T.C. Memo. 2000-126
UNITED STATES TAX COURT
DANIEL FRANKLIN HAINES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 4571-97. Filed April 10, 2000.
Daniel Franklin Haines, pro se.
Lisa M. Oshiro, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
RUWE, Judge: Respondent determined deficiencies in
petitioner’s Federal income taxes and additions to tax as
follows:
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Additions to tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654
1992 $53,380 $2,757 $275
1993 64,534 4,976 626
1994 64,065 4,727 715
1995 55,566 4,567 772
The issues for decision are: (1) Whether petitioner is
subject to Federal income tax on wage income from United
Airlines; (2) whether petitioner is liable for additions to tax
for failing to timely file Federal income tax returns and for
failing to pay estimated taxes; and (3) whether a penalty should
be awarded to the United States under section 6673.1
FINDINGS OF FACT
Some of the facts have been deemed stipulated2 and are so
found.
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years at issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
2
The parties did not have a signed stipulation of facts at
trial. Respondent’s proposed stipulation of facts contained
facts such as petitioner’s address, copies of unsigned Forms
1040, with attached Forms W-2 from United Airlines, Inc., that
petitioner submitted to respondent for the years at issue, and
that showed petitioner’s wages from United Airlines during the
relevant years. Some of the facts were previously admitted in
response to respondent’s request for admissions.
At trial, petitioner asserted that the Forms 1040 were
irrelevant and then invoked his Fifth Amendment rights about each
proposed finding of fact. Based on our review of the entire
record, including petitioner’s various filings, we found that
there was no legitimate dispute concerning the facts stated in
the proposed stipulation of facts, and we granted respondent’s
motion to compel stipulation under Rule 91(f).
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The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioner resided in
Spanaway, Washington, at the time he filed his petition.
During the years 1992, 1993, 1994, and 1995, petitioner was
employed by United Airlines as a pilot. United Airlines paid
petitioner the following wages:
Year Wages
1992 $186,885.16
1993 195,700.03
1994 194,874.57
1995 174,289.54
Petitioner did not file timely Federal income tax returns
for the tax years 1992, 1993, 1994, and 1995. Petitioner
submitted unsigned Forms 1040, U.S. Individual Income Tax Return,
with attached Forms W-2, Wage and Tax Statement, to respondent.
The Forms 1040 each showed that they were received by
respondent’s Ogden Service Center on October 21, 1997. The
attached Forms W-2, from United Airlines, Inc., revealed wages
for each of the years in issue in the amounts stated above. The
Forms 1040 reported no income in the space provided. Attached to
the Forms 1040 were statements generally denying that petitioner
was a taxpayer and asserting that there was no statutory
authority upon which he could be taxed. The notice of deficiency
for the years in issue was mailed to petitioner on December 10,
1996.
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OPINION
On brief petitioner argues that: (1) Respondent has no
jurisdiction over him in this matter, and therefore, the notice
of deficiency is void; (2) this Court lacks subject matter
jurisdiction; and (3) petitioner is not a “person” or
“individual” as those terms are defined and applied in title 26.
Petitioner’s arguments are reminiscent of tax-protester
rhetoric that has been universally rejected by this and other
courts. We shall not painstakingly address petitioner's
assertions "with somber reasoning and copious citation of
precedent; to do so might suggest that these arguments have some
colorable merit." Williams v. Commissioner, 114 T.C. ,
(2000) (slip op. at 5) (quoting Crain v. Commissioner, 737 F.2d
1417, 1417 (5th Cir. 1984)). Accordingly, we hold that
petitioner is liable for the deficiency determined by respondent.
Respondent determined that petitioner is liable for an
addition to tax pursuant to section 6651(a)(1). Section
6651(a)(1) provides an addition to tax for failure to timely file
a 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 such 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
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due to reasonable cause and not willful neglect. See Rule
142(a); United States v. Boyle, 469 U.S. 241, 245-246 (1985).
The Forms 1040 that petitioner submitted for the years in
issue were unsigned, undated, and stamped received by
respondent’s Ogden Service Center on October 21, 1997, long after
the due dates for filing returns for the years in issue. The
only information petitioner provided on the Forms 1040 was his
name, a mailing address, and his Social Security number. Where
other information was required, petitioner simply wrote “not
required”. To each Form 1040, petitioner attached a Form W-2, as
provided by United Airlines. Petitioner also attached to each
Form 1040 a typed explanation as to why he “intentionally omitted
non-required information from [his] [F]orm 1040.”
Respondent also determined that petitioner is liable for
additions to tax pursuant to section 6654. Section 6654 provides
an addition to tax for failure to pay estimated taxes. Unless
petitioner demonstrates that one of the statutory exceptions
applies, imposition of this addition to tax is mandatory where
prepayments of tax, either through withholding or by making
estimated quarterly tax payments during the course of the taxable
year, do not equal the percentage of total liability required
under the statute. See sec. 6654(a); Niedringhaus v.
Commissioner, 99 T.C. 202, 222 (1992). Petitioner bears the
burden of proving his entitlement to any exception. See
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Habersham-Bey v. Commissioner, 78 T.C. 304, 319-320 (1982).
Petitioner failed to do so. We hold that petitioner is liable
for additions to tax under section 6654(a).
Respondent moved for a penalty under section 6673. Under
section 6673, this Court may award a penalty to the United States
of up to $25,000 when the proceeding has been instituted or
maintained by the taxpayer primarily for delay or if the
taxpayer's position in such proceeding is frivolous or
groundless. See sec. 6673. Based on the record, we conclude
that such an award is appropriate in this case.
Petitioner has pursued a frivolous and groundless position
throughout this proceeding, and he has refused to cooperate in
the discovery and stipulation process. Petitioner had previously
made frivolous and groundless arguments in the U.S. Bankruptcy
Court for the Western District of Washington (Bankruptcy Court)
prior to our proceeding. The Bankruptcy Court clearly informed
petitioner that he is a taxpayer and that he is required to file
valid income tax returns. Petitioner has wasted the time and
resources of two courts.
Petitioner knew or should have known that his position was
groundless and frivolous, yet he persisted in maintaining this
proceeding primarily to impede the proper workings of our
judicial system and to delay the payment of his Federal income
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tax liabilities. Accordingly, a penalty is awarded to the United
States under section 6673 in the amount of $25,000.
An appropriate order and decision
will be entered granting respondent’s
motion for a penalty, and decision
will be entered for respondent.