Friesen v. Commissioner

T.C. Memo. 1996-2

UNITED STATES TAX COURT

DAROLD D. FRIESEN AND ROSELLA M. FRIESEN, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 14372-95. Filed January 3, 1996.

Peter Reilly and Albert B. Kerkhove, for respondent.

MEMORANDUM OPINION

ARMEN, Special Trial Judge: 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 40.1

1
All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code in effect for the taxable years in issue.
(continued...)
 Petitioners resided in Henderson, Nebraska, at the time that

their petition was filed with the Court.

Respondent's Notices of Deficiency

By notices dated May 12, 1995, respondent determined

deficiencies in petitioners' Federal income taxes for the taxable

years 1990 and 1992, as well as additions to tax, as follows:

Darold D. Friesen
Addition to tax
Year Deficiency Sec. 6651(a)(1)

1992 $1,391 $185.75

Rosella M. Friesen

Addition to tax
Year Deficiency Sec. 6651(a)(1)

1990 $709 $177.25

The deficiency in income tax determined against petitioner

Darold D. Friesen is based on respondent's determination that

said petitioner failed to report wages in the amount of $14,564

received during 1992 from Bosselman, Inc. The addition to tax

under section 6651(a)(1) is based on respondent's determination

that petitioner failed to file a timely income tax return for the

taxable year 1992.

The deficiency in income tax determined against petitioner

Rosella M. Friesen is based on respondent's determination that

said petitioner failed to report self-employment tax on non-

employee compensation in the amount of $5,018 received during

1
(...continued)
 - 3 -

1990 from Santa Rosa Sales and Marketing, Inc. The addition to

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

determination that petitioner failed to file a timely income tax

return for the taxable year 1990.

Petitioners' Petition

Petitioners filed a petition for redetermination on July 31,

1995. In their petition, petitioners allege that they are "non-

federal people" who are inhabitants of the Republic State,

Nebraska, which is "without" the United States. In this regard,

petitioners claim "status as defined at CFR 1.871-1(b)(i)".2 The

petition also includes the following allegations, among others:

The Petitioners are Non-Residents of Washington,
D.C., they are non-Residents of any Federal area, and
are alien to the foreign Federal Jurisdiction;

* * * * * * *

The Petitioners are not now, nor have they ever
been "transferees" of the federal funds for their
livelihood;

The Petitioners find no Treasury Dept. delegation
of Authority Order that has been issued or published,
which would provide for finding deficiencies or
assessing them as inhabitants in the Republic State,
Nebraska;

2
For purposes of the income tax, sec. 1.871-1(b), Income
Tax Regs., sets forth 3 classes of nonresident alien individuals.
The first such class, described in sec. 1.871-1(b)(1)(i), Income
Tax Regs., consists of nonresident alien individuals who at no
time during the taxable year are engaged in a trade or business
in the United States.
 - 4 -

The Petitioners find that there are no
implementing regulation for the deficiencies or the
assessments as required by Title 26 at [section]
7805(a);[3]

The Petitioners had no revenue taxable activity
that would come under the stamp tax liability;

* * * * * * *

Respondent has placed these Petitioners into an
"excise tax" category, in error, or mistake.

Respondent's Rule 40 Motion and Subsequent Developments

As indicated, on September 15, 1995, respondent filed a

Motion To Dismiss For Failure To State A Claim Upon Which Relief

Can Be Granted. Shortly thereafter, on September 18, 1995, the

Court issued 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 deficiencies and separate

statements of every fact upon which the assignments of error are

based.

3
Sec. 7805(a) provides as follows:

SEC. 7805. RULES AND REGULATIONS.
(a) Authorization.--Except where such authority is
expressly given by this title to any person other than
an officer or employee of the Treasury Department, the
Secretary shall prescribe all needful rules and
regulations for the enforcement of this title,
including all rules and regulations as may be necessary
by reason of any alteration of law in relation to
internal revenue.
 - 5 -

On October 16, 1995, the Court received a document from

petitioners that was filed as petitioners' Motion for Extension

of Time to File Amended Petition. The Court granted such motion,

extending for a month the time within which petitioners were to

file a proper amended petition and continuing for hearing

respondent's pending motion to dismiss.

On November 20, 1995, petitioners filed an Amended Petition

alleging that "The Respondent errors in establishing a deficiency

for the years 1991, 1992, and 1993." In this regard, however, we

note that respondent only determined a deficiency against

petitioner Rosella M. Friesen for the taxable year 1990 and

against petitioner Darold D. Friesen for the taxable year 1992.

Therefore, the amended petition fails to place in dispute one of

the two taxable years for which deficiencies were determined and

attempts to place in dispute two taxable years for which no

deficiencies were determined.

Apart from the foregoing, petitioners suggest in their

amended petition that Federal Reserve notes are not a form of

legal tender. Their argument concludes as follows:

Who may legally take Federal Reserve Notes in
exchange as a[n] acceptable form of payment? To this
the Petitioner adds that their [sic] exist[s] no legal
way for the Petitioner to satisfy the Commissioner[']s
assessment at any time during this Article I
presentment.

Petitioners also continue to argue in their amended petition

that they enjoy nonresident alien status. In this regard they

argue as follows:
 - 6 -

This Tax Court knows that as long as the Petitioners
are within their Union State boundary, they are Non-
Resident Alien to the United States. Non-Resident to
the United States Jurisdiction and Foreign or Alien to
them as well.

The amended petition also alleges that respondent bears the

burden of proof in respect of the following matters, among

others:

The Respondent bears the burden to prove the
Petitioner is in fact a taxpayer as it relate[s] to 26
U.S.C. section 7701(a)(14).[4]

* * * * * * *

The Respondent bears the burden to prove that the
Petitioner is subject to any Act of Congress, passed
under Congress's whatsoever authority, without the
voluntary election agreeing to be treated as a subject
of such Congressional Authority.

* * * * * * *

The Respondent bears the burden to prove that the
Petitioners some how became subject of a lessor race by
way of becoming "Taxpayers".

Respondent's motion to dismiss was called for hearing in

Washington, D.C., on November 22, 1995. Counsel for respondent

appeared at the hearing and presented argument in support of the

pending motion. Petitioners did not appear at the hearing, nor

did they file any written statement of their position under Rule

50(c).5

4
Sec. 7701(a)(14) defines the term "taxpayer" as "any
person subject to any internal revenue tax."
5
Petitioners were reminded of the applicability of Rule
50(c) in the Court's Order dated Sept. 18, 1995, calendaring
respondent's motion for hearing.
 - 7 -

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

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,

supra; Gordon v. Commissioner, 73 T.C. 736, 739 (1980).
 - 8 -

Neither the petition nor the amended petition filed in this

case satisfies 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 passages from the petition and the amended petition 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 September 18, 1995, provided

petitioners with an opportunity to assign error and allege

specific facts concerning their liability for the taxable years

in issue. The Court's Order dated October 18, 1995, provided

petitioners with yet additional time to file a proper amended

petition. Unfortunately, petitioners failed to properly respond.

Rather, petitioners 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' various

arguments. The short answer to those arguments is that

petitioners are not exempt from Federal income tax or from the

imposition of appropriate 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
 - 9 -

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 and the amended petition fail to state

a claim upon which relief can be granted, we shall grant

respondent's motion to 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).6

In order to reflect the foregoing,

An order of dismissal and

decision will be entered.

6
Respondent's motion does not include a request that the
Court award a penalty to the United States pursuant to sec.
6673(a), and we have decided not to award such a penalty on our
own motion. Petitioners are advised, however, that sec.
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.