T.C. Memo. 1998-410
UNITED STATES TAX COURT
DAVID WHITE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 19412-97. Filed November 13, 1998.
David White, pro se.
Melanie R. Urban, for respondent.
MEMORANDUM OPINION
VASQUEZ, Judge: This case is before the Court on
respondent's motion for summary judgment under Rule 1211 and to
impose a penalty under section 6673. Respondent determined a
deficiency of $26,806, an addition to tax of $6,702 under section
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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6651(a) for late filing, and an addition to tax of $1,462 under
section 6654(a) for failure to pay estimated taxes with respect
to petitioner's 1995 Federal income tax.
Background
Petitioner resided in Houston, Texas, when he filed his
petition.
The notice of deficiency includes an explanation that the
adjustments made to petitioner's taxable income are attributable
to petitioner's failure to file a 1995 tax return and to report
various items of income including: (1) Nonemployee compensation
paid by Lincoln Investment Planning, Inc., General American Life
Insurance Co., and Willow Fork Drainage District; (2) interest
paid by Charles Schwab & Co. and Texas Commerce Bank; (3)
dividends paid by Pioneer U.S. Government Money Fund and All
Saints Credit Union; and (4) gains derived from stock sales in
1995. These items of income were reported to respondent on Forms
1099 and other information returns submitted by the payors.
Petitioner invoked this Court's jurisdiction by filing an
imperfect petition for redetermination, followed by an amended
petition. Respondent filed a timely answer to the amended
petition.
Respondent subsequently served petitioner with a request for
admissions (with attached exhibits) pursuant to Rule 90(a) and
filed the same with the Court pursuant to Rule 90(b). Petitioner
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failed to respond to respondent's request for admissions. As a
consequence, each matter set forth therein is deemed admitted
pursuant to Rule 90(c). Alexander v. Commissioner, 926 F.2d 197,
198-199 (2d Cir. 1991), affg. per curiam T.C. Memo. 1990-315;
Marshall v. Commissioner, 85 T.C. 267, 272 (1985).
Petitioner is deemed to have admitted the following facts
pursuant to Rule 90(c). Petitioner did not file an income tax
return for 1995. During 1995, petitioner received self-
employment income in the following amounts:
Payor Amount Received
Lincoln Investment Planning, Inc. $78,320
General American Life Insurance Co. 1,187
Willow Fork Drainage District 700
During 1995, petitioner received interest income from
Charles Schwab and Co. and Texas Commerce Bank, N.A., in the
amounts of $401.38 and $18.48, respectively. During that year,
petitioner received dividend income from Pioneer U.S. Government
Money Fund and All Saints Credit Union in the amounts of $27.36
and $154.79, respectively.
During 1995, petitioner sold shares of Pioneer Gold Shares-
Class A at a net gain of $549.19. During that year, petitioner
sold shares of Wainoco Oil at a net gain of $248.79.
Petitioner did not have reasonable cause for not filing his
1995 return. Petitioner is liable for the addition to tax
pursuant to section 6651(a)(1) for the taxable year 1995.
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Petitioner did not pay any estimated tax for the taxable year
1995 and is liable for the addition to tax pursuant to section
6654(a) for that year. Petitioner is liable for self-employment
tax in the amount of $9,737 for the taxable year.
After respondent filed a motion for summary judgment,
petitioner filed a response to respondent's motion that was
nothing more than tax protester rhetoric and legalistic gibberish
like:
1. Petitioner is not a taxpayer. * * *
* * * * * * *
5. "Income" as defined by law is limited to foreign
earned income and/or war profits and/or windfall profits.
* * *
* * * * * * *
7. The determination of gross income and adjusted gross
income is income applicable in Guam by the Guam Territorial
income tax. * * *
* * * * * * *
12. That all property including money accepted with
federal income tax returns, such as Form 1040, are accepted
as gifts to the United States and not accepted as taxes.
* * *
13. Tax Court has no jurisdiction regarding a
deficiency of gifts to the United States and the instant
deficiency notice is bogus and fraudulent.
