T.C. Memo. 1999-238
UNITED STATES TAX COURT
KENNETH G. AND KIM M. BOHNET, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 24733-97. Filed July 22, 1999.
Kenneth G. Bohnet and Kim M. Bohnet, pro sese.
Sandra Veliz, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
VASQUEZ, Judge: By separate notices of deficiency,
respondent determined the following deficiencies in and additions
to petitioners' 1995 Federal income tax:
Addition to Tax
Petitioner Deficiency Sec. 6651(a)
Kenneth G. Bohnet $14,899.00 $2,298.50
Kim M. Bohnet 2,419.00 265.75
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Unless otherwise indicated, all section references are to the
Internal Revenue Code in effect for the year in issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
After concessions,1 the issues for decision are: (1)
Whether petitioners are liable for the deficiencies determined by
respondent, (2) whether petitioners are liable for additions to
tax for failing to file a Federal income tax return for 1995, and
(3) whether petitioners engaged in behavior warranting the
imposition of a penalty pursuant to section 6673(a).
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time they filed
their petition, Kenneth G. Bohnet (Mr. Bohnet) and Kim M. Bohnet
(Mrs. Bohnet), husband and wife, resided in Ephrata, Washington.
In 1995, Mr. Bohnet earned $65,500 from Korach & Wilson
Insurance, Inc., $855 in nonemployee compensation from Fortis
Investors, and $173 in interest income. In 1995, Mrs. Bohnet
earned $21,874 from Grant County, Washington, and $11 in interest
1
Respondent concedes that the credit for withholding
income tax for Kim M. Bohnet should be $1,976 and not $1,356 as
determined. Petitioners concede that their interest income for
1995 is taxable.
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income. Petitioners did not file a Federal income tax return for
1995.
OPINION
Section 61 defines gross income as all income from whatever
source derived. Gross income includes compensation for services
and interest. See sec. 61(a)(1), (4). In general, the
Commissioner's determinations in a notice of deficiency are
presumed correct, and taxpayers bear the burden of proving them
erroneous. See Rule 142(a).
Petitioners do not challenge the facts on which respondent's
determinations are based or respondent's calculation of tax.
Petitioners stipulated that during 1995 they received wages and
interest. At trial and on brief, petitioners advanced shopworn
arguments characteristic of tax-protester rhetoric that has been
universally rejected by this and other courts. See Wilcox v.
Commissioner, 848 F.2d 1007 (9th Cir. 1988), affg. T.C. Memo.
1987-225; Carter v. Commissioner, 784 F.2d 1006, 1009 (9th Cir.
1986). Petitioners allege: (1) The wages they received are not
income subject to tax under section 61; (2) the Individual Master
File states that no notice of deficiency was ever sent; (3) the
Internal Revenue Service did not send a notice of deficiency and
did not file a return as mandated by section 6020(b); (4)
petitioners did not receive any wages, were not employees as
defined, and therefore had no filing requirement; and (5) taxing
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their wages violates the Sixteenth Amendment. We shall not
painstakingly address petitioners' assertions "with somber
reasoning and copious citation of precedent; to do so might
suggest that these arguments have some colorable merit." Crain
v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984).
Accordingly, we sustain respondent's determination that these
amounts are income.
We must next decide whether this income is community
property income.2 Under Washington law, with certain exceptions,
all property (including compensation earned by a spouse) acquired
after marriage is presumed community property and treated as
acquired or earned by each spouse. See Wash. Rev. Code Ann.
secs. 26.16.010 through 26.16.030 (West 1997); Zielasko v.
Commissioner, T.C. Memo. 1993-177. Community property income is
attributable 50 percent to each spouse. See Poe v. Seaborn, 282
U.S. 101 (1930). The parties presented no evidence demonstrating
that the compensation and interest earned by petitioners are not
community property. Therefore, we conclude that under Washington
2
Respondent, in separate notices of deficiency sent to Mr.
Bohnet and Mrs. Bohnet, determined that Mr. Bohnet is taxable on
100 percent of the compensation and interest he received and Mrs.
Bohnet is taxable on 100 percent of the compensation and interest
she received. Respondent, however, did not determine that 50
percent of the income earned by each petitioner is taxable income
to the nonearning spouse.
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law this income is community property and must be allocated 50
percent to each petitioner. See also Rule 142(a).
Respondent also determined that petitioners are liable for
additions to tax pursuant to section 6651(a)(1). Section
6651(a)(1) imposes an addition to tax for failure to file a
return on the date prescribed (determined with regard to any
extension of time for filing), unless the taxpayer can establish
that such failure is due to reasonable cause and not due to
willful neglect. The taxpayer has the burden of proving the
addition is improper. See Rule 142(a); United States v. Boyle,
469 U.S. 241, 245 (1985). Petitioners stipulated that they did
not file a return for 1995, and they offered no evidence showing
that their failure to file was due to reasonable cause and not
due to willful neglect. Accordingly, we hold that petitioners
are liable for the additions to tax under section 6651(a)(1).
By motion made at the conclusion of trial, respondent
requested that the Court impose a penalty pursuant to section
6673. Section 6673(a)(1) authorizes this Court to require a
taxpayer to pay to the United States a penalty not to exceed
$25,000 if the taxpayer took frivolous positions in the
proceedings or instituted the proceedings primarily for delay. A
position maintained by the taxpayer is "frivolous" where it is
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"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).
Petitioners' position, based on stale and meritless
contentions, is manifestly frivolous and groundless, and they
have wasted the time and resources of this Court. Accordingly,
we shall grant respondent's motion, and we shall impose a penalty
of $2,500 pursuant to section 6673.
To reflect the foregoing,
An appropriate order will
be issued, and decision will
be entered under Rule 155.