Talmage v. Commissioner

T.C. Memo. 1996-114

UNITED STATES TAX COURT

STEPHEN V. TALMAGE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 339-95. Filed March 11, 1996.

Stephen V. Talmage, pro se.

Amy A. Campbell, for respondent.

MEMORANDUM OPINION

BEGHE, Judge: Respondent determined the following

deficiency in and additions to petitioner's 1991 Federal income

tax:

Additions to Tax

Deficiency Sec. 6651(a) Sec. 6654(a)
$17,391 $3,439 $96
 -2-

Except where otherwise indicated, all section references are

to the Internal Revenue Code in effect for the year in issue, and

all Rule references are to the Tax Court Rules of Practice and

Procedure.

Background

This case is before the Court on various outstanding

motions. The issues for decision are: (1) Whether to grant

respondent's motion to dismiss for lack of prosecution; (2)

whether to grant petitioner's motion for summary judgment; and

(3) whether to grant respondent's motion for a section 6673

penalty.

When petitioner Stephen V. Talmage filed his petition in

this case, he resided in Piedmont, South Carolina.

Petitioner, an employee of United Parcel Service, Inc.

(UPS), filed no Federal income tax return for 1991. On the basis

of statements sent to respondent by the payors, respondent, in

her notice of deficiency, dated October 7, 1994, attributed to

petitioner wages of $41,520 from UPS, nonemployee compensation of

$24,801 from Matol Botanical International, Montreal, Canada, and

dividend income of $60 from the Common Sense Growth Fund.

In his petition, filed January 5, 1995, petitioner asserted

various tax protester arguments (e.g., that he was not subject to

the jurisdiction of the Internal Revenue Service; that he was not

a taxpayer or person as defined in the Code; and that tax forms

issued by Internal Revenue Service failed to display OMB numbers
 -3-

or to comply with the Privacy Act). Petitioner also claimed that

he was entitled to deductions for business expenses and itemized

deductions sufficient to eliminate or greatly reduce any tax

liability, but did not allege any facts to support these claims.

Respondent's, answer, filed February 6, 1995, denied all of

petitioner's assignments of error and supporting allegations.

On June 1, 1995, we set the case for trial on November 6,

1995, at a regular trial session of this Court to be held at

Columbia, South Carolina, and sent petitioner a copy of our

standing pretrial order, containing the usual instructions to the

parties: To begin discussions as soon as practicable, to

negotiate in good faith, to settle minor issues, to stipulate

facts to the maximum extent possible, to prepare and file trial

memoranda, to identify witnesses in advance, and to prepare for

trial, and warning the parties that any unexcused failure to

comply with the order adversely affecting the timing or conduct

of the trial could cause this Court to impose sanctions,

including dismissal of the case.

On August 18, 1995, petitioner filed a "Motion for Dismissal

of Case", alleging that he had filed the petition based on a

misunderstanding of his legal status, and purporting to cancel

his signatures on the petition and attachments to the petition.

On September 6, 1995, we issued an order denying

petitioner's Motion for Dismissal of Case. We explained that

Bradley v. Commissioner, T.C. Memo. 1985-364, and Estate of Ming
 -4-

v. Commissioner, 62 T.C. 519, 521 (1974) (citing Dorl v.

Commissioner, 57 T.C. 720, 721-722 (1972)), establish that a

taxpayer may not unilaterally oust the Tax Court from

jurisdiction which, once invoked, remains unimpaired until the

Court decides the case. We warned petitioner that section 6673

authorizes the Court to impose a penalty for groundless and

frivolous filings by taxpayers. Our order urged petitioner to

confer with respondent's counsel and submit to her documentary

evidence to substantiate his assertions about business expenses

and itemized deductions.

On September 18, 1995, respondent filed a Motion To Show

Cause Why Proposed Facts In Evidence Should Not Be Accepted As

Established. Because petitioner had failed to confer with

respondent about entering into a stipulation of facts in

accordance with Rule 91, respondent moved that a proposed

stipulation of facts that respondent had prepared should be

accepted as established. Respondent's proposed stipulation set

forth each of the individual items of income that respondent

attributed to petitioner; attached thereto was a descriptive list

of the sources and locations of the evidence supporting the facts

in the proposed stipulation, making it clear that the critical

assertions about the items of income were derived from

information returns received by respondent from payors. The

proposed stipulation also stated that petitioner is liable for

self-employment tax and is entitled to the filing status of
 -5-

married filing separately, to a personal exemption, and to the

self-employment tax deduction.

