T.C. Memo. 2003-27
UNITED STATES TAX COURT
TRACEE CREEN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 4344-01. Filed January 30, 2003.
Tracee Creen, pro se.
Jeanne Gramling, for respondent.
MEMORANDUM OPINION
CHIECHI, Judge: This case is before us on respondent’s
motion to dismiss for lack of prosecution. At the request of
respondent, on October 7, 2002, the Court held a trial solely for
the purpose of permitting respondent to present evidence to
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satisfy the burden of proof under Rule 142(a)1 that respondent
has with respect to the increased deficiency in Federal income
tax (tax) alleged in respondent’s amendment to answer.
Background
The record establishes and/or the parties do not dispute the
following:
At the time petitioner filed the petition, petitioner’s
mailing address was in Tryon, North Carolina.
During 1998, Spartanburg Regional Medical Center
(Spartanburg Medical Center) employed petitioner and paid her
$16,679.62 in wages. During that year, Spartanburg Medical
Center deposited all of petitioner’s wages directly into her bank
account, except for $99.16 that it paid petitioner by check.
Spartanburg Medical Center reported the wages that it paid
petitioner during 1998 in Form W-2, Wage and Tax Statement (Form
W-2).2
In the notice of deficiency (notice) issued to petitioner
for her taxable year 1998, respondent determined a deficiency in
petitioner’s tax of $911 attributable to a State tax refund and
certain nonemployee compensation that she received during that
1
All Rule references are to the Tax Court Rules of Practice
and Procedure. All section references are to the Internal
Revenue Code in effect at all relevant times.
2
As reflected in Form W-2, during 1998 Spartanburg Medical
Center withheld $1,459.54 in tax from petitioner’s wages.
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year, but respondent did not determine a deficiency of $1,459
attributable to petitioner’s wage income that she received during
1998 from Spartanburg Medical Center.
On August 19, 2002, respondent filed a motion for leave to
file an amendment to answer (respondent’s motion to amend an-
swer), in which respondent alleged an increased deficiency for
petitioner’s taxable year 1998 in the amount of $1,459 attribut-
able to petitioner’s wage income of $16,679.62 from Spartanburg
Medical Center.3
On August 20, 2002, the Court ordered petitioner to file a
written response to respondent’s motion to amend answer. On
September 4, 2002, instead of filing such a response, petitioner
submitted to the Court a document that the Court had filed as
petitioner’s motion to dismiss (petitioner’s September 4, 2002
motion to dismiss).
In an Order dated September 5, 2002 (September 5, 2002
3
In respondent’s amendment to answer, respondent alleges in
part:
(c) Inasmuch as the Service Center initially
assessed the income from Spartanburg Regional Medical
Center under the math error provisions of I.R.C.
§ 6213(b)(1), respondent did not include the * * *
$16,679.62 from Spartanburg Regional Medical Center in
his determination of unreported income set forth in the
notice of deficiency for 1998 * * *
(d) Subsequently, respondent * * * abated the math
error assessment of the tax resulting from the income
received from Spartanburg Regional Medical Center.
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Order), the Court granted respondent’s motion to amend answer and
denied petitioner’s September 4, 2002 motion to dismiss. In that
Order, the Court indicated that petitioner’s September 4, 2002
motion to dismiss contained various statements, arguments, and
contentions that the Court found to be frivolous and/or ground-
less.4 In the Court’s September 5, 2002 Order, the Court re-
4
The following excerpts from petitioner’s September 4, 2002
motion to dismiss illustrate the various frivolous and/or ground-
less statements, arguments, and contentions contained in that
motion:
1. Very few citizens and residents of the United
States, domestic corporations, trusts, partner-
ships, etc., are liable for federal income taxes
imposed by Subtitle A of the Internal Revenue Code
that require keeping books and records and filing
returns. Taxing and liability statutes do not
apply to income sources, articles, activities and
transactions of the American people and domestic
juristic entities other than those who receive
income from foreign sources, insular possessions
of the United States, and maritime activity regu-
lated by treaty. * * *
* * * * * * *
4. Court documents and published district and circuit
court decisions verify that the Internal Revenue
Service is agent of the [federal] United States of
America, not Government of the United States.
* * * Court records therefore verify that Internal
Revenue Service personnel are agents of a foreign
government and Internal Revenue Service claims are
made on behalf of a government foreign to the
United States.
* * * * * * *
U.S. Tax Court subject matter jurisdiction is
limited to determining the correct amount of a defi-
(continued...)
