T.C. Memo. 1999-264
UNITED STATES TAX COURT
RONALD MCDOUGLE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 4171-98. Filed August 6, 1999.
Ronald McDougle, pro se.
Paul Voelker, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
PARR, Judge: Respondent determined deficiencies in, and
additions to, petitioner's Federal income taxes as follows:
Additions to tax
Year Deficiency Sec. 6651(a) Sec. 6654(a)
1993 $16,198 $4,049.50 $678.69
1994 15,782 3,945.50 818.93
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All section references are to the Internal Revenue Code in
effect for the taxable years in issue, and all Rule references
are to the Tax Court Rules of Practice and Procedure, unless
otherwise indicated.
The issues for decision are: (1) Whether for 1993 and 1994
petitioner is properly subject to Federal income tax. We hold he
is. (2) Whether for 1993 and 1994 petitioner is liable for
additions to tax under section 6651(a). We hold he is. (3)
Whether for 1993 and 1994 petitioner is liable for additions to
tax under section 6654(a). We hold he is.
None of the facts have been stipulated.1 At the time the
petition in this case was filed, petitioner resided in Reno,
Nevada.
FINDINGS OF FACT
Petitioner did not file Federal income tax returns for the
taxable years 1993 and 1994.
In 1993, petitioner received nonemployee compensation from
M. Renken Distributing in the amount of $48,928, and gambling
winnings from Western Village Associates in the amount of $1,685.
In 1994, petitioner received nonemployee compensation from
M. Renken Distributing and Gordon Kinnaman in the amounts of
1
Petitioner refused to sign any documents, claiming
protection under the Fifth Amendment to the U.S. Constitution.
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$43,622 and $4,852, respectively, and gambling winnings from
Western Village Associates in the amount of $1,282.
OPINION
Petitioner does not challenge the facts on which
respondent's determinations are based, nor the calculation of
tax. Petitioner's argument is merely that he is not properly
subject to tax and is not required to file Federal income tax
returns.
Petitioner submitted documents, including six letters signed
by purported "tax professionals", in support of his argument.
These letters were from:
Sherwood T. Rodrigues
Certified Public Accountant (Ohio)
Sunnyvale, California
Michael L. Kailing
Tax Accountant
Honolulu, Hawaii
Guy G. Curtis*
Attorney at Law
Imperial, Nebraska
*Petitioner introduced two letters from Guy G. Curtis, Attorney at Law.
William T. Conklin, M.A.
Communication & Language Expert
Denver, Colorado
Fred M. Ortiz
Tax Consultant
Kailua-Kona, Hawaii
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Petitioner also sent copies of the documents he submitted to
the following persons:
William T. Conklin - Paralegal
Denver, Colorado
Lowell Becraft - Attorney
Huntsville, Alabama
Guy Curtis - Attorney
Imperial, Nebraska
The main theme of the letters, and petitioner's argument, is
that he is not required to file a Federal income tax return
because it is a voluntary practice. Paying taxes is not
voluntary. See Wilcox v. Commissioner, 848 F.2d 1007, 1008 (9th
Cir. 1988), affg. T.C. Memo. 1987-225; Carter v. Commissioner,
784 F.2d 1006, 1009 (9th Cir. 1986); Malone v. Commissioner, T.C.
Memo. 1998-372; Liddane v. Commissioner, T.C. Memo. 1998-259;
Stonerock v. Commissioner, T.C. Memo. 1986-264; see also United
States v. Bressler, 772 F.2d 287, 292 (7th Cir. 1985); May v.
Commissioner, 752 F.2d 1301, 1304 & n.3 (8th Cir. 1985); United
States v. Wilber, 696 F.2d 79, 80 (8th Cir. 1982).
The letters also contain additional hackneyed arguments that
have been universally rejected by this and other courts. See
Wilcox v. Commissioner, supra; see also Fujita v. Commissioner,
T.C. Memo. 1999-164. We shall not painstakingly address
petitioner's assertions "with somber reasoning and copious
citation of precedent; to do so might suggest that these
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arguments have some colorable merit." See Crain v. Commissioner,
737 F.2d 1417, 1417 (5th Cir. 1984). No useful purpose would be
served by any further explanation. Suffice to say, petitioner is
subject to Federal income tax during the relevant years, and we
sustain respondent's deficiency determinations.
Respondent determined an addition to tax under section
6651(a) for failure to file a timely return for 1993 and 1994.
Section 6651(a) provides for an addition to tax for failure to
file a timely return. The addition to tax is equal to 5 percent
of the amount required to be shown as tax on the return, with an
additional 5 percent for each additional month or fraction
thereof during which the failure continues, not exceeding 25
percent in the aggregate.
A taxpayer may avoid the addition to tax by establishing
that the failure to file a timely return was due to reasonable
cause and not willful neglect. See Rule 142(a); United States v.
Boyle, 469 U.S. 241, 245-246 (1985). Petitioner asserts that he
relied on the advice rendered to him in the letters he submitted
to the Court. As evident from the documents he submitted to the
Court, petitioner had to search nationwide to procure materials
in support of his meritless positions.
While reliance on advice as to whether a return must be
filed may constitute reasonable cause, the person giving that
advice must be competent to render that advice and the reliance
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on that advice must be reasonable. See United States v. Boyle,
supra at 250; see also Bowman v. Commissioner, T.C. Memo. 1993-
88. By the very nature of the advice given, petitioner's
reliance on that advice was not reasonable. See Bowman v.
Commissioner, supra; see also Sanders v. Commissioner, T.C. Memo.
1997-452 ("While petitioner may have honestly believed that she
did not have to file tax returns, that belief was not
reasonable."). Petitioner has not established that his failure
to file timely returns was due to a reasonable cause.
Accordingly, we sustain respondent's determinations on this
issue.
Respondent determined an addition to tax under section
6654(a) for underpayment of individual estimated tax. Petitioner
failed to pay estimated tax during the years in issue, and he has
offered no evidence to show that he qualifies for one of the
exceptions provided in section 6654(e). Thus, respondent's
determinations on this issue are sustained.
The Tax Court is authorized under section 6673(a)(1) to
require a taxpayer to pay to the United States a penalty not in
excess of $25,000 when it appears to the Court that the
taxpayer's position in the proceeding is frivolous or groundless.
Petitioner's position, based on stale and meritless
contentions, is manifestly frivolous and groundless, and his
action has resulted in the waste of limited judicial and
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administrative resources. Previously, on its own motion, this
Court has awarded damages to the United States under section 6673
where the taxpayer advanced frivolous and groundless contentions
similar to those advanced by petitioner. See Abrams v.
Commissioner, 82 T.C. 403, 408-413 (1984). Although we do not
now impose a penalty under section 6673(a)(1), we caution
petitioner that if he continues to advance such arguments to this
Court, he will invite such penalties in the future.
To reflect the foregoing,
Decision will be entered
for respondent.