On September 19, 1995, we issued an order directing

petitioner to file a response showing why the facts and evidence

set forth in respondent's proposed stipulation of facts should

not be accepted as established for the purposes of the case.

On October 3, 1995, petitioner sent respondent Petitioner's

Request for Admissions, which demanded answers to 21 questions of

a general legal nature without any reference to the particular

circumstances of this case.

Petitioner's Objection To Motion To Show Cause Why Proposed

Facts In Evidence Should Not Be Accepted As Established was filed

on October 12, 1995. It contained a potted history of early

income tax cases, culminating with some references to

petitioner's efforts to file a return under section 83 that would

obviate any taxable gain from his services, all of which

purportedly led petitioner to conclude that his receipts were not

income and that this Court had no jurisdiction over the case. It

also contained various complaints about the procedures that

respondent had followed in this case.

On October 13, 1995, this Court filed respondent's Motion

For Protective Order, which asked this Court to enter an order

that respondent need not answer petitioner's request for

admissions because it had been made shortly before trial, without

the informal consultation required by Branerton Corp. v.

Commissioner, 61 T.C. 691 (1974). Attached to respondent's
 -6-

motion were copies of respondent's July 20 and July 26, 1995,

letters, in which respondent had attempted to schedule meetings

with petitioner to prepare the case for trial and which had been

accompanied by a proposed stipulation of facts, an informal

request for information, a copy of Rule 91 of the Court's Rules

(concerning stipulations for trial), a copy of Publication 947,

and two copies of Form 2848. Petitioner returned these letters

to respondent stamped as follows:

REFUSED FOR CAUSE
WITHOUT DISHONOR
U.C.C. 3-501
DATE

Also on October 13, 1995, we issued another order in which

we noted that petitioner's objection and request for admissions

had continued the tax protester course that we had warned him

against. We rejected petitioner's tax protester arguments and

referred him to the recently issued opinion in Santangelo v.

Commissioner, T.C. Memo. 1995-468, which had rejected the

identical section 83 argument made by the taxpayer in that case.

We made absolute our order to show cause and thereby accepted as

established for the purposes of this case the facts set forth in

respondent's proposed stipulation of facts. We once more urged

petitioner to provide respondent's counsel with the documentation

supporting his asserted business expenses and itemized deductions

and to settle the case by agreement.

Our order of October 13, 1995, also instructed the Clerk of

the Court to return petitioner's request for admissions unfiled
 -7-

and stated that respondent need not respond to the request. We

warned petitioner that, in view of his already having wasted the

time of this Court and of respondent, he had put himself in

danger of a penalty being imposed on him under section 6673, and

referred to our previous warning about sanctions. We also stated

that petitioner's time-wasting and dilatory tactics put him

dangerously close to being in violation of the 15-day rule stated

in the standing pretrial order. We pointed out that, under that

rule, petitioner only had until October 21, 1995, the

unrestricted right to present to respondent the documentary

evidence to substantiate his asserted business expenses and

itemized deductions.

On October 25, 1995, petitioner filed a Motion For

Continuance asking for a delay of 60 days "to get proper

counsel", in view of the fact that the petition which the Court

viewed as frivolous had been filed by him in the first place

"based on faulty advice".

On October 27, 1995, we issued an order denying petitioner's

Motion for Continuance. We prefaced that order by reminding

petitioner that the notice setting the case for trial states in

block capitals that failure to appear at the calendar call or to

cooperate in the pretrial stipulation process may "RESULT IN

DISMISSAL OF THE CASE AND ENTRY OF DECISION AGAINST YOU". We

repeated our warnings about a section 6673 penalty and

petitioner's obligation to meet with respondent's counsel to
 -8-

present documentary evidence to substantiate his alleged

deductions.

