T.C. Memo. 1996-277
UNITED STATES TAX COURT
ED M. FISHER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16104-94. Filed June 13, 1996.
Ed M. Fisher, pro se.
William R. Davis, Jr., for respondent.
MEMORANDUM OPINION
FAY, Judge: Respondent determined deficiencies in and
additions to petitioner's Federal income tax as follows:
Additions to Tax
Sec. Sec.
Year Deficiency 6651(a)(1) 6654
1989 $47,209 $8,552 $2,820
1990 70,955 17,739 4,672
1991 38,740 9,685 2,228
1992 42,101 10,525 1,836
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All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
The issues for decision after concessions by the parties
are:
1. Whether petitioner is liable for tax on income arising
from nonemployee compensation for the 1989, 1990, 1991, and 1992
tax years. We hold that he is.
2. Whether petitioner is liable for self-employment tax on
his nonemployee compensation during the 1989, 1990, 1991, and
1992 tax years. We hold that he is.
3. Whether petitioner is liable for additions to tax under
section 6651(a)(1) for failure to file for the 1989, 1990, 1991,
and 1992 tax years. We hold that he is.
4. Whether petitioner is liable for additions to tax under
section 6654 for failure to pay estimated tax for the 1989, 1990,
1991, and 1992 tax years. We hold that he is.
5. Whether petitioner is liable for a penalty under section
6673. We hold that he is.
Some of the facts have been stipulated. The stipulation of
facts and the attached exhibits are incorporated herein by this
reference. At the time he filed his petition, petitioner resided
in Branson, Missouri. Petitioner was married at all times during
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the years in issue. Petitioner did not file Federal income tax
returns for any of the years in issue.
On September 6, 1994, petitioner filed a petition with this
Court. Respondent filed her answer on October 24, 1994. On
December 30, 1994, petitioner filed Petitioner's Motion to Amend
Petition. On January 6, 1995, petitioner filed Petitioner's
Amended Petition.
The amended petition concedes the receipt of the dividend
and interest income attributed to petitioner in the notice of
deficiency. Petitioner indicates that he received, in 1989,
$4,099 in dividend income; in 1990, $57,685 in dividend income
and $46 in interest income; in 1991, $65 in interest income; and
in 1992, $15 in interest income.
The parties agree that petitioner received the following
amounts of nonemployee compensation for the years indicated.1
Petitioner received $137,600 in nonemployee compensation from
AT&T Technologies in 1989. Petitioner received $165,263 in
nonemployee compensation from AT&T Technologies in 1990. Peti-
tioner received $1,500 in nonemployee compensation from Integral
Technologies in 1990. Petitioner received $97,996 in nonemployee
compensation from Southern California Gas in 1991. Petitioner
received $7,760 in nonemployee compensation from Landbase Corp.
1
Petitioner claims that portions of all the amounts received
as nonemployee compensation were reimbursement of travel
expenses. However, petitioner, presented no evidence to support
such a claim.
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in 1991. Petitioner received $6,868 in nonemployee compensation
from Geographic General in 1991. Petitioner received $886 in
nonemployee compensation from the University of Wisconsin in
1991. Petitioner received $65,6392 in nonemployee compensation
from Xerox Corp. in 1992.
The parties agree that petitioner incurred deductible travel
expenses as follows which were not taken into account in the
notice of deficiency. In December 1991, petitioner incurred
deductible travel expenses of $1,177. Further, during 1992, in
connection with his relationship with Xerox Corp., petitioner
incurred $7,513 in deductible travel expenses.
On October 30, 1995, this case was called for trial in
Denver, Colorado. At trial, petitioner failed to offer any
evidence to support his case, documentary or testimonial;
instead, he attempted to pursue tax protester arguments that have
been long rejected by this Court.
On brief, petitioner argues that the tax respondent is
attempting to impose on his nonemployee compensation, earned as a
computer systems analyst, is an excise tax for which he is not
responsible. Petitioner claims that the Internal Revenue
Service, by collecting this excise tax and treating him as a
"taxpayer", exceeds its statutory authority. Petitioner's
2
This amount of $65,639 reflects a concession by respondent,
who originally asserted that petitioner received $123,538 in
nonemployee compensation for the 1992 tax year.
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arguments, based on these theories, have no merit. Rowlee v.
Commissioner, 80 T.C. 1111, 1119-1122 (1983). Petitioner's
argument that he does not hold the status of "taxpayer" is
frivolous. United States v. Studley, 783 F.2d 934, 937 (9th Cir.
1986).
Gross income, under section 61, means all income from
whatever source derived and includes income realized in any form,
whether in money, property, or services. Under section 1.61-1,
Income Tax Regs., gross income means all income from whatever
source derived, unless excluded by law. Since petitioner was a
citizen and resident of the United States and earned his income
in the United States, his income comes within the general defini-
tion of gross income under section 61. There is no exclusion
from taxation for such income. Moreover, under section 7701(a)(1)
petitioner was a "person" and was required, under section 6012,
to file Federal income tax returns and pay the income tax due
thereon. The authority of Congress to impose and collect Federal
income taxes from individuals has long been upheld as constitu-
tional. James v. United States, 366 U.S. 213 (1961); O'Malley v.
Woodrough, 307 U.S. 277 (1939); Lynch v. Hornby, 247 U.S. 339
(1918).
Petitioner contends that he was a citizen of the Republic of
Colorado during the years in issue and not a citizen of the
United States. This argument is no more than a stale tax
protester contention that has long been dismissed summarily by
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this Court and all other courts that have heard such contentions.
Rowlee v. Commissioner, supra. Petitioner is a taxpayer and is
subject to the income tax laws of the United States. United
States v. Sloan, 939 F.2d 499, 501 (7th Cir. 1991); Lovell v.
United States, 755 F.2d 517, 519 (7th Cir. 1984). The Court
rejects this and other tax protester types of arguments raised by
petitioner as being frivolous and without merit.
Petitioner has the burden of proof with respect to the
underlying deficiencies and each of the additions to tax. Rule
142(a); Shomaker v. Commissioner, 38 T.C. 192, 202 (1962). Peti-
tioner has not presented any evidence rebutting his liability for
the deficiencies and additions to tax determined by respondent.
We therefore sustain all of respondent's determinations.
At the trial, respondent made a motion under section 6673(a)
asking that we order petitioner to pay the United States a
penalty in an appropriate amount. Under section 6673, this Court
is permitted to impose a penalty in an amount up to $25,000 where
the proceedings have been instituted or maintained by the
taxpayer primarily for delay, where the taxpayer's position in
the proceeding is frivolous or groundless, or where the taxpayer
unreasonably failed to pursue available administrative remedies.
Grimes v. Commissioner, 82 T.C. 235, 238 (1984).
The record plainly demonstrates that petitioner well knew
that his income was taxable. His arguments have been rejected in
many decisions by this Court in the recent past. We conclude
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that petitioner is maintaining his action in this Court primarily
for delay, and that his position in this proceeding is frivolous
and groundless. Accordingly, a penalty is awarded to the United
States in the amount of $5,000. To reflect concessions,
An appropriate order will
be issued, and decision will
be entered under Rule 155.