T.C. Memo. 1999-1
UNITED STATES TAX COURT
KEVIN JAMES CULLINANE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10032-96. Filed January 4, 1999.
Kevin James Cullinane, pro se.
Lisa N. Primavera, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
SWIFT, Judge: Respondent determined a deficiency of $14,878
in petitioner's Federal income tax for 1993 and additions to tax
under sections 6651(a)(1) and 6654(a) in the amounts of $3,720
and $623, respectively.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
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all Rule references are to the Tax Court Rules of Practice and
Procedure.
The issues for decision are: (1) Whether $46,818 that
petitioner received as compensation for services constitutes
taxable income; and (2) whether petitioner is liable for
additions to tax under sections 6651(a)(1) and 6654(a).
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
When the petition was filed, petitioner resided in Newport
Beach, California.
In 1993, petitioner received $46,818 as compensation for
services rendered as a lecturer and researcher for Miliken & Co.
For 1993, petitioner did not make estimated tax payments,
and petitioner did not file an individual Federal income tax
return.
On audit, respondent determined that petitioner received the
$46,818 as taxable income. Respondent also determined that
petitioner is liable for the additions to tax.
OPINION
Gross income is defined as all income from whatever source
derived, including compensation for services. Sec. 61(a)(1).
In general, respondent's determinations in a notice of
deficiency are presumed to be correct, and taxpayers bear the
burden of proving that those determinations are erroneous. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
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Petitioner makes numerous tax protester arguments.
Petitioner argues that he has a basis in his labor equal to his
compensation and that therefore the $46,818 in compensation he
received in 1993 does not constitute taxable income. Petitioner
also argues that the Federal income tax constitutes an excise tax
and that his compensation was not earned under any privilege or
license on which an excise tax can be imposed.
Courts have consistently held that compensation for services
rendered constitutes taxable income and that taxpayers have no
tax basis in their labor. Carter v. Commissioner, 784 F.2d 1006,
1009 (9th Cir. 1986); Olson v. United States, 760 F.2d 1003, 1005
(9th Cir. 1985); United States v. Romero, 640 F.2d 1014, 1016
(9th Cir. 1981); Abrams v. Commissioner, 82 T.C. 403, 407 (1984);
Rowlee v. Commissioner, 80 T.C. 1111, 1119-1122 (1983).
Courts have also rejected the argument that a taxpayer is
liable for income tax only if the taxpayer has received a
privilege or license on which an excise tax can be imposed.
Olson v. United States, supra at 1005; United States v. Buras,
633 F.2d 1356, 1361 (9th Cir. 1980).
Petitioner has stipulated that he received the $46,818 in
question as compensation for services. We conclude that the
$46,818 petitioner received in 1993 from Miliken & Co.
constitutes taxable income. We also reject petitioner's other
tax protester arguments.
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Additions to Tax
Under section 6651(a)(1), an addition to tax is imposed for
failure to file a Federal income tax return. This addition to
tax will not be imposed if it is shown that the failure to file
was due to reasonable cause and not due to willful neglect.
Petitioner has not presented any evidence that his failure
to file was due to reasonable cause. Petitioner's argument that
he is not required to pay tax on compensation for services does
not constitute reasonable cause. We conclude that petitioner is
liable for the addition to tax under section 6651(a)(1).
Under section 6654(a), an addition to tax is imposed for
failure to make estimated income tax payments. Petitioner
stipulated that he made no payments of estimated tax, and
petitioner does not assert that an exception applies. We
conclude that petitioner is liable for the addition to tax under
section 6654.
To reflect the foregoing,
Decision will be entered
for respondent.