On November 6, 1995, at the calendar call of the Court's

Columbia, South Carolina, trial session, respondent filed two

motions, a Motion To Dismiss For Lack Of Prosecution and a Motion

For Sanctions Under I.R.C. Section 6673(a).

Petitioner appeared pro se at the calendar call and

proffered a "Statement of Legal Claims", setting forth the

arguments we discuss infra. Petitioner refused to support his

claims about business expenses and itemized deductions. He said

that he was exclusively interested in pursuing his legal

arguments about section 83 on appeal. In response to our

question whether he had any documentation to support his

deductions, petitioner stated in open court: "I will concede all

of the facts of the case today if they can show me how to comply

with section 83". We told him that we would file his "Statement

of Legal Claims" as a motion for summary judgment.

On November 17, 1995, this Court filed what petitioner

described in his covering letter as a "graduated package" of four

motions, consisting of (1) Petitioner's Motion to Strike

Respondent's Motion for Sanctions, (2) Petitioner's Motion to

Deny Respondent's Request for Sanctions, (3) Petitioner's Motion

to Strike Respondent's Motion to Dismiss for Lack of Prosecution,

and (4) Petitioner's Motion to Deny Respondent's Motion to

Dismiss for Lack of Prosecution.
 -9-

On November 22, 1995, we issued an order denying

petitioner's motions (1) and (3), to strike respondent's motion

for sanctions and to strike respondent's motion to dismiss for

lack of prosecution. These motions of petitioner were clearly

frivolous and groundless, being based upon respondent's having

given petitioner copies of the motions bearing stamped

signatures, although respondent had filed signed originals with

the Court, in compliance with Rule 23(a)(3).

On December 26, 1995, this Court filed Respondent's Response

to Petitioner's Motion to Deny Respondent's Motion to Dismiss for

Lack of Prosecution, Motion for Summary Judgment, and Motion to

Deny Respondent's Request for Sanctions.

There thus remain for disposition the following matters: (1)

respondent's motion to dismiss for failure to prosecute and

petitioner's deemed motion for summary judgment, and (2)

respondent's motion for a penalty under section 6673.

Discussion

Issue 1. Dismissal v. Summary Judgment

This Court, like every court, has the inherent power, in the

exercise of its discretion, to dismiss a case for want of

prosecution. Link v. Wabash Railroad Co., 370 U.S. 626, 629-632

(1962) (failure of counsel with history of dilatory conduct of

case to appear at pretrial conference); Steyr-Daimler-Puch of

America Corp. v. Pappas, 852 F.2d 132, 134 (4th Cir. 1988)

(failure to obey numerous court orders); Ducommun v.

Commissioner, 732 F.2d 752, 754 (10th Cir. 1983), affg. Orders of
 -10-

this Court (failure to comply with subpoena duces tecum or to

settle or enter into meaningful stipulation of facts); Harper v.

Commissioner, 99 T.C. 533, 540 (1992) (failure to comply with

discovery requests and orders or to prepare for trial); Levy v.

Commissioner, 87 T.C. 794, 803 (1986) (failure to stipulate facts

or to prepare for trial).

The legal standard for involuntary dismissals under Federal

Rule of Civil Procedure 41(b) governs dismissals in the Tax Court

under our Rule 123(b). Hillig v. Commissioner, 916 F.2d 171, 173

(4th Cir. 1990), vacating and remanding on this ground T.C. Memo.

1989-476; Freedson v. Commissioner, 565 F.2d 954, 954-955 (5th

Cir. 1978), affg. 67 T.C. 931 (1977) and 65 T.C. 333 (1975);

Harper v. Commissioner, supra at 540; Explanatory Note to Rule

123(b), 60 T.C. 1129-1130.

We have dismissed, for failure properly to prosecute, the

cases of taxpayers who made tax protester1 arguments that we

found frivolous. McCoy v. Commissioner, 76 T.C. 1027, 1030

(1981), affd. 696 F.2d 1234 (9th Cir. 1983) (tax protester

arguments, but also failure to respond to interrogatories and to

produce requested documents). Cf. May v. Commissioner, 752 F.2d

1301, 1303-1304 (8th Cir. 1985), affg. an Order of this Court

(tax protester arguments, including denial that wages are income;

dismissal for failure to state a claim). However, in Mathes v.

