Hawkins v. Comm'r

T.C. Memo. 2003-181

UNITED STATES TAX COURT

MICHAEL T. HAWKINS AND JANINE M. HANSEN, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 10747-01. Filed June 20, 2003.

Michael T. Hawkins and Janine M. Hansen, pro sese.

Alan J. Tomsic, for respondent.

MEMORANDUM OPINION

WOLFE, Special Trial Judge: This matter is before the Court

on petitioners’ Motion to Dismiss for Lack of Jurisdiction,

respondent’s Motion for Summary Judgment, and respondent’s Motion

to Impose a Penalty under Section 6673. Unless otherwise

indicated, all section references are to the Internal Revenue

Code in effect for the years in issue, and all Rule references

are to the Tax Court Rules of Practice and Procedure.
 - 2 -
Background

Petitioners failed to file Federal income tax returns for

1997, 1998, and 1999. On May 25, 2001, respondent issued to each

petitioner a notice of deficiency for those years. Relying on

Forms W-2, Wage and Tax Statement, and Forms 1099 information,

respondent determined deficiencies in petitioners’ Federal income

taxes as follows:

Michael T. Hawkins

Year Deficiency Sec. 6651(a)(1) Sec. 6654(a)
1997 $8,291.00 $1,074.75 $206.27
1998 7,852.00 1,621.75 289.88
1999 8,435.80 1,311.20 236.68

Janine M. Hansen

Year Deficiency Sec. 6651(a)(1) Sec. 6654(a)
1997 $1,255.00 $313.75 --
1998 848.00 212.00 --
1999 848.00 212.00 --

Petitioners resided in Sparks, Nevada, on August 23, 2001, when

they timely filed their petition.

On October 12, 2001, respondent filed an Answer. On March

15, 2002, respondent then filed a Motion for Summary Judgment

(summary judgment motion). On April 22, 2002, petitioners filed

a Response to Motion for Summary Judgment (response to summary

judgment motion) and a Motion to Dismiss for Lack of Jurisdiction

(jurisdiction motion). The Court heard the motions together, and

at the conclusion of the hearing respondent made an oral Motion

to Impose a Penalty under Section 6673 (penalty motion). The

parties did not enter into a stipulation of facts.
 - 3 -
Discussion

I. Jurisdiction Motion

We consider the jurisdiction motion first because our

jurisdiction is prerequisite to any other action we may take.

The jurisdiction of this Court is governed by statute. Sec.

7442. For a taxpayer to maintain an action in this Court there

must be a valid notice of deficiency and a timely filed petition.

Rule 13(a), (c); Monge v. Commissioner, 93 T.C. 22, 27 (1989);

Abeles v. Commissioner, 91 T.C. 1019, 1025 (1988).
In the jurisdiction motion, petitioners do not dispute that

respondent issued a notice of deficiency to each of them for each

of the years in issue, and they do not dispute that the petition

they filed was timely. Instead, petitioners contend: (1) That

Rules 24 and 200, governing appearance and practice of counsel

before the Court, violate the Religious Freedom Restoration Act

of 1993 (RFRA), Pub. L. 103-141, sec. 2, 107 Stat. 1488,

currently codified at 42 U.S.C. secs. 2000bb to 2000bb-4 (2000);
(2) that petitioners are not “taxpayers” subject to the

jurisdiction of this Court; and (3) that the issues raised in the

jurisdiction motion, including petitioners’ claim of

constitutional entitlement to a jury trial, can be decided only

by an Article III court.

A. Rules 24 and 200 Do Not Violate RFRA

Section 7453 provides generally that “the proceedings of the

Tax Court * * * shall be conducted in accordance with such rules

of practice and procedure (other than rules of evidence) as the
 - 4 -
Tax Court may prescribe”. Accordingly, this Court has “over many

years developed a comprehensive set of Rules which are designed

and calculated to increase our efficiency in adjudicating genuine

tax disputes.” Blum v. Commissioner, 86 T.C. 1128, 1131 (1986).1

Rule 24(a)(4) provides:

No entry of appearance by counsel not admitted to
practice before this Court will be effective until
counsel shall have been admitted, but counsel may be
recognized as counsel in a pending case to the extent
permitted by the Court and then only where it appears
that counsel can and will be promptly admitted. For
the procedure for admission to practice before the
Court, see Rule 200.

Rule 200 restricts admission to practice before the Tax

Court to two classes of persons: (1) Attorneys in good standing

of the Bar of the Supreme Court of the United States, or of the

highest or appropriate court of any State or of the District of

Columbia, or any commonwealth, territory, or possession of the

United States; and (2) applicants, not attorneys at law, who pass

a written examination given by the Tax Court as well as an

additional oral examination if required by the Court. This Court

has stated: “The requirement that only qualified persons are

permitted to represent litigants before this Court is for the

protection of litigants by insuring that only persons able to

properly represent a party appear for him.” Cupp v.

