SCHECKEL v. COMMISSIONER

T.C. Summary Opinion 2001-84

UNITED STATES TAX COURT

ELMER P. SCHECKEL, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 6405-00S. Filed June 13, 2001.

Elmer P. Scheckel, pro se.

Lisa K. Hartnett, for respondent.

ARMEN, Special Trial Judge: This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.1 The decision to be

entered is not reviewable by any other court, and this opinion

should not be cited as authority.

1
Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for 1996
and 1997, the taxable years in issue, and all Rule references are
to the Tax Court Rules of Practice and Procedure.
 - 2 -

Respondent determined deficiencies in petitioner’s income

taxes and additions to tax for the years and in the amounts as

follows:

Additions to tax
Year Deficiency Sec. 6651(a)(1) Sec. 6651(a)(2) Sec. 6654(a)
1
1996 $2,366 $591.50 $125.93
1
1997 2,546 636.50 136.19
1
Cannot be computed until the date of payment.

The issues for decision are as follows:

(1) Whether petitioner is liable for the deficiencies in

income taxes and additions to tax as determined by respondent in

the notice of deficiency. We hold that he is.

(2) Whether petitioner is liable for a penalty under section

6673(a)(1). We hold that he is.

Background

None of the facts have been stipulated.

Petitioner resided in the State of Iowa at the time that his

petition was filed with the Court.

During 1996 and 1997, the taxable years in issue, petitioner

was employed by Transco Railroad Products, Inc. (Transco) and

received compensation in exchange for services rendered.

Utilizing Form W-2, Wage and Tax Statement, Transco reported

compensation paid to petitioner for the years in issue as

follows:

Year Amount
1996 $22,338
1997 23,749
 - 3 -

During 1996 and 1997, petitioner maintained an account with

Maynard Savings Bank (Maynard). Utilizing Form 1099, Maynard

reported the payment of interest to petitioner for the years in

issue as follows:

Year Amount
1996 $5
1997 30

Petitioner was unmarried throughout 1996. Petitioner

married in April 1997 and remained married for the balance of

that year.

Petitioner did not file a Federal income tax return for

either 1996 or 1997. Petitioner had no prepayments of tax,

either through withholding or the making of estimated quarterly

tax payments during the course of the taxable year, for either

1996 or 1997.

In or about September 1999, respondent prepared returns for

petitioner for 1996 and 1997 pursuant to the authority granted

respondent in section 6020(b).

On March 17, 2000, respondent mailed a notice of deficiency

to petitioner determining the deficiencies in income taxes and

the additions to tax that are in issue herein. See sec. 6212(a).

The deficiencies are based on respondent's determination that

petitioner failed to report compensation from Transco and

interest from Maynard in the amounts reported by the payors. In

computing the deficiencies, respondent utilized the tax table
 - 4 -

pertaining to unmarried (single) individuals and allowed

petitioner one personal exemption and the applicable standard

deduction.

The additions to tax under section 6651(a)(1) are based on

respondent's determination that petitioner's failure to file for

1996 and 1997 was not due to reasonable cause. The additions to

tax under section 6651(a)(2) are based on respondent’s

determination that petitioner’s failure to pay his tax liability

for 1996 and 1997 was not due to reasonable cause. Finally, the

additions to tax under section 6654(a) are based on respondent's

determination that petitioner failed to pay the requisite amount

of estimated taxes for 1996 and 1997.

On June 8, 2000, petitioner timely filed a petition for

redetermination. See sec. 6213(a).

Discussion

At trial, petitioner stated that he did not dispute any of

the income amounts determined by respondent in the notice of

deficiency.2 Rather, petitioner took the position that “The

income items are irrelevant.” In addition, petitioner alleged

that the Government has shown him nothing that “connects me with

2
Indeed, in the petition, petitioner did not set forth any
assignments of error nor any statements of fact. See Rule
34(b)(4) (“Any issue not raised in the assignments of error shall
be deemed to be conceded.”); see also Rule 34(b)(5); cf. Parker
v. Commissioner, 117 F.3d 785 (5th Cir. 1997); White v.
Commissioner, T.C. Memo. 1997-459.
 - 5 -

the Internal Revenue Code.” Notwithstanding the Court’s effort

to explain pertinent provisions of the Code, specifically

including sections 1 and 6673, petitioner persisted in advancing

what may only be described as tax protester arguments.