1
Petitioner, like the taxpayer in Santangelo v.
Commissioner, T.C. Memo. 1995-468, denies that he is a tax
protester.
 -11-

Commissioner, 788 F.2d 33, 35 (D.C. Cir. 1986), affg. on other

grounds an Order of this Court, Justice (then Judge) Scalia

expressed the view that the mere weakness of a party's arguments

can never by itself justify dismissal for failure to prosecute--

"The substantive merits of a claim are of course irrelevant to

the propriety of a dismissal for failure to prosecute"--and

affirmed our order to dismiss for failure to prosecute not

because the taxpayer's arguments were frivolous but because he

had disobeyed orders and failed to appear at trial.

The Court of Appeals for the Fourth Circuit, to which appeal

in this case would lie, requires the trial court to consider four

factors before dismissing a case for failure to prosecute: (1)

The plaintiff's degree of personal responsibility; (2) the amount

of prejudice caused the opposing party; (3) the presence of a

drawn out history of deliberately proceeding in a dilatory

fashion; and (4) the effectiveness of sanctions less drastic than

dismissal. Hillig v. Commissioner, 916 F.2d at 174. We have

said that we will not dismiss a case if a lesser sanction is

available and appropriate. Freedson v. Commissioner, 67 T.C. at

937.

Some of the factors in the Fourth Circuit test militate in

favor of dismissing this case. Petitioner is personally

responsible for a series of actions that have dragged out and

delayed the case substantially. Had petitioner not asserted in

his petition that he was entitled to deduct business expenses and

miscellaneous itemized deductions that he could substantiate, we
 -12-

would long ago have granted a motion by respondent to dismiss the

case for failure to state a claim. However, petitioner's

continued refusal to bring forward any evidence to support those

deductions, culminating in his statement at the calendar call

that he was conceding them in the interests of pressing his

section 83 claim on appeal, leads us to conclude that they were

either totally unfounded or asserted merely for purposes of

delay. As a result, respondent has been put to considerable

trouble and expense. In addition, petitioner has repeatedly

acted in derogation of the pretrial standing order and other

orders of this Court. All of this would lead us to conclude that

petitioner should be sanctioned. However, upon consideration of

the fourth factor (the sufficiency of lesser sanctions) the

preference expressed by the Court of Appeals for the Fourth

Circuit in Hillig v. Commissioner, 916 F.2d at 174-175, for

monetary sanctions rather than dismissal leads us to choose a

monetary sanction, for which respondent has also moved, rather

than dismissal. We discuss the monetary sanction infra.

At the pretrial calendar call, we stated that we would treat

petitioner's Statement of Legal Claims as a motion for summary

judgment. In addition, by our order of October 13, 1995, the

facts set forth in respondent's proposed stipulation of facts

were deemed established for purposes of this case pursuant to

Rule 91(f). Inasmuch as petitioner wishes to press his "legal"

arguments, as opposed to the assignments of factual error
 -13-

originally included in his petition, and has produced no evidence

in support of those assignments, we regard him as having conceded

the factual issues and to be confining himself to his arguments.

Consequently, we will treat respondent's motion to dismiss as one

for summary judgment, and resolve this case through summary

judgment. Fitzpatrick v. Commissioner, T.C. Memo. 1995-548;

Duverseau v. Commissioner, T.C. Memo. 1993-569.22

Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials. Florida Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be

granted with respect to all or any part of the legal issues in

controversy "if the pleadings, answers to interrogatories,

depositions, admissions, and any other acceptable materials,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that a decision may be

rendered as a matter of law." Rule 121(b); Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 247 (1986); Sundstrand Corp. v.

Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th

Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988);

Naftel v. Commissioner, 85 T.C. 527, 529 (1985).