1
Section 7452 specifically provides that the taxpayer shall be
represented in accordance with the Rules of Practice and
Procedure prescribed by this Court. See sec. 301.7452-1, Proced.
& Admin. Regs. Section 7452 further provides that “No qualified
person shall be denied admission to practice before the Tax Court
because of his failure to be a member of any profession or
calling.”
 - 5 -
Commissioner, 65 T.C. 68, 85 (1975), affd. without published

opinion 559 F.2d 1207 (3d Cir. 1977). Petitioners argue that the

requirements of Rule 24(a)(4) and Rule 200 conflict with their

religious rights under RFRA, that these Rules are invalid, and

that, therefore, this Court lacks jurisdiction.

Congress enacted RFRA in response to Employment Div. v.

Smith, 494 U.S. 872 (1990).2 In Smith, the Supreme Court held

that valid neutral laws of general applicability do not violate a

person’s religious rights even when the law is not supported by a

compelling governmental interest. See id.; Adams v.
Commissioner, 110 T.C. 137, 138 (1998), affd. 170 F.3d 173 (3d

Cir. 1999). Prior to Smith, the Government had to demonstrate

that the application of such laws to religious practices was

“essential to accomplish an overriding Governmental interest” or

represented “the least restrictive means of achieving some

compelling state interest.” Employment Div. v. Smith, supra at

899 (O’Connor, J., concurring in judgment); see also Adams v.

Commissioner, supra at 138.

RFRA restores the compelling interest test used prior to

Smith by prohibiting the Government from imposing a substantial

burden on the free exercise of religion unless it demonstrates

2
In City of Boerne v. Flores, 521 U.S. 507, 536 (1997), the
Supreme Court held that the Religious Freedom Restoration Act of
1993 (RFRA), Pub. L. 103-141, sec. 2, 107 Stat. 1488, currently
codified at 42 U.S.C. secs. 2000bb to 2000bb-4 (1994), was
unconstitutional as applied to State and local laws. Although
neither party has raised the issue, we note that RFRA has since
been upheld as constitutional as applied in the Federal realm.
See Guam v. Guerrero, 290 F.3d 1210, 1221 (9th Cir. 2002).
 - 6 -
that application of the burden is the least restrictive means of

achieving a compelling governmental interest.3 See 42 U.S.C.

sec. 2000bb-1(b); Adams v. Commissioner, supra. In evaluating

whether the Government has met the compelling interest test,

cases decided prior to Smith are applicable, and the test “should

not be construed more stringently or more leniently than it was

prior to Smith.” Adams v. Commissioner, supra at 139.

1. Substantial Burden
To establish a violation under RFRA, a claimant must first

show that the Government “substantially burdened” his or her free

exercise of religion. 42 U.S.C. sec. 2000bb-1(a). A statute

burdens the free exercise of religion if it “puts substantial

pressure on an adherent to modify his behavior and to violate his

beliefs”. Thomas v. Review Bd. of Ind. Employment Sec. Div., 450

U.S. 707, 718 (1981). A substantial burden must be more than an

3
In addition to the compelling interest test provided for by
RFRA, petitioners rely on Miller v. Reed, 176 F.3d 1202, 1207
(9th Cir. 1999), to assert a hybrid-rights claim and apply a
strict scrutiny analysis. In Employment Div. v. Smith, 494 U.S.
872, 881-882, (1990), the Supreme Court excepted a hybrid-rights
claim from its rational basis analysis and thus recognized the
applicability of the strict scrutiny analysis where a law
“[involves] not the Free Exercise Clause alone, but the Free
Exercise Clause in conjunction with other constitutional
protections”. Petitioners’ argument for strict scrutiny analysis
here amounts to a request for application of the compelling
interest test set forth by RFRA. See, e.g., Hill v. Colorado,
530 U.S. 703, 748 (Scalia, J., dissenting)(2000), (referring to
“that stringent mode of constitutional analysis our cases refer
to as ‘strict scrutiny,’ which requires that the restriction be
narrowly tailored to serve a compelling state interest.”); see
also Kessler v. Commissioner, 87 T.C. 1285, 1290 (1986), affd.
838 F.2d 1215 (6th Cir. 1988).
 - 7 -
inconvenience. Guam v. Guerrero, 290 F.3d 1210, 1222 (9th Cir.

2002) (citing Worldwide Church of God v. Phila. Church of God,

Inc., 227 F.3d 1110, 1121 (9th Cir. 2000)).4

Petitioners present mere summary assertions that Rules 24

and 200 substantially burden their right to free exercise of

religion and fail to identify any aspect of their religion that

has been violated. At the hearing, petitioners sought to have a

religious adviser enter an appearance as their counsel. This

person was not an attorney, nor had he established his

qualifications by passing a written examination given by the Tax

Court, and the Court would not accept his formal appearance.

