T.C. Memo. 1997-305
UNITED STATES TAX COURT
ROSEMARY V. COCOZZA, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 639-96. Filed July 1, 1997.
Rosemary V. Cocozza, pro se.
J. Scot Simpson, for respondent.
MEMORANDUM OPINION
BEGHE, Judge: This case is before the Court on cross-
motions for summary judgment under Rule 121.1 For the year 1992,
respondent determined a deficiency of $8,026 in petitioner’s
1
All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code in effect for the year in issue.
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Federal income tax, an addition to tax of $1,911.50 under section
6651(a) for failure to file an income tax return, and an addition
to tax of $331.20 under section 6654(a) for failure to make
payments of estimated tax.
Background
The parties have stipulated that during 1992 petitioner
received total wage income of $44,506 from three employers
(Telecable Supply Corp., Lynn Electronics Corp., and Dial America
Marketing, Inc.) and had income tax withholding of only $380, and
that petitioner did not file an income tax return or make any
estimated tax payments for the year.
Respondent’s statutory notice based its determination on
reports by the payers of wages paid, allowed a personal exemption
allowance and the standard deduction, and computed the tax based
on single filing status. The statutory notice, in its “Summary
of Income Sources”, also refers to an “aggregate” loss of $3,673
and “realized” loss of $1,023 “paid” to petitioner by Lind-
Waldock & Co. but does not take any such loss into account in
computing petitioner’s tax liability.
Petitioner was a resident of Port Richey, Florida, at the
time of filing her petition. Paragraph 4 of the petition, in
which we would expect to find assignments of error, states in its
entirety as follows: “Petitioner did not engage in any income
excise taxable activities during the year in question, and Title
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27 CFR is inapplicable to deficiency assessments herein.” The
petition neither contains a paragraph 5 nor alleges any facts on
which petitioner bases her position in this case.
Notwithstanding the failure of the petition to set forth any
assignment of error or supporting statements of fact, respondent
did not file a motion to dismiss petitioner’s petition for
failure to state a claim on which relief can be granted.
Respondent instead filed a pro forma answer, setting forth the
following denials:
3. Denies that respondent’s determination of a
deficiency and additions to tax is erroneous.
4. Denies.
5. Denies generally each and every allegation of the
petition not hereinbefore specifically admitted,
qualified or denied.
On November 21, 1996, the Court’s notice setting case for
trial at the Court’s April 28, 1997, Tampa, Florida, trial
session and standing pretrial order were served on petitioner.
Respondent timely submitted a trial memorandum. Respondent’s
trial memorandum asserts, notwithstanding petitioner’s failure to
file a tax return for 1992, that she filed returns for 1989
through 1991, reporting wage income of the same order of
magnitude for each of those years as the total wage income
reported by petitioner’s payers for 1992. Neither respondent’s
trial memorandum nor any other document filed or served on
petitioner by respondent in this case contains any reference to
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the insufficiency of petitioner’s petition under Rule 34(b)
(which sets forth the required contents of a petition), the lack
of merit of her legal position, the failure to allege any facts,
or the possibility of a penalty under section 6673(a).
Petitioner and respondent appeared at the calendar call and
filed a stipulation of facts. At the calendar call, petitioner
lodged and served on respondent a “Memorandum of Law in Support
of Petition”. At the hearing, respondent’s counsel indicated, in
response to the Court’s questions, that respondent would allow a
loss with respect to Lind-Waldock & Co. if petitioner would
otherwise concede the case. Petitioner rejected respondent’s
offer; she replied: “I would truly like to stand on the
memorandum of law that I submitted to the Court and would not be
willing to make that agreement, your Honor.” The Court thereupon
caused petitioner’s memorandum to be filed as petitioner’s motion
for summary judgment, and respondent countered with an oral
motion for summary judgment. The Court informed the parties that
respondent need not file any papers in support of respondent’s
cross-motion and that it was taking the matter under advisement.
Discussion
Although we have inherent power to dismiss a party’s case
for failure to state a claim, see Rule 123(b); May v.
Commissioner, 752 F.2d 1301, 1303-1304 (8th Cir. 1985)(tax
protester arguments, including denial that wages are income;
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dismissal for failure to state a claim), we believe it is
preferable, in the circumstances of this case, briefly to address
the issue raised by the parties’ cross-motions for summary
judgment.