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minded petitioner about section 6673(a)(1)5 and indicated that it
would be inclined to impose a penalty on her under that section
not in excess of $25,000 in the event that she continued to make
4
(...continued)
ciency and whether or not proper procedure was used for
determining the deficiency. Where venue, subject
matter jurisdiction and other collateral issues are
concerned, and where IRS personnel malfeasance and
misfeasance are concerned, district courts of the
United States, and under some circumstance, common law
courts in States of the Union, have subject matter
jurisdiction. Further, the U.S. Tax Court, which now
appears to be classified as an Article I court of the
United States, does not proceed in the course of the
common law, as required by the Fifth, Sixth and Seventh
Amendment to the Constitution of the United States, so
it is incompetent to provide remedies prescribed by the
Constitution and laws of the United States. Therefore,
I move for the U.S. Tax Court to dismiss this matter
for lack of subject matter jurisdiction. [Reproduced
literally.]
5
Sec. 6673(a)(1) provides in pertinent part:
SEC. 6673. SANCTIONS AND COSTS AWARDED BY COURTS.
(a) Tax Court Proceedings.--
(1) Procedures instituted primarily for de-
lay, etc.--Whenever it appears to the Tax Court
that--
(A) proceedings before it have been
instituted or maintained by the taxpayer
primarily for delay, [or]
(B) the taxpayer’s position in such
proceeding is frivolous or groundless, * * *
the Tax Court, in its decision, may require the tax-
payer to pay to the United States a penalty not in
excess of $25,000.
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frivolous and/or groundless statements, contentions, and/or
arguments.
On at least five separate occasions during July, August, and
September 2002, respondent unsuccessfully attempted to contact
petitioner through written correspondence for the purpose of
preparing this case for trial. At least during the pendency of
the instant proceeding, petitioner has failed to cooperate with
respondent.
On October 7, 2002, this case was called from the Court’s
trial calendar (calendar call) at the Court’s trial session in
Columbia, South Carolina. Neither petitioner nor any authorized
representative of petitioner appeared. Counsel for respondent
appeared and filed with the Court a motion to dismiss this case
for lack of prosecution on those issues in the case on which
respondent claims petitioner has the burden of proof. The Court
indicated that the Court would recall this case for hearing on
that motion on October 9, 2002. The Court instructed respondent
to attempt to send to petitioner via overnight delivery a copy of
respondent’s motion to dismiss for lack of prosecution together
with a cover letter advising her that the Court had set that
motion for hearing on October 9, 2002, and that the Court would
grant respondent’s motion to dismiss for lack of prosecution if
petitioner did not appear at that hearing. At the calendar call,
counsel for respondent requested the Court to hold a trial on the
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increased deficiency alleged in respondent’s amendment to answer
on which respondent has the burden of proof.
On October 7, 2002, this case was recalled for trial on the
increased deficiency alleged in respondent’s amendment to answer.
Neither petitioner nor any authorized representative of peti-
tioner appeared. Respondent appeared, and the Court held a trial
on the increased deficiency alleged by respondent.6
On October 9, 2002, this case was recalled for a hearing on
respondent’s motion to dismiss for lack of prosecution. Neither
petitioner nor any authorized representative of petitioner
appeared. Counsel for respondent appeared and informed the Court
that on October 7, 2002, she had sent to petitioner by U.S.
Postal Service Express Mail and by facsimile a copy of respon-
dent’s motion together with a transmittal letter informing
petitioner of the hearing on respondent’s motion to dismiss for
lack of prosecution that the Court scheduled on October 9, 2002,
and of the consequences of her failure to appear at that hearing.
On October 10, 2002, the Court received a document from
petitioner that the Court had filed as petitioner’s motion to
dismiss (petitioner’s October 10, 2002 motion to dismiss).
In an Order dated October 16, 2002 (October 16, 2002 Order),
the Court denied petitioner’s October 10, 2002 motion to dismiss.
6
The Court ordered the parties to file posttrial briefs.
Petitioner failed to file a brief in this case.
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In that Order, the Court indicated that petitioner’s October 10,
2002 motion to dismiss, like petitioner’s September 4, 2002
motion to dismiss, contained various statements, arguments,
contentions, and/or questions that the Court found to be frivo-
lous and/or groundless.7 In the Court’s October 16, 2002 Order,
7
Petitioner’s October 10, 2002 motion to dismiss restated
certain of the frivolous and/or groundless statements, arguments,
and contentions contained in petitioner’s September 4, 2002
motion to dismiss and set forth additional frivolous and/or
groundless statements, arguments, contentions, and/or questions.
By way of illustration, petitioner’s October 10, 2002 motion to
dismiss stated:
In order to resolve existing and/or avert future
controversy, the following must be objectively proven
in record for calendar years specified above. Please
address all questions and, where necessary, provide
documentary and whatever other evidence that supports
the findings:
1. What class or classes of tax are at issue, i.e.,
what taxing and liability statues, along with
implementing regulations, make me a person liable
for keeping books and records and filing returns?
