Gammon v. Commissioner

T.C. Memo. 1996-4

UNITED STATES TAX COURT

BRENDA J. GAMMON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 15553-95. Filed January 11, 1996.

Brenda J. Gammon, pro se.

Stuart Spielman and Michael R. McMahon, for respondent.

MEMORANDUM OPINION

ARMEN, Special Trial Judge: This case was heard 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
 This case is before the Court on respondent's Motion To

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

Granted, and the Amendment thereto, filed pursuant to Rule 40.

Petitioner resided in Lacey, Washington, at the time the

petition was filed in this case.

Respondent's Notice of Deficiency

Respondent issued a notice of deficiency to petitioner dated

May 15, 1995. In said notice, respondent determined a deficiency

in petitioner's Federal income tax for the taxable year 1992 in

the amount of $1,204 and an addition to tax under section

6651(a)(1) for failure to timely file in the amount of $291.50.2

The deficiency in income tax is based on respondent's

determination that petitioner failed to report wage and allocated

tip income from various payors as reflected in the following

schedule:

Income Payor Amount

Wages Manpower Int'l Inc. $75
Wages South Sound Red Robin Inc. 53
Wages Kokua, Inc. 1,386
Wages Shari's Management Corp. 87
Wages Hawks Prairie Inn Corp. 2,774
Tips " " 1,125
Wages Evergreen Ballroom 106
Restaurant
Wages TNT, Inc. 4,662

Practice and Procedure.

2
By Order dated Nov. 28, 1995, such part of this case that
related to a redetermination of FICA taxes, any addition to tax
or penalty with respect thereto, statutory interest, and
withholding tax credits was dismissed for lack of jurisdiction
and stricken from the petition.
 - 3 -

Tips " " 3,556
Wages Denny's Restaurants 58
Tips " " 49

The addition to tax under section 6651(a)(1) is based on

respondent's determination that petitioner's failure to timely

file an income tax return for the taxable year in issue was not

due to reasonable cause.

Petitioner's Petition

Petitioner filed her petition on August 14, 1995. The crux

of petitioner's position is that wages are not income, apparently

because of the provisions of section 83 and the notion that a

person's labor is property in which the person has a basis equal

to its fair market value. Thus, the petition includes the

following allegations:

8. Until a compleat [sic] and concise explanation of
why intangible property is not a cost when it is
disposed of to obtain other property and tangible
property IS, 26 CFR 1.83-3(g) must be held to protect
sums received under contract for the purchase of
services from inclusion in gross income. After all, §
61(a) applies only to "gross income" ("Gross Income
Defined") and does not apply to compensation which may
be "excluded by law" (See 1.61-1, -2). Cost is always
excluded.

9. Until these arguments can be statutorily disposed
of, Petitioner contends that the FMV of services can be
included in gross income only by violating § 1001 and,
26 CFR 1.1001-1(a).

Petitioner attached several documents to her petition

composed of over 100 pages of typewritten materials expanding on

the arguments set forth above.

Respondent's Rule 40 Motion and Subsequent Developments
 - 4 -

As indicated, respondent filed a Motion To Dismiss For

Failure To State A Claim Upon Which Relief Can Be Granted, and

the Amendment thereo. On October 6, 1995, the day 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 amended petition in accordance with

the requirements of Rule 34. In particular, the Court directed

petitioner 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. Petitioner

failed to respond to the Court's order.

Respondent's motion to dismiss was called for hearing in

Washington, D.C., on November 8, 1995. Counsel for respondent

appeared at the hearing and presented argument on the pending

motion. Petitioner did not appear at the hearing nor did she

file a Rule 50(c) statement with the Court.3

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

3
Petitioner was reminded of the applicability of Rule
50(c) in the Court's Order dated Oct. 6, 1995.
 - 5 -

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

that the taxpayer alleges to have been committed by the

Commissioner in the determination of the deficiency and any

addition 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

(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 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
 - 6 -

passages from the petition 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 October 6, 1995, provided petitioner

with an opportunity to assign error and allege specific facts

concerning her liability for the taxable year in issue.

Unfortunately, petitioner failed to respond to the Court's order.

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

precedent; to do so might suggest that these arguments have some

colorable merit." Crain v. Commissioner, 737 F.2d 1417, 1417

(5th Cir. 1984). Petitioner's arguments are nothing other than a

variation on the theme that wages are not income. Suffice it to

say 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., Beard v.

Commissioner, 793 F.2d 139 (6th Cir. 1986), affg. per curiam 82

T.C. 766 (1984); Coleman v. Commissioner, 791 F.2d 68, 70 (7th

Cir. 1986); Carter v. Commissioner, 784 F.2d 1006, 1009 (9th Cir.

1986); Olson v. United States, 760 F.2d 1003, 1005 (9th Cir.

1985); United States v. Burton, 737 F.2d 439, 441 (5th Cir.

1984); Gattuso v. Pecorella, 733 F.2d 709, 710 (9th Cir. 1984);
 - 7 -

Funk v. Commissioner, 687 F.2d 264, 265 (8th Cir. 1982), affg.

T.C. Memo. 1981-506; Lonsdale v. Commissioner, 661 F.2d 71, 72

(5th Cir. 1981), affg. T.C. Memo. 1981-122; United States v.

Romero, 640 F.2d 1014, 1016 (9th Cir. 1981) ("Compensation for

labor or services, paid in the form of wages or salary, has been

universally, held by the courts of this republic to be income,

subject to the income tax laws currently applicable."); United

States v. Buras, 633 F.2d 1356, 1361 (9th Cir. 1980); Abrams v.

Commissioner, supra at 407; Rowlee v. Commissioner, supra at

1119-1122; Reiff v. Commissioner, 77 T.C. 1169, 1173 (1981);

Reading v. Commissioner, 70 T.C. 730 (1978), affd. 614 F.2d 159

(8th Cir. 1980); McNeel v. Commissioner, T.C. Memo. 1995-211;

Fischer v. Commissioner, T.C. Memo. 1994-586; Zyglis v.

Commissioner, T.C. Memo. 1993-341, affd. without published

opinion 29 F.3d 620 (2d Cir. 1994); Fox v. Commissioner, T.C.

Memo. 1993-277, affd. without publised opinion 69 F.3d 543 (9th

Cir. 1995); Williams v. Commissioner, T.C. Memo. 1988-368; Allen

v. Commissioner, T.C. Memo. 1987-242; Hebrank v. Commissioner,

T.C. Memo. 1982-496; see sec. 61(a)(1).

Because the petition fails to 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).4

4
Respondent's motion includes a request that the Court
award a penalty to the United States in an appropriate amount
 - 8 -

In order to reflect the foregoing,

An order of dismissal and

decision will be entered.

pursuant to sec. 6673(a). In the exercise of our discretion,
however, we decline to award a penalty in this case.
Nevertheless, petitioner is advised 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.