2
The fact that matters outside the pleadings help us to
reach the result, even though they are not absolutely necessary,
also induces us to resolve this case through summary judgment.
Consequently, summary judgment is a more appropriate disposition
than dismissal. Behrens v. Pelletier, 516 U.S. , , 1996 WL
71218 (Feb. 20, 1996); Travel All Over the World, Inc. v. Saudi
Arabia, 73 F.3d 1423, 1430 (7th Cir. 1996).
 -14-

Because the issues are purely legal, this case is ripe for

summary judgment. Tax protester arguments like the claim that

wages are not taxable income also suffice (as an alternative to

dismissal, and in the absence of better argument) to justify

summary judgment for respondent. Coleman v. Commissioner, 791

F.2d 68 (7th Cir. 1986) (wages not income), affg. an Order of

this Court; Beard v. Commissioner, 82 T.C. 766, 772-774 (1984)

(wages not income), affd. per curiam 793 F.2d 139 (6th Cir.

1986); Cornell v. Commissioner, T.C. Memo. 1983-370 (wages not

income). Even if wages are, in effect, an exchange of equal

value for value, they are nevertheless taxable income. Rowlee v.

Commissioner, 80 T.C. 1111, 1121-1122 (1983); Rice v.

Commissioner, T.C. Memo. 1982-129. And even if we apply section

1001 to determine petitioner's gain, his basis is defined under

sections 1011 and 1012 as his cost, not fair market value. Since

he paid nothing for his labor, his cost and thus his basis are

zero. Rice v. Commissioner, supra. Consequently, even under

section 1001, his taxable income from his labor is his total gain

reduced by nothing, i.e., his wages.
 -15-

Petitioner's primary argument3 is that section 83, Property

Transferred in Connection with Performance of Services, has the

effect of exempting his wages from income tax because it requires

us to apply section 1012, which specifies that cost should be

used to determine the basis of property (unless the Code provides

otherwise) to determine the extent to which wages constitute

taxable income. Petitioner asserts that he "paid" for his wages

with his labor and that section 83 allows the value of his labor

as a cost to be offset against his wages, thereby exempting them

from tax. Section 83 provides that property received for

services is taxable to the recipient of the property to the

3
Petitioner advances some other frivolous arguments. He
claims that sec. 3121(e) ("An individual who is a citizen of the
Commonwealth of Puerto Rico (but not otherwise a citizen of the
United States) shall be considered, for purposes of this section,
as a citizen of the United States") implies that he is not a
citizen of the United States for the purposes of the income tax.
Obviously, that subsection includes citizens of Puerto Rico among
people considered citizens of the United States for the purposes
of sec. 3121, which has to do with the FICA tax, but it does not
exclude other citizens of the United States from that class. In
any case, the words "for purposes of this section" (which
petitioner significantly omits) mean that the provision has no
effect on the income tax, which is what is at issue in the case
at hand. Attempting to reach the same result, he similarly
misuses secs. 1402(b) and 7655. Petitioner also claims that sec.
6201, Assessment Authority, limits respondent's authority to
assess taxes to taxes paid by stamp. Sec. 6201 does grant
respondent assessment authority, and other authority, with
respect to taxes payable by stamp, but it also grants such
authority with respect to all taxes as to which returns or lists
are made under the Code, and this clearly includes the income
tax.

Significantly, these same subsidiary arguments, as well as
petitioner's main argument, were made in precisely the same
words, and rejected by us, in Santangelo v. Commissioner, T.C.
Memo. 1995-468.
 -16-

extent of its fair market value minus the amount (if any) paid

for the property. In attempting to equate his wages with

property for which he has a tax cost, petitioner's argument is

nothing more than a variation of the wages-are-not-income claim

frequently advanced by tax protesters, and it is completely

without merit. Gammon v. Commissioner, T.C. Memo. 1996-4;

Santangelo v. Commissioner, T.C. Memo. 1995-468. Cf. Crow v.

Commissioner, T.C. Memo. 1995-584. Petitioner's argument fails

for the same reason that other protesters' arguments fail; the

worker's cost for his services--and thus his basis--is zero, not

their fair market value.

We will therefore deny petitioner's motion for summary

judgment and grant summary judgment to respondent.

Issue 2. Section 6673 Penalty

Respondent has also moved that we impose a penalty against

petitioner under section 6673(a) of $25,000 or such other amount

as we deem appropriate because petitioner's positions are

frivolous and groundless and he instituted and maintained this

proceeding primarily for delay.

