T.C. Memo. 1996-24
UNITED STATES TAX COURT
MARK C. NAGY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10430-95. Filed January 24, 1996.
Mark C. Nagy, pro se.
Maria Murphy, for respondent.
MEMORANDUM OPINION
DAWSON, Judge: This case was assigned to Special Trial
Judge Larry L. Nameroff pursuant to the provisions of section
7443A(b)(4) and Rules 180, 181, and 183.1 The Court agrees with
1
All section references are to the Internal Revenue
Code. All Rule references are to the Tax Court Rules of Practice
and Procedure.
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and adopts the Opinion of the Special Trial Judge, which is set
forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
NAMEROFF, 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.
Respondent further moved for the imposition of sanctions pursuant
to section 6673. Petitioner resided in Los Alamitos, California,
at the time the petition was filed in this case.
Respondent by a notice of deficiency dated March 13, 1995,
determined deficiencies in, and additions to, petitioner's
Federal income taxes for the taxable years 1989, 1990, and 1991
as follows:
Additions to tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654(a)
1989 $16,054 $4,014 $1,084
1990 7,923 1,981 521
1991 13,206 3,172 725
The deficiencies in income tax (including self-employment
tax) are based on respondent's determination that petitioner
failed to file income tax returns for the taxable years before
the Court and had gross income, as reconstructed by respondent,
in the respective amounts of $48,337, $29,724, and $40,696.
Respondent further determined that petitioner had unreported
interest in 1989 of $343 and Form W-2 wages in 1991 in the amount
of $3,800 (of which $517 was withheld). The additions to tax
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under section 6651(a)(1) are based on respondent's determination
that petitioner's failure to file timely income tax returns 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 estimated income tax for the years in
issue.
The petition, timely filed, contains the following
allegations: (reproduced exactly)
THE PETITIONER, UPON PRESENTMENT BY INTERNAL REVENUE,
RETURNED AND REFUSED FOR CAUSE UCC 3-501 SAID
PRESENTMENTS WITHOUT DISHONOR. IN ADDITION, PETITIONER
MARK NAGY, IS NOT A "U.S. CITIZEN" NEITHER IS HE A
'RESIDENT NOR INHABITANT' OF THE U.S. AND HAS NO INCOME
EFFECTIVELY CONNECTED WITH THE UNITED STATES THAT MARK
NAGY DID NOT KNOWINGLY OR VOLUNTARILY ENTER INTO ANY
AGREEMENT OR CONTRACT TO BE LIABLE FOR THE NATIONAL
DEBT, OR 'ELECTED' TO BE TREATED AS A RESIDENT OF THE
UNITED STATES UNDER 26 CFR PART 5h; 26 USC, SECTION
6013 (g) & (h) BY THE SIGNING OF FORM 1040 OR OTHER
RELATED U.S. FORMS. MARK NAGY IS NOT A PARTY TO ANY
TRANSACTION WITH THE U.S. LET THE U.S. PRODUCE THE
ORIGINAL SIGNED CONTRACT [SEC.] 871 4(b) FURTHER
PETITIONER SAYETH NOT.
After respondent filed the instant motion to dismiss,
petitioner filed an Objection in which he claims, inter alia,
that self-employment tax is an "excise-taxable" activity and that
3. Petitioner is a non-resident alien for purpose
of the Federal Excise Tax.
* * *
6. At issue in this case is the factual error the
Respondent made by classifying the Petitioner as a
resident of the U.S., and that the petitioner is
engaged in excise taxable activity. Since the
Petitioner was/is a non resident alien and not engaged
in any excise taxable activity he disputes [the
deficiencies, additions to tax, and interest].
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This case was scheduled for hearing on respondent's motion
for December 11, 1995, in Los Angeles, California. Petitioner
failed to appear for that hearing. The Court did receive a copy
of a document purporting to be a "(2nd) SECOND CODICIL" wherein
petitioner purportedly attempted to revoke "all signatures that
appear on every Federal 1040 Form (Codicil) including, but not
limited to, the 'original' 1040 Form and all subsequent 1040
Forms that bear the SS No. XXX-XX-XXXX for all years inclusive."
That document has not been filed, nor if filed would it have any
bearing on this case.
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 that 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
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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 indicated by the passages
of the petition and Objection 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). No facts
supporting a "nonresident alien" finding have been alleged.
Further, petitioner did not appear at the call of this case for
hearing on respondent's motion, but purported to revoke his
signature on all previously filed Forms 1040. We see no need to
catalog petitioner's contentions and painstakingly address them.
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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). 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).
We turn now to respondent's request for the 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 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 deficiency
in income tax or the additions to tax determined by respondent in
the notice of deficiency. Rather, the record demonstrates that
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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 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, cases of taxpayers with genuine
controversies were delayed. In view of the foregoing, we shall
exercise our discretion under section 6673(a)(1) and require
petitioner to pay a penalty to the United States in the amount of
$5,000. 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). To reflect the foregoing,
An order of dismissal
and decision will be entered.