and all other natures of law. 'Without

Prejudice' UCC 1-207".3

On June 28, 1995, the Court issued an Order directing

petitioner to file a proper amended petition on or before August

28, 1995. On August 30, 1995, petitioner filed an amended

petition using a petition form furnished by the Court. Although

paragraph 1 of the amended petition states that petitioner

disagrees with tax deficiencies for the years 1984 through 1992,

the items listed in paragraph 3 of the amended petition

identifying the specific amounts in dispute are limited to the

deficiencies and additions to tax set forth in the deficiency

notices for 1991 and 1992.4 Paragraph 4 of the amended petition

provides in its entirety as follows:

AS Reads $6,067.00 SHOULD BE 00 AS READS $823.00
SHOULD BE 0
AS READS $3,844.00 SHOULD BE -0- AS READS $730.00
SHOULD BE -0-
Disagreement is based on I.R.C. Sections 3121(a)(7)(A)
and 3121 (b)(3)(B) and refundable under I.R.C. Section
3503. Also see Subsection 7806(b) I.R.C. 6343(a)(D)

Respondent's Rule 40 Motion and Subsequent Developments

3
We understand this citation to refer to sec. 1-207 of the
Uniform Commercial Code. That section is entitled "Performance
or Acceptance Under Reservation of Rights" and the current
version thereof appears as Nev. Rev. Stat. sec. 104.1207 (1993).
4
Respondent states that she is unaware of any notices of
deficiency or collection actions pending against petitioner other
than the notices of deficiency for 1991 and 1992. Under the
circumstances, we conclude that the Court's jurisdiction in this
case is limited to petitioner's liability for the taxable years
1991 and 1992.
 - 5 -

On September 14, 1995, respondent filed the Motion To

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

Granted that is presently pending before the Court. In her

motion respondent contends, inter alia, that the amended petition

includes "no allegations of justiciable error as to the

adjustments to taxable income made by the respondent."

On September 18, 1995, the Court issued an order directing

petitioner to file a second amended petition on or before October

10, 1995. In particular, the Court directed that the second

amended petition should set 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. The Order also served to notify

petitioner that respondent's motion would be called for hearing

at the Court's Motions Session to be held in Washington, D.C.,

on October 18, 1995.

Petitioner did not comply with the Court's Order dated

September 18, 1995. Rather, on October 16, 1995, petitioner

filed a Rule 50(c) statement repeating the allegations set forth

in his original imperfect petition.5

5
The heart of petitioner's Rule 50(c) statement provides as
follows:

I see no reason to submit an AMENDED claim because
everything was listed on the original filing. I was
under the false impression that the TAX COURT was a
LEGITIMATE COURT, however, further research revealed
(continued...)
 - 6 -

Respondent's motion to dismiss was called for hearing in

Washington, D.C., on October 18, 1995. Counsel for respondent

appeared at the hearing and presented argument on her motion.

Petitioner did not appear at the hearing.

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

5
(...continued)
that in all reality the TAX COURT could be the real
reason that the term [expletive deleted] originated in
the American language. The only thing legal about you
bunch of COMMON CRIMINALS and would be KILLERS is
whatever concept of law that exists is whatever is in
your sick minds. I will pursue this matter at a later
date because I don't have time at the moment for any of
your little mind games. This is submitted without
prejudice under common law and all other forms of law.
 - 7 -

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,

supra at 658 n.19; Gordon v. Commissioner, 73 T.C. 736, 739

(1980).

The petition and amended petition filed in this case do 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. At best, petitioner's arguments amount to

nothing more than tax protester rhetoric and legalistic

gibberish, as demonstrated by the passages from those documents

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 Orders dated June 28, 1995, and September 18,

1995, provided petitioner with opportunities to assign error and

allege specific facts concerning his liability for the taxable

years in issue. Unfortunately, petitioner failed to properly
 - 8 -

respond to the Court's orders. 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 contentions and

painstakingly address them. We have dealt with many of them

before. E.g., 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). 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). The short answer to

petitioner's arguments is that he is not exempt from Federal

income tax or from the imposition of appropriate additions to

tax. See Abrams v. Commissioner, supra at 406-407.

Because petitioner's pleadings do not state a claim upon

which relief can be granted, we shall grant respondent's motion

to dismiss. See Scherping v. Commissioner, 747 F.2d 478 (8th

Cir. 1984).

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

against petitioner under section 6673(a).
 - 9 -

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 petitioner was

never interested in disputing the merits of either the

deficiencies in income taxes or the additions to tax as

determined by respondent in the notices of deficiency. Rather,

the record demonstrates that petitioner regards this case as a

vehicle to protest the tax laws of this country and espouse his

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 petition and amended petition and as amplified by his Rule

50(c) statement, 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
 - 10 -

genuine controversies were delayed. Under the circumstances

herein, a penalty is warranted under section 6673(a).

In view of the foregoing, we will sua sponte exercise our

discretion under section 6673(a)(1) and require petitioner to pay

a penalty to the United States in the amount of $1,000. 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,

An order and decision will be

entered granting respondent's motion

to dismiss and imposing a penalty upon

petitioner pursuant to section

6673(a)(1).