A. Petitioner’s Income Tax Liabilities

Section 1 of the Internal Revenue Code imposes a tax on the

taxable income of individuals. Section 63(b) defines “taxable

income”, as applicable to petitioner’s situation, as gross income

less the standard deduction and one personal exemption. Section

61(a)(1), (4) defines gross income to mean “all income from

whatever source derived, including * * * Compensation for

services * * * [and] Interest”.

As detailed above, petitioner received gross income in the

form of wages and interest income for the years in issue in the

following amounts:

1996 1997
Compensation $22,338 $23,749
Interest income 5 30
Gross income 22,343 23,779

Petitioner's taxable income for the years in issue is as

follows:

1996 1997
Gross Income $22,343 $23,779
less:
Personal exemption -2,550 -2,650
Standard deduction -4,000 -4,150
Taxable income 15,793 16,979
 - 6 -

Pursuant to section 1(c) for 1996 and section 1(d) for 1997,

as well as the tax tables mandated by section 3(a), (c),

petitioner’s tax liabilities for the years in issue are as

follows:

1996 1997
$2,366 $2,546

In view of the fact that petitioner did not file income tax

returns for the years in issue, petitioner’s tax liabilities for

those years constitute deficiencies in income taxes. See sec.

6211(a). Accordingly, we hold that petitioner is liable for the

deficiencies in income taxes as determined by respondent in the

notice of deficiency.3

B. Addition to Tax For Failure To File

As applicable to petitioner, section 6012(a)(1)(A)(i)

requires that an income tax return be filed by every individual

who has gross income equal to, or greater than, the sum of the

standard deduction and one personal exemption. For an individual

who is a calendar-year taxpayer, the return is due on or before

the 15th day of April following the close of the taxable year.

3
Because petitioner was married in 1997, see sec.
7703(a)(1), respondent should have utilized the tax table
applicable to married individuals filing separately and the
standard deduction applicable to that filing status. As a
consequence, respondent’s deficiency determination for 1997 was
understated. However, respondent has not asserted any claim for
an increased deficiency. See sec. 6214(a). Accordingly, we lack
jurisdiction to redetermine the correct amount of the deficiency.
See id.
 - 7 -

See sec. 6072(a).

Section 6651(a)(1) imposes an addition to tax for failure to

file a timely return.4 The addition to tax may be avoided if the

failure to file is due to reasonable cause and not due to willful

neglect. “Reasonable cause” contemplates that the taxpayer

exercised ordinary business care and prudence and was nonetheless

unable to file a return within the prescribed time. United

States v. Boyle, 469 U.S. 241, 246 (1985); sec. 301.6651-1(c)(1),

Proced. & Admin. Regs. “Willful neglect” means a conscious,

intentional failure or reckless indifference. United States v.

Boyle, supra at 245.

In the present case, petitioner failed to file income tax

returns for the years in issue. Petitioner’s professed belief

that he is not a taxpayer within the scope of the Internal

Revenue Code does not, as a matter of law, constitute reasonable

cause for petitioner’s failure to file. See Rowlee v.

Commissioner, 80 T.C. 1111, 1120 (1983) (rejecting taxpayer’s

claim that taxpayer is not a “person liable” for tax); Ebert v.

Commissioner, T.C. Memo. 1991-629 (rejecting taxpayer’s assertion

that there is no section of the Internal Revenue Code that makes

taxpayer liable for the taxes claimed), affd. without published

4
Sec. 6651(g)(1) provides that in the case of any return
made by the Commissioner under sec. 6020(b), such return shall be
disregarded for purposes of determining the amount of the
addition to tax under sec. 6651(a)(1).
 - 8 -

opinion 986 F.2d 1427 (10th Cir. 1993).

In view of the foregoing, we hold that petitioner is liable

for the additions to tax under section 6651(a)(1) as determined

by respondent in the notice of deficiency.

C. Addition to Tax for Failure To Pay

As applicable to petitioner, section 6151(a) provides that a

taxpayer who is required to file a return shall pay the tax shown

on the return at the time fixed for filing the return (determined

without regard to any extension of time for filing the return).

As previously discussed, for an individual who is a calendar-year

taxpayer, the return is due on or before the 15th day of April

following the close of the taxable year.

