T.C. Memo. 1997-440
UNITED STATES TAX COURT
FREDERICK M. FOX, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 24822-95. Filed September 25, 1997.
Frederick M. Fox, pro se.
Christine V. Olsen, for respondent.
MEMORANDUM OPINION
COLVIN, Judge: This matter is before the Court on
respondent's motion for summary judgment under Rule 121.1 As
discussed below, we will grant respondent's motion. We will also
1
Rule references are to the Tax Court Rules of Practice and
Procedure. Section references are to the Internal Revenue Code
as in effect for the years in issue.
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impose a penalty against petitioner under section 6673 in the
amount of $7,500.
Respondent determined deficiencies in petitioner's income
taxes and additions to tax as follows:
Additions to tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654
1989 $34,925 $8,731 $2,362
1990 31,218 7,805 2,057
1991 40,067 10,017 2,307
1992 42,552 10,638 1,858
Background
A. Petitioner
Petitioner lived in Irvine, California, when he filed the
petition in this case.
Petitioner previously petitioned this Court in cases decided
at Fox v. Commissioner, T.C. Memo. 1989-232, affd. without
published opinion 943 F.2d 55 (9th Cir. 1991) (Fox I); Fox v.
Commissioner, T.C. Memo. 1993-37 (Fox II); and Fox v.
Commissioner, T.C. Memo. 1993-277, affd. without published
opinion 69 F.3d 543 (9th Cir. 1995) (Fox III). Petitioner's
positions in the previous cases were frivolous and groundless.
In Fox I and Fox III, we awarded penalties to the United States
under section 6673 on our own motion.
B. Petition
In the petition, petitioner contended respondent erred in
determining: (1) He was liable for deficiencies and additions to
tax; (2) his wages, interest, dividends, capital gains, and
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income from stock sales were includable in gross income; (3) he
had itemized deductions in the amounts of $31,060, $40,354, and
$37,704 for 1989 to 1991, and a standard deduction in the amount
of $3,600 for 1992; and (4) he was liable for additions to tax
for failure to file returns and failure to pay estimated tax for
1989 to 1992. In the petition, petitioner also contended: (1)
Respondent's answers to his inquiries were not courteous or
considerate, and (2) respondent violated his rights under the
Taxpayer Bill of Rights, subtitle J of the Technical and
Miscellaneous Revenue Act of 1988 (TAMRA), Pub. L. 100-647, 102
Stat. 334, and other rights.
The facts upon which petitioner relies in his petition to
support these contentions are:
he was never notified by the District Director that he
was required to maintain books and records and file a
return in accordance with IRC 6001 and 26 CFR 1.
6001(d);
* * * the Form 1040 is not associated with nor is it
the form required to be used to collect the income tax
under IRC Subtitle A, section 1;
* * * there has been a trespass of jurisdiction on the
part of the Commissioner and petitioner squarely
challenges the Commissioner's jurisdiction in issuing
these notices of deficiency.
Nothing listed by petitioner as facts could possibly justify
a holding that respondent's determinations are incorrect.
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C. Respondent's Request for Admissions and Petitioner's
Responses
On June 5, 1997, respondent served a request for admissions
on petitioner under Rule 90. Respondent's request for admissions
and petitioner's responses are as follows:
1. Petitioner admits that he did not file a U.S.
Individual Income Tax Return, Form 1040, for 1989, 1990, 1991 and
1992.
2. Petitioner admits that from 1989 to 1992 he received:
(a) Compensation for services as an airline pilot for American
Airlines in the amounts of $149,663, $150,708, $176,719, and
$155,171; (b) interest income from the American Airlines Credit
Union in the amounts of $521, $147, $409, and $587; and (c)
dividend income from various Merrill Lynch accounts in the
amounts of $853, $905, $1,075, and $457. Petitioner denies that
this income is taxable. Petitioner's response also includes the
word "jurisdiction" without explanation. We assume this (and
other unexplained references to "jurisdiction" in petitioner's
response to respondent's request for admissions) relates to
petitioner's contention in his petition that the Commissioner
lacked jurisdiction to issue the notices of deficiency.
3. Petitioner admits that he received: (a) Capital gain
income from various Merrill Lynch accounts totaling $4,754 in
1989; and (b) income of $88 from the sale of stock from
Merrill Lynch in 1990, and $2,786 in 1991. Petitioner denies
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that this income is taxable. Petitioner's responses relating to
these items also include without explanation the word
"jurisdiction".
4. Petitioner denies that he resided in California from
1989 to 1992. Petitioner responded as follows: "Did not
'reside' as that term is stipulatively used in Amendment 14 to
the U.S. Constitution. Jurisdiction."
Respondent attached several exhibits to the request for
admissions and the motion for summary judgment. The exhibits,
and petitioner's responses to respondent's request for
admissions, are as follows:
1. A copy of the notices of deficiency issued to
petitioner on: (a) March 9, 1994, for 1989 to 1991; and (b)
September 8, 1994, for 1992. Petitioner admitted receipt, but
denied that he is liable for income taxes. Petitioner stated
"jurisdiction" without explanation.
2. Copies of several statements or letters from petitioner
to respondent. Petitioner admits.
3. A copy of a letter from American Airlines to Frederick
M. Fox, dated September 2, 1992. Petitioner admits.
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4. A copy of a notice of bill from Frederick J. Fox dated
December 9, 1992. Petitioner responded "Denies. Wrong Frederick
Fox."2
5. A copy of an affidavit of applicable law and denial of
specific liability for Federal income taxes during calendar years
1989-92 from petitioner dated June 9, 1993. Petitioner admits.