We have imposed section 6673 penalties on taxpayers who have

made frivolous tax protester arguments. Coleman v. Commissioner,

791 F.2d 68, 72 (7th Cir. 1986) (wages not income), affg. an

Order of this Court; Granzow v. Commissioner, 739 F.2d 265,

267-268 (7th Cir. 1984) (wages not income), affg. per curiam 3

decisions, (i) an Order of this Court, (ii) Basic Bible Church v.
 -17-

Commissioner, 74 T.C. 846 (1980), and (iii) Kile v. Commissioner,

an Order of this Court; Greenberg v. Commissioner, 73 T.C. 806,

813-816 (1980) (tax protester arguments); Wilkinson v.

Commissioner, 71 T.C. 633, 639-643 (1979) (tax protester

arguments); Cornell v. Commissioner, T.C. Memo. 1983-370 (wages

not income).

Petitioner denies being a tax protester and claims to be

seeking answers to his questions in good faith. Whether or not

his primary motivation is protest--as we suspect it is--his

section 83 arguments are too close to the conventional

protester's wages-are-not-income arguments not to be frivolous.

Indeed, we have already held such section 83 arguments to be

frivolous, thus justifying imposition of a section 6673 penalty.

Santangelo v. Commissioner, supra.

The inquiry in deciding whether a party's position is

frivolous is objective. If a person knew or should have known

that his position is without merit, a court may and should impose

sanctions. Coleman v. Commissioner, 791 F.2d at 71-72; May v.

Commissioner, 752 F.2d at 1307. Parties who sign pleadings

certify that they are well grounded in fact and warranted by

existing law or a good faith argument for the extension,

modification, or reversal of existing law. Rule 33(b). A

petition to the Tax Court is frivolous if it is contrary to

established law and unsupported by a reasoned, colorable argument
 -18-

for change in the law. Coleman v. Commissioner, 791 F.2d at 71.4

Under this standard, petitioner's section 83 argument is

frivolous, and independently justifies imposition of a section

6673 penalty on that ground.

Because, as we have said, we suspect that petitioner's

primary motivation is protest, we cannot consistently say that he

instituted or maintained this proceeding primarily for delay.

Respondent claims that petitioner's primary purpose was delay;

petitioner's conduct has certainly caused a great deal of delay

in the case, preventing earlier dismissal for failure to state a

claim and thereby wasting the time both of this Court and of

respondent. But that is not to say that his primary purpose was

delay. Indeed, we believe that, while it was one of his

purposes, it was not primary. Section 6673(a)(1)(A) therefore

does not justify imposing a penalty on him. Because, however,

petitioner's position in this proceeding is frivolous or

groundless, section 6673(a)(1)(B) justifies imposing a penalty on

him.

Petitioner cannot claim that a penalty is unexpected. We

repeatedly warned him that he ran the risk of incurring a penalty

4
Under Fed. R. Civ. P. 11, the rule for determining whether
a complaint is frivolous has been stated to be whether it has
absolutely no chance of success under existing precedents.
Brubaker v. City of Richmond, 943 F.2d 1363, 1373, 1377, 1378,
1385 (4th Cir. 1991); Cleveland Demolition Co. v. Azcon Scrap
Corp., 827 F.2d 984, 988 (4th Cir. 1987). Cf. Morley v. Ciba-
Geigy Corp., 66 F.3d 21, 25 (2d Cir. 1995); Caisse Nationale de
Credit Agricole-CNCA, New York Branch v. Valcorp, Inc., 28 F.3d
259, 264 (2d Cir. 1994).
 -19-

if he persisted with his frivolous arguments. Irrespective of

whether his conduct was in bad faith, it was certainly willful.

Thus, the section 6673 penalty is fully justified. May v.

Commissioner, supra at 1308-1309. We therefore grant

respondent's motion for a penalty.

Respondent states that she has spent 38 hours of attorney

time and 38 hours of the time of other employees on the case at

hand. She has also pointed out that petitioner's arguments in

this case are virtually identical to those in Santangelo v.