(Sixth Amendment right to know the nature of the
action)
2. What internal revenue district, established in compli-
ance with requirements of 26 U.S.C. § 7621 and Execu-
tive Order #10289, is the situs of the taxable arti-
cles, activities and/or transactions from which the
alleged taxable income was derived?
3. What delegated authority, whether statutory or other-
wise, does IRS have for administering the class or
classes of tax at issue? (See 5 U.S.C. § 558(b))
4. What “officer, employee, or agency of the Treasury
Department [or] other officer of the United States” is
the delegate of the Secretary for purposes of collect-
ing income and employment taxes imposed by Chapters 1,
(continued...)
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the Court reminded petitioner about the Court’s September 5, 2002
Order, in which the Court had indicated that it would be inclined
to impose a penalty not in excess of $25,000 on her pursuant to
section 6673(a)(1) if she continued to make frivolous and/or
groundless statements, contentions, and/or arguments.
Discussion
We turn first to respondent’s motion to dismiss for lack of
prosecution. It is respondent’s position that petitioner has the
burden of proof on the determinations in the notice which that
motion addresses because petitioner failed to cooperate with
respondent in the preparation of this case for trial. Petitioner
does not dispute respondent’s position. On the record before us,
we agree with respondent that petitioner bears the burden of
proof with respect to the determinations in the notice. See sec.
7491(a)(1) and (2)(B).
Neither petitioner nor any authorized representative of
petitioner appeared at the hearing on October 9, 2002, on respon-
7
(...continued)
2 and 21 of the Internal Revenue Code in States of the
Union? (26 U.S.C. § 7701(a)(1)(A))
5. What order, agreement, contract or other such legal
document or device does the Internal Revenue Service
have that authorizes examination and collection activ-
ity on behalf of the “delegate” of the Secretary, as
defined at 26 U.S.C. § 7701(a)(12)(A), in States of the
Union? See §§ 1001(b)(2) of P.L. 105-206.
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dent’s motion to dismiss for lack of prosecution.8 The record in
this case does not contain any valid reason why the Court should
not dismiss this case for lack of prosecution.
We turn now to the trial in this case that the Court held at
respondent’s request on the increased deficiency for 1998 alleged
in respondent’s amendment to answer on which respondent has the
burden of proof. Neither petitioner nor any authorized represen-
tative of petitioner appeared at that trial. Respondent appeared
and established at the trial that during 1998 petitioner received
$16,679.62 in wages from Spartanburg Medical Center. On the
record before us, we find that respondent has carried respon-
dent’s burden of proof with respect to the increased deficiency
of $1,459 with respect to those wages alleged in respondent’s
amendment to answer.
Based on our examination of the entire record before us, we
shall grant respondent’s motion to dismiss this case for failure
by petitioner to prosecute, and we shall enter a decision sus-
taining the deficiency determination of $911 in the notice,
increased by $1,459 as alleged in respondent’s answer to amend-
ment.9
8
Nor did petitioner or any authorized representative of
petitioner appear on Oct. 7, 2002, at the calendar call.
9
In an appendix to respondent’s brief, respondent states
that “A federal withholding credit in the amount of $1,460 will
be applied against the deficiency” for petitioner’s taxable year
(continued...)
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Although respondent does not ask the Court to impose a
penalty on petitioner under section 6673(a)(1), the Court will
sua sponte determine whether to impose such a penalty. Neither
petitioner nor any authorized representative of petitioner
appeared on October 7, 2002, at the calendar call or at the trial
in this case. Nor did petitioner or any authorized representa-
tive of petitioner appear at the hearing on October 9, 2002, on
respondent’s motion to dismiss for lack of prosecution. More-
over, in the Court’s September 5, 2002 Order, the Court indicated
that petitioner’s September 4, 2002 motion to dismiss contained
various statements, arguments, and contentions that the Court
found to be frivolous and/or groundless. In that Order, the
Court also indicated it would be inclined to impose a penalty on
petitioner under that section not in excess of $25,000 in the
event she continued to make frivolous and/or groundless state-
ments, contentions, and/or arguments. Petitioner nonetheless
persisted in petitioner’s October 10, 2002 motion to dismiss in
advancing various statements, arguments, contentions, and ques-
tions that the Court found to be frivolous and/or groundless.
On the record before us, we find that petitioner instituted
and maintained this case primarily for delay. We further find on
that record that petitioner’s position in this case is frivolous
9
(...continued)
1998.
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and/or groundless. On the record before us, we shall impose a
penalty on petitioner pursuant to section 6673(a)(1) in the
amount of $250.
To reflect the foregoing,
An appropriate order of dis-
missal for lack of prosecution and
decision will be entered.