T.C. Memo. 1998-168
UNITED STATES TAX COURT
TERRI L. BLAKE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 387-97, 3581-97. Filed May 7, 1998.
Terri L. Blake, pro se.
Christine V. Olsen, for respondent.
MEMORANDUM OPINION
GERBER, Judge: Respondent determined deficiencies in
petitioner’s Federal income tax and additions to tax as follows:
Additions to Tax
Sec. Sec. Sec.
Year Deficiency 6651(a)(1) 6651(a)(2) 6654(a)
1
1993 $21,167 $4,482 $2,590 $828
1994 22,057 5,354 --- ---
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1
In a motion for summary judgment, respondent
conceded that the sec. 6651(a)(2) addition to tax for
1993 was determined in error.
All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to
this Court's Rules of Practice and Procedure.
Respondent, subsequent to petitioner's failure to respond to
requests for admissions,1 filed a motion for summary judgment.
Rule 121(b) provides that a motion for summary judgment shall be
granted if the pleadings and admissions show that there is no
genuine issue of material fact and that a decision may be
rendered as a matter of law. Naftel v. Commissioner, 85 T.C.
527, 529 (1985). The moving party bears the burden of proving
that there is no genuine issue of material fact. Marshall v.
Commissioner, 85 T.C. 267, 271 (1985). The facts are viewed in a
light most favorable to the nonmoving party. Jacklin v.
Commissioner, 79 T.C. 340, 344 (1982).
Petitioner, throughout the administrative portion of this
proceeding, advanced several successive theories or reasons in
support of her position that she is not liable for Federal income
tax on her compensation or wages. At the hearing on respondent's
motion for summary judgment, respondent, under section 6673,
orally moved for penalties against petitioner on the grounds that
1
Petitioner's failure to respond to respondent's requested
admissions resulted in the admissions’ being deemed admitted.
See Rule 90(c).
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petitioner has maintained this proceeding for delay and/or that
petitioner's position is frivolous.
There is no question or dispute about the material facts in
these cases. Petitioner does not dispute that she received
$86,408 and $92,274 in compensation or wages from her employer
for the taxable years 1993 and 1994, respectively. Petitioner
resided in Mission Viejo, California, at the time her petitions
were filed. Petitioner filed her 1993 and 1994 Federal income
tax returns on June 5, 1996, and December 5, 1995, respectively.
On those returns, petitioner reported the amount of wages she
received and then, as an adjustment, claimed it was "Nontaxable
compensation * * * [Eisner v. Macomber, 252 U.S. 189 (1920)]”.
As a result, petitioner reported zero taxable income and
requested a refund of any withholding tax withheld by her
employer. Attached to petitioner's returns are explanations
that, in essence, propose the following reasons why the
compensation she received was not taxable: (1) There is no
statutory requirement to file a return of income; (2) she is a
resident and citizen of California and a nonresident for Federal
purposes; and/or (3) her wages were not a gain or profit in
accord with her reading of Eisner v. Macomber, supra.
Petitioner, by selectively analyzing statutes, regulations,
and case precedent out of context, has reached the conclusion
that amounts she received do not constitute taxable income.
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Petitioner, following in the footsteps of numerous others who
have unsuccessfully attempted to rationalize a way to avoid
paying Federal income tax, must also fail. We find petitioner’s
arguments to be either wholly without merit and not worthy of
further analysis and/or previously addressed by this and other
courts. See, for example, opinions holding that "Compensation
for labor or services, paid in the form of wages or salary, has
been universally, held by the courts of this republic to be
income, subject to the income tax laws currently applicable."
United States v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981); see
Funk v. Commissioner, 687 F.2d 264 (8th Cir. 1982), affg. per
curiam T.C. Memo. 1981-506; Broughton v. United States, 632 F.2d
706, 707 (8th Cir. 1980); Hayward v. Day, 619 F.2d 716, 717 (8th
Cir. 1980); Rowlee v. Commissioner, 80 T.C. 1111, 1120 (1983).
Further, we are not obligated to exhaustively review and/or rebut
petitioner’s misguided contentions. Crain v. Commissioner, 737
F.2d 1417 (5th Cir. 1984).
Accordingly, we sustain respondent’s determination that
petitioner's wages are income for petitioner’s 1993 and 1994
taxable years.
Respondent also determined additions to tax for 1993 and
1994 under section 6651(a)(1) (failure to file), and for 1993
under sections 6651(a)(2)2 (failure to pay tax) and 6654(a)
2
It has been conceded that the determination of the
(continued...)
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(failure to pay estimated tax). It is clear from the information
available in these cases that petitioner failed to file timely
returns. In addition, petitioner has offered no evidence or
sound explanation as to why these additions to tax should not be
imposed. In view of the foregoing, we hold that the additions to
tax under sections 6651(a)(1) and 6654(a) for the taxable year
1993, and section 6651(a)(1) for the taxable year 1994 are
sustained. Rule 142(a); New Colonial Ice Co. v. Helvering, 292
U.S. 435 (1934); Welch v. Helvering, 290 U.S. 111 (1933).
Finally, respondent orally moved for a penalty under section
6673. Section 6673(a)(1) authorizes the Court to require a
taxpayer to pay the United States a penalty not exceeding $25,000
when a taxpayer institutes or maintains a proceeding primarily
for delay or where the taxpayer's position is frivolous or
groundless, or the taxpayer unreasonably failed to pursue
available administrative remedies. Respondent did not seek a
specific amount and instead moved generally for a penalty under
section 6673.
At trial, petitioner offered a trial memorandum, which the
Court received and filed as a response to respondent's motion for
summary judgment. In that document, petitioner attempted to
characterize her dispute with respondent as one where she
"believes the income tax to be an excise tax." The document
2
(...continued)
application of sec. 6651(a)(2) was in error.
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references various opinions that concern the constitutionality of
taxes and address the question of direct and indirect taxes.
Most of the citations offered by petitioner in support of her
position are lifted out of context and are not necessarily
interrelated. She has attempted, albeit inartfully, to create a
conglomerated argument to support her quest to avoid paying
income tax. Petitioner explained at the hearing that she
obtained much of her information from the internet and that her
beliefs are sincere.
Although, as a matter of law, petitioner's argument will not
suffice to satisfy her avoidance goal, we must decide whether, as
respondent contends, petitioner maintained her position primarily
for delay and/or whether petitioner’s position is groundless or
frivolous. It does not appear that petitioner maintained her
position primarily for delay. However, petitioner’s argument and
position have, on numerous occasions, been unsuccessfully
advanced by others. Her position is, and has been, found to be
frivolous and without support. Under those circumstances, a
$1,000 penalty under section 6673 will be awarded in each of
these cases.
To reflect the foregoing,
Orders and decisions will be
entered for respondent, except for
the concession of the section
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6651(a)(2) addition to tax, and
respondent's oral motion for
penalties under section 6673 will
be granted.