Section 6651(a)(2) imposes an addition to tax for failure to

pay the amount shown as tax on a return on or before the date

prescribed for payment of such tax.5 The addition to tax may be

avoided if the failure to pay is due to reasonable cause and not

due to willful neglect. “Reasonable cause” contemplates that the

taxpayer exercised ordinary business care and prudence in

providing for payment of the taxpayer’s tax liability and was

nonetheless unable to pay the tax or would suffer an undue

hardship if the tax was paid within the prescribed time. Sec.

5
Sec. 6651(g)(2) provides that the in the case of any
return made by the Commissioner under sec. 6020(b), such return
shall be treated as the return filed by the taxpayer for purposes
of determining the amount of the addition to tax under sec.
6651(a)(2).
 - 9 -

301.6651-1(c)(1), Proced. & Admin. Regs. “Willful neglect” means

a conscious, intentional failure or reckless indifference.

United States v. Boyle, supra at 245.

In the present case, petitioner failed to pay his tax

liability for either 1996 or 1997. Petitioner’s professed belief

that he is not a taxpayer within the scope of the Internal

Revenue Code does not, as a matter of law, constitute reasonable

cause for petitioner’s failure to pay his tax liabilities. See

Rowlee v. Commissioner, supra; Ebert v. Commissioner, supra.

In view of the foregoing, we hold that petitioner is liable

for the additions to tax under section 6651(a)(2) as determined

by respondent in the notice of deficiency.

D. Addition to Tax for Failure To Pay Estimated Tax

Section 6654 imposes an addition to tax for failure to pay

estimated tax. As applicable herein, imposition of the addition

is mandatory whenever prepayments of tax, either through

withholding or the making of estimated quarterly tax payments, 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); Grosshandler v. Commissioner, 75 T.C. 1, 20-21

(1980). Thus, in the present case, we need not address any issue

relating to reasonable cause and lack of willful neglect;
 - 10 -

extenuating circumstances are simply irrelevant.6 See Estate of

Ruben v. Commissioner, 33 T.C. 1071, 1072 (1960); see also

Grosshandler v. Commissioner, supra at 21.

In view of the foregoing, we hold that petitioner is liable

for the additions to tax under section 6654 as determined by

respondent in the notice of deficiency.

E. Penalty Under Section 6673

At trial, respondent orally moved for the imposition of a

penalty against petitioner pursuant to section 6673.

As relevant herein, 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 record in this case convinces us that petitioner was not

interested in disputing the merits of either the deficiencies in

income taxes or the additions to tax determined by respondent in

the notice of deficiency. See Coleman v. Commissioner, 791 F.2d

68, 71 (7th Cir. 1986). Rather, the record demonstrates that

petitioner regards this case as a vehicle to protest the tax laws

of this country and espouse his own misguided views.

6
We should not be understood to imply that petitioner had
reasonable cause or that there were any extenuating circumstances
relating to petitioner’s failure to pay estimated tax.
 - 11 -

Coleman v. Commissioner, supra.

Petitioner's position, at trial, consisted solely of tax

protester rhetoric. Based on well-established law, petitioner's

position is frivolous and groundless. See Crain v. Commissioner,

737 F.2d 1417, 1417 (5th Cir. 1984) ("We perceive no need to

refute these arguments with somber reasoning and copious citation

of precedent; to do so might suggest that these arguments have

some colorable merit.").

We are also convinced that petitioner instituted and

maintained this proceeding primarily, if not exclusively, for

purposes of delay. Having to deal with this matter wasted the

Court's time, as well as respondent's. Moreover, taxpayers with

genuine controversies may have been delayed.

At trial, the Court acquainted petitioner with the pertinent

provisions of section 6673. Nevertheless, petitioner persisted

with his protest agenda.

In view of the foregoing, we will grant respondent’s oral

motion and require petitioner to pay a penalty to the United

States in the amount of $500 pursuant to the provisions of

section 6673(a)(1). See Coleman v. Commissioner, supra at 71-72;

Crain v. Commissioner, supra at 1417-1418.
 - 12 -

Conclusion

Reviewed and adopted as the report of the Small Tax Case

Division.

To give effect to the foregoing,

An order granting respondent’s

oral motion and entering decision

for respondent will be entered.