Johnson-Straub v. Commissioner

T.C. Memo. 1996-198

UNITED STATES TAX COURT

RUTH R. JOHNSON-STRAUB, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 26116-95. Filed April 23, 1996.

Ruth R. Johnson-Straub, pro se.

Jordan S. Musen, Terry W. Vincent, and Richard S. Bloom, 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, as supplemented, filed

pursuant to Rule 40.

Petitioner resided in Cleveland, Ohio, at the time that the

petition was filed with the Court.

Respondent's Notice of Deficiency

Respondent issued to petitioner a notice of deficiency dated

September 13, 1995, in respect of the taxable year 1993, and a

notice of deficiency dated November 8, 1995, in respect of the

taxable year 1992. In said notices, respondent determined the

following deficiencies in petitioner's Federal income taxes and

additions to tax:

Additions to tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654(a)

1992 $4,904 $182.50 ---
1993 7,775 875.00 $126.71

The deficiencies in income taxes are based on respondent's

determination that petitioner failed to report income as reflected in

the following schedules:

Practice and Procedure.
 - 3 -

1992
Income Payor Amount

Wages1 University Hospitals
of Cleveland, Ohio $33,356
1
Respondent has given petitioner credit for amounts withheld
from petitioner's taxes insofar as petitioner's ultimate tax
liability is concerned. However, the determination of a
statutory deficiency does not take such amounts into account.
See sec. 6211(b)(1).

1993
Income Payor Amount

Wages1 University Hospitals
of Cleveland, Ohio $34,705

Self-employment
income2 A.F. Feo, PhD & Assoc. 6,547
1
See supra note 1.
2
The deficiency in income tax for 1993 includes self-
employment tax pursuant to sec. 1401.

The additions to tax under section 6651(a)(1) are based on

respondent's determination that petitioner's failure to timely

file income tax returns for the taxable years in issue was not

due to reasonable cause. Finally, the addition to tax under

section 6654(a) is based on respondent's determination that

petitioner failed to pay the required amount of estimated taxes

for 1993.

Petitioner's Petition

Petitioner filed her petition, a 23-page typewritten

document, on December 15, 1995. The crux of petitioner's

position appears to be that respondent acted illegally, and in
 - 4 -

contravention of her constitutional rights, by determining

deficiencies in her income taxes for the taxable years in issue.

Thus, the petition includes the following allegations:

7. That Respondent did further, in violation of law,
and Petitioner's Constitutional right to Due Process of
Law, tell Petitioner to Petition tax court for a
redetermination of the alleged deficiency.

8. That Respondent did further, in violation of law
and Petitioner's constitutional right to Due Process of
Law, cause the [notices of deficiency] to be placed in
the United States Mail, thereby utilizing the United
States Postal Service in the attempt to extort monies
not lawfully due and owing according to the
Respondent's decision.

9. That Respondent did, in violation of law and
petitioner's constitutional Right to Due Process of
Law, attempt to obtain an unjust legal advantage over
Petitioner, should Petitioner have failed to seek
remedy in the tax court, by having affixed the Notice
of Deficiency Waiver (Form 5564) to the alleged Notice
of Deficiency, whereupon Respondent obtains a default,
allowing Respondent to proceed without any regard to
the rights of Petitioner.

Respondent's Rule 40 Motion and Subsequent Developments

As indicated, respondent filed a Motion To Dismiss For

Failure To State A Claim.2 On January 31, 1996, shortly after

respondent filed her motion to dismiss, the Court issued and

served 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

2
Respondent subsequently supplemented her motion to dismiss
in order to clarify the determinations made in the notices of
deficiency.
 - 5 -

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 as

directed.

Respondent's motion to dismiss was called for hearing

pursuant to notice in Washington, D.C., on March 6, 1996.