Commissioner, supra, in which we dismissed the case for failure

to state a claim and imposed a penalty of $2,500. We repeatedly

brought Santangelo to petitioner's attention, and the deficiency

and additions in this case are more than twice the amount of the

deficiencies and additions in Santangelo.

The section 6673(a) penalty exists to deter actions that

result in repeated failures to follow the rules to which all who

litigate before us must conform. As Judge Easterbrook said in

Coleman v. Commissioner, 791 F.2d at 72:

People who wish to express displeasure with taxes must
choose other forums, and there are many available.
Taxes are onerous, no doubt, and the size of the tax
burden gives people reason to hope that they can escape
payment. Self-interest calls forth obtuseness. An
obtuse belief--even if sincerely held--is no refuge, no
warrant for imposing delay on the legal system and
costs on one's adversaries. The more costly obtuseness
becomes, the less there will be.

If the penalty is to have any likelihood of proper deterrent

effect on this petitioner and others who might be inclined to
 -20-

pursue a similar course, repeated bites of the apple should

become more expensive.5 Cf. Harper v. Commissioner, 99 T.C. at

553. In view of the foregoing, we impose a section 6673 penalty

of $6,500.

Petitioner stated at the calendar call that he wished to

appeal our decision against him, which he obviously expected. We

conclude by informing petitioner, as we have informed other

taxpayers taking frivolous positions, Abrams v. Commissioner, 82

T.C. 403, 410-412 (1984); DiCarlo v. Commissioner, T.C. Memo.

1992-280, that the Courts of Appeals have their own sanctioning

powers to deal with frivolous appeals. Sec. 7482(c)(4); 28

5
Our numerous warnings to petitioner have gone unheeded. On
Feb. 8, 1996, the Court filed petitioner's Motion for a More
Definite Statement, notwithstanding that it was not accompanied
by proof of service on respondent. The motion states:

The Respondent has motioned for penalties but will
not tell Petitioner how to comply with Section 83.
Therefore the Petitioner would ask the court to explain
the operation of Section 83 and how Petitioner can
comply with it in the future.

We will deny petitioner's motion, along with his other
outstanding motions, without requesting any response from
respondent. Under Rule 51, a motion for more definite statement
is appropriate only with respect to a vague or ambiguous pleading
as to which a responsive pleading is permitted or required. No
useful purpose would be served--it would be a waste of
respondent's time--to ask her to consider and respond to
petitioner's motion. As shown by our discussion of Issue 1,
supra, petitioner is mistaken in assuming that compliance with
sec. 83 would provide a means for excluding from gross income the
compensation that he received for his services. Sec. 83, by its
terms, implements the broad statutory mandate of sec. 61(a)(1)--
to include in gross income all compensation for services--by
providing a specific regime for determining the timing and amount
of compensation income received in the form of property subject
to restrictions.
 -21-

U.S.C. sec. 1912 (1988); Fed. R. App. P. 38. The Court of

Appeals for the Fourth Circuit, to which this case is appealable,

has not hesitated in appropriate cases to use its power to order

sanctions under these provisions. Bast v. Cohen, Dunn &

Sinclair, PC, 59 F.3d 492, 496 (4th Cir. 1995) (complete absence

of properly pleaded civil RICO claim); In re Lane, 991 F.2d 105,

108 (4th Cir. 1993) (continued litigation of previously decided

issues); Sterner v. Commissioner, 867 F.2d 609, 1989 WL 5432 (4th

Cir. 1989), affg. without published opinion an Order of this

Court (tax protester arguments: Fifth Amendment right not to file

income tax return, right to jury trial, constitutional right to

litigate), with nine unpublished cases cited therein, including

Dixon v. Commissioner, 836 F.2d 546, 1996 WL 30232 (4th Cir.

1987), affg. without published opinion T.C. Memo. 1986-563 (tax

protester arguments: jury trial, constitutional right to

litigate); Dalton v. United States, 800 F.2d 1316, 1320 (4th Cir.

1986) (tax protester against Defense Department); see also

Coleman v. Commissioner, 791 F.2d at 72-73; Mathes v.

Commissioner, 788 F.2d at 34-36.

An appropriate order and

decision will be entered for

respondent.