T.C. Memo. 1996-102
UNITED STATES TAX COURT
ARLIE G. CURRY, JR., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 6404-94. Filed March 6, 1996.
Arlie G. Curry, Jr., pro se.
Elizabeth Downes, for respondent.
MEMORANDUM OPINION
DAWSON, Judge: This case was assigned to Special Trial
Judge John J. Pajak pursuant to section 7443A(b)(4) of the Code
and Rules 180, 181, and 183. Unless otherwise indicated, all
section numbers refer to the Internal Revenue Code for the
taxable year in issue, and all Rule numbers refer to the Tax
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Court Rules of Practice and Procedure. The Court agrees with and
adopts the Special Trial Judge's opinion, which is set forth
below.
OPINION OF THE SPECIAL TRIAL JUDGE
PAJAK, 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 determined deficiencies in, and additions to,
petitioner's Federal income taxes as follows:
Additions to Tax Under Section
Year Deficiency 6651(a)(1)
1990 $11,039 $401
1991 14,664 2,547
The deficiency for the year 1990 was based on respondent's
determination that petitioner failed to report wage income of
$21,004 and interest income of $1,598, and on respondent's
disallowance of a partnership loss in the amount of $19,626. The
deficiency for the year 1991 was based on respondent's
determination that petitioner failed to report wage income of
$63,406. The additions to tax under section 6651(a)(1) were
based on respondent's determination that petitioner's failure to
file timely income tax returns for the years 1990 and 1991 was
not due to reasonable cause.
Petitioner resided in Tulsa, Oklahoma, when his petition was
filed.
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For clarity and convenience, our findings of fact and
opinion have been combined.
After receiving the statutory notice of deficiency in this
case, petitioner sent a letter to the Court requesting
information. This letter was filed as a petition. The Court
ordered petitioner to file an amended petition, and he did so.
In his amended petition, petitioner stated that he "disagrees
with the tax deficiencies for the years 1990 and 1991 as set
forth in the alleged NOTICE OF DEFICIENCY dated January 27, 1994,
a copy of which is attached and identified as EXHIBIT A."
Petitioner went on to state:
4. Petitioner denies all deficiencies and all
addition [sic] to the alleged tax:
a. The alleged Notice of Deficiency issued is
not a true and/or proper Notice of
Deficiency.
b. There are no math errors.
c. I have no liability for a non-master file
tax.
d. I am not a non-resident alien, foreign
corporation, foreign partnership, or foreign
estate or trust.
Respondent subsequently filed a Motion To Dismiss For
Failure To State A Claim Upon Which Relief Can Be Granted
pursuant to Rule 40. Thereafter, the Court issued an order
calendaring respondent's motion for hearing, and also directing
petitioner to file a proper second amended petition before the
hearing. Specifically, the Court directed petitioner to file a
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second 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.
Petitioner timely filed his second amended petition with the
Court. In addition to allegations virtually identical to those
in his amended petition, petitioner added the following in his
second amended petition:
5. The facts upon which the petitioner relies, as the
basis of petitioner's case, are as follows:
a. The alleged Notice of Deficiency is not a
true and/or proper Notice of Deficiency.
Agency entries made in the administration of
petitioner's tax account are to be posted to
the Internal Revenue system of records
Treasury/IRS 24.030, Individual Master File,
with transaction code 494.
b. No transaction code 494, indicating that a
true and/or property Notice of Deficiency has
be [sic] sent to the petitioner, has been
posted to the petitioner's Individual Master
File.
c. The petitioner requested an administrative
hearing with an Internal Revenue Appeals
Officer in accordance with the Commissioner's
instructions published in the Internal
Revenue Manual.
d. The Internal Revenue Manual was promulgated
in accordance with 26 U.S.C. 7801, 7802, and
7805[.]
e. The petitioner was charged with an excise tax
violation, a non-master file tax, as
indicated on his non-master file transcript.
The petitioner is not involved in any
activities resulting in excise tax
liabilities.
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At the hearing on respondent's motion, petitioner made an
oral motion to continue, which was denied as untimely under Rule
134. Petitioner presented no other argument.
If the Commissioner determines a deficiency in income tax,
the Commissioner is authorized to send a notice of deficiency by
certified or registered mail to the taxpayer. Secs. 6211 and
6212; secs. 301.6211-1 and 301.6212-1, Proced. & Admin. Regs. A
taxpayer has 90 days (150 days if addressed to a person outside
the United States) from the mailing of a notice of deficiency
within which to file a petition with the Tax Court challenging
the determined tax liability. Sec. 6213; sec. 301.6213-1,
Proced. & Admin. Regs. This is the route petitioner chose to
follow.
We find that the notice of deficiency in this case complies
with the applicable statutes and reject petitioner's contentions
as to its validity.
Section 61 provides that gross income means "all income from
whatever source derived," including (but not limited to)
"Compensation for services", "Gains derived from dealings in
property", "Interest", "Dividends", and "Pensions". Petitioner's
contention that he is not subject to taxation and therefore not
liable for income taxes is without merit. The short answer to
petitioner's assertions is that he is not exempt from Federal
income tax. Abrams v. Commissioner, 82 T.C. 403, 406-407 (1984).
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In his amended petition and in his second amended petition,
petitioner makes tax protester arguments that have been
repeatedly rejected by this Court and others as inapplicable or
without merit. See, e.g., Wilcox v. Commissioner, 848 F.2d 1007
(9th Cir. 1988), affg. T.C. Memo. 1987-225; Rowlee v.
Commissioner, 80 T.C. 1111 (1983); McCoy v. Commissioner, 76 T.C.
1027 (1981), affd. 696 F.2d 1234 (9th Cir. 1983). We see no need
to repeat these discussions here.
Rule 34(b)(4) and (5) provides in pertinent part that the
petition in a deficiency action shall contain "Clear and concise
assignments of each and every error which the petitioner alleges
to have been committed by the Commissioner in the determination
of the deficiency or liability", and "Clear and concise lettered
statements of the facts on which petitioner bases the assignments
of error."
We agree with respondent that petitioner's petition does not
allege any justiciable error with respect to respondent's
determinations in the notice of deficiency and alleges no
justiciable facts in support of any error as required by Rule
34(b)(4) and (5). Accordingly, respondent's motion to dismiss
will be granted, and decision will be entered for respondent.
Next, on the Court's own motion, we impose a penalty under
section 6673. Section 6673(a)(1) provides in pertinent part that
whenever it appears to the Tax Court that proceedings before it
have been instituted or maintained by the taxpayer primarily for
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delay, or the taxpayer's position in such proceeding is frivolous
or groundless, the Court may require the taxpayer to pay to the
United States a penalty not in excess of $25,000.
We hold that petitioner has instituted and maintained this
action primarily for delay and that petitioner's position in this
proceeding is frivolous and groundless. Accordingly, in our
decision we will require petitioner to pay to the United States a
penalty of $2,500.
An appropriate order and
decision will be entered.