Counsel for respondent appeared at the hearing and presented

argument on the pending motion. Petitioner did not appear at the

hearing. However, she did file a Rule 50(c) statement with the

Court shortly before the hearing.3

In her Rule 50(c) statement, petitioner again reiterated her

claim that her rights have been violated by the issuance of the

notices of deficiency. Thus, petitioner's Rule 50(c) statement

includes the following statements:

in preparing notices of deficiency, respondent caused a
collateral estoppel and/or res judicata in violation of
petitioner's constitutional right of due process;
respondent is attempting to extort monies from
petitioner utilizing the notices of deficiency in
violation of law and Petitioner's constitutional right
to due process of law; notices of deficiency contain
penalties in violation of petitioner's constitutional

3
Petitioner did not sign the Rule 50(c) statement. We find
this curious, given that petitioner attempts to raise a
constitutional issue out of the alleged "failure" of respondent's
Service Center director to sign the notices of deficiency.
However, the fact of the matter is that the copy of each such
notice that is attached as an exhibit to the petition bears such
signature.
 - 6 -

right to due process of law; respondent's agent did
tell petitioner to petition the United States Tax Court
in violation of her constitutional right to due process
of law; respondent did utilize the United States Postal
Service for transmitting illegal attempts at extorting
monies from petitioner.
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

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); INDOPCO, Inc. v. Commissioner, 503 U.S.
 - 7 -

79, 84 (1992); 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 other than

petitioner's allegation that respondent has violated statutory

and constitutional standards by determining deficiencies in

petitioner's income taxes based on petitioner's failure to report

wage and self-employment income, by issuing notices of

deficiencies consistent with the deficiency procedures prescribed

by law, and by advising petitioner that she has the right to

contest respondent's determination in a prepayment forum; i.e.,

this Court. Petitioner's allegation constitutes nothing other

than tax protester rhetoric and legalistic gibberish, as

demonstrated by the passages from the petition and the Rule 50(c)

statement 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 January 31, 1996, provided

petitioner with an opportunity to assign error and allege

specific facts concerning her liability for the taxable years in
 - 8 -

issue. Unfortunately, petitioner failed to respond to the

Court's order as directed. If petitioner did not receive the

income determined by respondent, petitioner could have easily so

alleged.

We see no need to catalog petitioner's various 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). Suffice it to say that "It is within the

undoubted power of Congress to provide any reasonable system for

the collection of taxes * * * if only the injunction against the

taking of property without due process of law in the method of

collection and protection of the taxpayer is satisfied."

Wickwire v. Reinecke, 275 U.S. 101, 105-106 (1927); see Goss v.

Lopez, 419 U.S. 565 (1975). The deficiency procedures set forth

in subchapter B of chapter 63 of the Internal Revenue Code (secs.

6211-6215), which specifically provide for the issuance of

notices of deficiency and the prepayment review of such notices

by this Court, satisfy the "due process" standard of the 5th

Amendment. See Adler v. Commissioner, T.C. Memo. 1989-446, affd.

without published opinion 930 F.2d 26 (9th Cir. 1991); see also

Olshausen v. Commissioner, 273 F.2d 23 (9th Cir. 1959), affg. and
 - 9 -

remanding T.C. Memo. 1958-85; Swanson v. Commissioner, 65 T.C.

1180, 1181-1182 (1976).

Because the petition fails to state a claim upon which

relief can be granted, we shall grant respondent's motion to

dismiss, as supplemented. See Scherping v. Commissioner, 747

F.2d 478 (8th Cir. 1984).

We turn now, on our own motion, to 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 deficiencies in

income taxes or the additions to tax determined by respondent in

the notices of deficiency. Rather, the record demonstrates that

petitioner regards this case as a vehicle to protest the tax laws

of this country and espouse her 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, as set forth

in the petition and the Rule 50 statement, consists solely of
 - 10 -

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, taxpayers with

genuine controversies were delayed.

In view of the foregoing, we will exercise our discretion

under section 6673(a)(1) and require petitioner to pay a penalty

to the United States in the amount of $500. 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, supra at 408-411.

In order to reflect the foregoing,

An order of dismissal and

decision will be entered.