6. A copy of letters from petitioner dated April 12, 1994.
Petitioner admits.
7. A copy of a document from petitioner entitled "DEMAND
for you to PROVE the existence of JURISDICTION at the
administrative level" dated June 6, 1994. Petitioner admits.
8. A copy of a document from petitioner entitled "BY
AFFIDAVIT" dated April 14, 1995. Petitioner admits.
9. A copy of a document from petitioner entitled
"MEMORANDUM AT LAW BY AFFIDAVIT" dated June 20, 1996. Petitioner
admits.
The statements by and letters and documents from petitioner
attached to respondent's motion for summary judgment and request
for admissions recite various frivolous tax protester arguments.
Discussion
A. Respondent's Motion for Summary Judgment
2
We do not consider this document in deciding whether to
grant respondent's motion for summary judgment.
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Respondent moved for summary judgment on July 21, 1997,
pursuant to Rule 121, on the grounds that there is no genuine
issue of material fact for trial. Petitioner objected and moved
to strike respondent's motion for summary judgment on August 13,
1997.
A decision will be rendered on a motion for summary judgment
if the pleadings, answers to interrogatories, deposition,
admissions, and any other acceptable materials, together with the
affidavits, if any, show that there is no genuine issue of
material fact and that a decision may be rendered as a matter of
law. Rule 121(b); Southern v. Commissioner, 87 T.C. 49, 51-52
(1986). The burden of proving that there is no genuine issue of
material fact is on the moving party. Naftel v. Commissioner, 85
T.C. 527, 529 (1985); Espinoza v. Commissioner, 78 T.C. 412, 416
(1982).
Matter admitted under Rule 90 is conclusively established
unless the Court on motion permits the admitting party to
withdraw or modify the admission. Rule 90(f). Petitioner has
not asked the Court to withdraw or modify his admissions.
Petitioner admits that he received income in the amount
respondent determined. He admits that he did not file tax
returns for the years at issue. He has alleged no facts in the
petition that could warrant a holding that he is not liable for
the addition to tax for failure to file returns under section
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6651 or failure to pay estimated tax under section 6654, or that
respondent's determination relating to his itemized deductions
for 1989, 1990, and 1991 and his standard deduction for 1992, was
in error. Likewise, he did not contend in his response to
respondent's summary judgment motion that any material facts are
in dispute relating to respondent's determination. We conclude
that his objections to respondent's determinations regarding his
deductions and the additions to tax are based solely on the same
frivolous contentions on which his entire case is based.
Petitioner asserts that the District Director never notified
him that he was required to maintain books and records and file a
tax return. The District Director is not required to do so. See
sec. 6001. He also frivolously asserts that the Form 1040 is
invalid and that respondent lacked jurisdiction to issue the
notice of deficiency. In petitioner's objections to respondent's
motion for summary judgment, as supplemented, and petitioner's
motion to strike respondent's motion, petitioner claims he is not
a protester; however, his contentions are merely a rehash of
familiar tax protester arguments. See Wilcox v. Commissioner,
848 F.2d 1007 (9th Cir. 1988), affg. T.C. Memo. 1987-225; United
States v. Romero, 640 F.2d 1014 (9th Cir. 1981).
Petitioner has not alleged any facts fairly related to
respondent's determinations, and he has not raised any issue that
could possibly be affected by a hearing. See Knighten v.
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Commissioner, 702 F.2d 59 (5th Cir. 1983). In Knighten, the U.S.
Court of Appeals for the Fifth Circuit said:
Since he has never alleged any facts at all, and his
legal arguments were clearly without merit, he has
failed to demonstrate that there is any issue the
resolution of which could possibly be affected by a
hearing; thus, there is simply no point in having one.
The Consitution does not require such futile exercises.
[Id. at 61.]
See also Morrison v. Commissioner, 81 T.C. 644, 651 (1983)
(summary judgment proper where taxpayers did not set forth
specific facts as required by Rule 121(d)).
We have examined all the materials in the record and
construed facts most favorably for petitioner. We conclude that
there is no dispute as to any material fact, that petitioner's
contentions are frivolous, and that respondent is entitled to
summary judgment.
We will deny petitioner's motion to strike respondent's
motion for summary judgment filed August 13, 1997, for the same
reasons for which we grant respondent's motion for summary
judgment.
B. Imposition of a Penalty Under Section 6673
We next decide whether the Court, on its own motion, should
award a penalty to the United States under section 6673.
Section 6673 provides that the Court may require the
taxpayer to pay a penalty to the United States not in excess of
$25,000 when proceedings have been instituted or maintained
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primarily for delay, where the taxpayer's position is frivolous
or groundless, or where the taxpayer unreasonably fails to pursue
administrative remedies. A taxpayer's position is frivolous or
groundless 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); Sicalides v.
Commissioner, T.C. Memo. 1989-164.
It is beyond any reasoned dispute that petitioner is subject
to Federal income taxation and that his position in his previous
cases was frivolous, groundless, and instituted primarily for
delay. Fox I, Fox III; see Fox II. Petitioner continues to
waste respondent's and the Court's time with stale tax protester
arguments. Petitioner's written materials show that he has an
ability to twist tax laws to support his frivolous positions.
Fox III. We imposed penalties under section 6673 on our own
motion in Fox I and Fox III, which were filed before petitioner
filed his petition in this case.
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We require petitioner to pay a penalty of $7,500 to the
United States under section 6673.
An appropriate order will
be issued, and decision will
be entered for respondent.