Discussion
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 is
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appropriate "if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials,
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); see 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).
The moving party bears the burden of proving that there is
no genuine issue of material fact, and factual inferences will be
read in a manner most favorable to the party opposing summary
judgment. Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985);
Jacklin v. Commissioner, 79 T.C. 340, 344 (1982). Summary
judgment is appropriate where the facts deemed admitted pursuant
to Rule 90(c) support a finding that there is no genuine issue as
to any material fact. Morrison v. Commissioner, 81 T.C. 644,
651-652 (1983).
Based upon our review of the record, we are satisfied that
there is no genuine issue of material fact and that respondent is
entitled to judgment as a matter of law.
The deficiency determined by respondent in this case arises
from a reconstruction of petitioner's taxable income because
petitioner failed to provide respondent with adequate records or
to file a Federal income tax return for 1995. The factual
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allegations deemed admitted by petitioner under Rule 90(c)
establish: (1) Petitioner received taxable income during 1995 in
the amounts determined in the notice of deficiency; (2)
petitioner failed to establish reasonable cause for his failure
to file his income tax return and has provided no basis for his
failure to pay estimated taxes during 1995; and (3) petitioner is
liable for the deficiency and additions to tax for 1995 as
determined by respondent in the notice of deficiency.
In sum, the factual allegations deemed admitted by
petitioner under Rule 90(c) establish that respondent's
determinations with respect to petitioner's liabilities for the
deficiency and additions to tax for 1995 are correct, and we so
hold.
In the absence of any dispute as to a material fact in this
case, we shall grant respondent's motion for summary judgment.
Finally, we consider whether a penalty should be imposed
under section 6673. Section 6673(a)(1) provides that, whenever
it appears to the Tax Court that the taxpayer's position in a
proceeding is frivolous or groundless, the Court may impose a
penalty not in excess of $25,000. This Court has often imposed
such penalties on taxpayers who make frivolous tax protester
arguments. See, e.g., Coulter v. Commissioner, 82 T.C. 580, 584-
586 (1984); Abrams v. Commissioner, 82 T.C. 403, 408-413 (1984);
Wilkinson v. Commissioner, 71 T.C. 633, 639-643 (1979); Philips
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v. Commissioner, T.C. Memo. 1995-540, affd. without published
opinion 99 F.3d 1146 (9th Cir. 1996); Santangelo v. Commissioner,
T.C. Memo. 1995-468, affd. without published opinion 87 F.3d 1322
(9th Cir. 1996); McNeel v. Commissioner, T.C. Memo. 1995-211,
affd. without published opinion 76 F.3d 387 (9th Cir. 1996);
Devon v. Commissioner, T.C. Memo. 1995-206.
In a previous case involving petitioner, White v.
Commissioner, T.C. Memo. 1997-459 (White I), that involved his
1992, 1993, and 1994 taxable years and the receipt of income from
the same payors that are in issue in this case, we stated:
Consistent with * * * [Parker v. Commissioner, 117 F.3d
785, 787 (5th Cir. 1997)], we hold that petitioner has
failed to state a claim upon which relief may be granted.
In short, petitioner's assertion that respondent erred in
relying on reports from third-party payors in determining
the deficiencies in dispute, standing alone, carries no
weight. * * *
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 circumstances here suggest
that petitioner may have instituted this proceeding
primarily for purposes of delay. However, we shall not now
impose a penalty under section 6673(a)(1). Nonetheless we
take this opportunity to admonish petitioner that the Court
shall strongly consider imposing such a penalty if he
returns to the Court and makes similar arguments in the
future.
Even though the Court dismissed White I, petitioner filed
his petition in this case using the same arguments as in White I,
even after we cautioned him that we would strongly consider
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imposing a penalty if he returned to the Court and made similar
arguments. Accordingly, pursuant to section 6673, we will impose
a penalty on petitioner in the amount of $5,000.
To reflect the foregoing,
An order granting respondent's
motion for summary judgment and
penalty and decision will be
entered for respondent.