Petitioner’s “Memorandum of Law”, which the Court filed as
her motion for summary judgment, looks like a canned brief. It
rehashes discredited arguments that the income tax is an indirect
tax or excise tax that cannot be laid upon property, that not
only an individual’s labor, but also the income therefrom, is his
or her property, that an excise tax is a privilege tax that it is
unlawful to impose upon the individual’s inalienable right to
exist, which includes his labor, and that the holdings of the
Supreme Court in Stanton v. Baltic Mining Co., 240 U.S. 103
(1916), and Brushaber v. Union Pac. R.R., 240 U.S. 1 (1916), as
interpreted and applied in United States v. Gaumer, 972 F.2d 723,
724-725 (6th Cir. 1992), support her position.2
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,
2
Petitioner’s Memorandum of Law makes no mention of the
argument in her petition regarding Title 27 C.F.R., and we deem
it to have been abandoned.
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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).
Because the issue is purely legal, this case is ripe for
summary judgment. Timeworn discredited arguments that wages are
not taxable income suffice, as an alternative to dismissal, to
justify summary judgment for respondent. Coleman v.
Commissioner, 791 F.2d 68 (7th Cir. 1986) (wages not income);
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), see also
Crain v. Commissioner, 737 F.2d 1417 (5th Cir. 1984). There is
no need for us to spend any time on the arguments in petitioner’s
“Memorandum of Law”. Petitioner should read the foregoing cases,
if she has not already done so. We therefore grant respondent’s
motion for summary judgment, sustaining all of respondent’s
determinations, and deny petitioner’s motion.
We now raise sua sponte whether we should impose a penalty
under section 6673(a) against petitioner on the ground that
petitioner instituted or maintained the proceeding primarily for
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delay or that petitioner’s position in this proceeding is
frivolous or groundless. Although petitioner’s position clearly
has neither legal merit nor factual support, we have no basis in
this record for assessing petitioner’s motives in instituting and
maintaining the proceeding. There is no evidence in the Court’s
records that petitioner has previously been a litigant in this
Court. Nor is there any evidence in the record of this case that
petitioner had received any prior warnings in this proceeding, as
would have occurred if respondent had filed a motion to dismiss
the petition on the grounds that it failed to state a claim on
the basis of which relief could be granted.3 In the absence of a
basis in this record for assessing petitioner’s motives, see May
v. Commissioner, supra at 1306-1308, we shall not impose a
penalty under section 6673(a).
Petitioner’s unwillingness to dispose of this case by
agreement creates the impression that petitioner may wish to file
an appeal. We conclude by informing petitioner, as we have
3
The Court generally responds to such a motion by directing
the taxpayer to file a proper amended petition, as required by
Rule 34(b), setting forth with specificity each error made by
respondent in the statutory notice and separate statements of
fact on which the assignments of error are based. This procedure
gives the Court an opportunity to tell the taxpayer that her
arguments are tax protester arguments that have no merit, that
for the taxpayer to persist in making them would waste everyone’s
time, and to warn the taxpayer that to remain on her original
course will result in the imposition of sanctions under sec.
6673(a). If the taxpayer fails to respond to the Court’s order
or to amend the petition, we generally dismiss the case.
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informed other taxpayers advancing arguments having no legal
merit or factual support, see, e.g., Abrams v. Commissioner, 82
T.C. 403, 410-412 (1984); Talmage v. Commissioner, T.C. Memo.
1996-114, affd. without published opinion 101 F.3d 695 (4th Cir.
1996); 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 U.S.C. sec. 1912 (1994);
Fed. R. App. P. 38. The Court of Appeals for the Eleventh
Circuit, to which an appeal in this case would lie, has not
hesitated in appropriate cases to use its power to order
sanctions under these provisions. See, e.g., Pollard v.
Commissioner, 816 F.2d 603, 605 (11th Cir. 1987); McNair v.
Eggers, 788 F.2d 1509, 1510 (11th Cir. 1986); Biermann v.
Commissioner, 769 F.2d 707 (11th Cir. 1985); see also Coleman v.
Commissioner, supra at 72-73; Mathes v. Commissioner, 788 F.2d
33, 34-36 (D.C. Cir. 1986); Connor v. Commissioner, 770 F.2d 17,
20 (2d Cir. 1985).
To reflect the foregoing,
An appropriate order and
decision will be entered for
respondent.