Nevertheless, the Court allowed petitioners’ religious adviser to

confer with petitioners at regular intervals throughout the

proceedings and to sit at petitioners’ counsel desk. Petitioners

stated that they had spoken with an attorney regarding this

matter, that the attorney was a member of the bar of the State of

Nevada, but that the attorney would have refused to pay the fee

4
RFRA originally defined the term “exercise of religion” as
“the exercise of religion under the First Amendment to the
Constitution”. 42 U.S.C. sec. 2000bb-2(4)(1994). The Religious
Land Use and Institutionalized Persons Act of 2000 (RLUIPA), Pub.
L. 106-274, 114 Stat. 803-807, currently codified at 42 U.S.C.
secs. 2000cc to 2000cc-5 (2000), amended certain provisions of
RFRA, including the definition of “exercise of religion”. RLUIPA
secs. 7(a)(3), 8(7)(a). RLUIPA amends RFRA so that “exercise of
religion” now means “religious exercise, as defined in section
2000cc-5 of this title.” 42 U.S.C. sec. 2000bb-2(4) (2000).
“Religious exercise”, for purposes of RFRA, is defined to include
“any exercise of religion, whether or not compelled by, or
central to, a system of religious belief.” RLUIPA, 42 U.S.C.
sec. 2000cc-5(7)(A).
 - 8 -
required to appear before the Court. Nevertheless, the attorney

was not present at the hearing.

On this record, we find that Rules 24 and 200 did not place

a substantial burden on petitioners’ exercise of religion. Those

Rules did not put substantial pressure on petitioners to modify

their behavior and to violate their beliefs. At most,

petitioners claim only that they may have been inconvenienced in

their search for an attorney who shares their religious beliefs.5

Rules 24 and 200 did not at any time interfere with petitioners’

observance of their religion. Moreover, none of petitioners’

constitutional rights have been violated. Petitioners

represented themselves pro sese before the Court. They had the

benefit of the advice of their religious adviser, and they had

ample opportunity to have their case heard. See Cupp v.
Commissioner, supra; Ruggere v. Commissioner, 78 T.C. 979, 989

(1982).

Rules 24 and 200 do not violate RFRA’s substantial burden

test. Nevertheless, even if we were to determine that Rules 24

and 200 did substantially burden petitioners’ free exercise of

5
Petitioners are members of both the Church of Jesus Christ of
Latter Day Saints and the First Christian Fellowship of Eternal
Sovereignty. Petitioners have presented no evidence suggesting
that members of the Church of Jesus Christ of Latter Day Saints,
a large and prominent religious denomination, are not represented
in the bar of this Court. Petitioners have introduced into
evidence the Testament of Sovereignty with respect to beliefs of
the First Christian Fellowship of Eternal Sovereignty, but have
failed to show how Rules 24 and 200 interfere with their exercise
of religion as described therein.
 - 9 -
religion, respondent has satisfied the compelling interest test.

2. Compelling Governmental Interest Test

In cases where the claimants’ rights have been substantially

burdened, the Government may impose a substantial burden on the

free exercise of religion if it demonstrates that the application

of the burden (i) is in furtherance of a compelling governmental

interest and (ii) is the least restrictive means of furthering

that compelling interest. 42 U.S.C. sec. 2000bb-1(b); see Miller
v. Commissioner, 114 T.C. 511, 516 (2000). In addition to

holding that Rules 24 and 200 do not violate the substantial

burden test of the RFRA, we conclude that respondent satisfies

the compelling interest and least restrictive means test.

Respondent’s interest in administering the tax system

properly is a compelling governmental interest. See, e.g.,

Hernandez v. Commissioner, 490 U.S. 680, 699-700 (1989)(“[E]ven a

substantial burden would be justified by the ‘broad public

interest in maintaining a sound tax system,’ free of ‘myriad

exceptions flowing from a wide variety of religious beliefs.’”

(quoting United States v. Lee, 455 U.S. 252, 260 (1982))). This

Court has stated:

the Supreme Court has established that uniform,
mandatory participation in the Federal income tax
system, irrespective of religious belief, is a
compelling governmental interest. * * * As a result,
requiring petitioner’s participation in the Federal
income tax system is the only, and thus the least
restrictive, means of furthering the Government’s
interest. * * * [Citations omitted.]

Adams v. Commissioner, supra at 139; see Hernandez v.

Commissioner, supra; United States v. Lee, supra.
 - 10 -
Rules 24 and 200 exist for the protection of the litigants

practicing before the Court and contribute to the fair and

orderly trial of tax matters. Since the Tax Court is an integral

part of the Federal income tax system, the Government has a

compelling interest in the administration of the whole tax

system, including its trials. See United States v. Turnbull, 888

F.2d 636, 640 (9th Cir. 1989) (holding that the Government’s

compelling interest in a fair and orderly trial, in criminal

proceedings relating to a failure to pay Federal income taxes,

outweighed the taxpayer’s wish, contrary to the rules of the

court, to be represented by a lay person who shared his religious

beliefs). We hold that the Government has a compelling interest

in the fair and orderly trials of this Court, which are important

to the maintenance and the administration of a sound tax system.

Rules 24 and 200 are an integral part of the least restrictive

means of achieving that interest. Accordingly, Rules 24 and 200

do not violate RFRA.

B. Remaining Contentions Concerning Jurisdiction
The remaining contentions with respect to jurisdiction

raised by petitioners are shopworn, frivolous assertions that “we

perceive no need to refute * * * 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). Nevertheless, we briefly

address at least some of petitioners’ contentions and dispose of

them expeditiously.
 - 11 -
First, petitioners are taxpayers subject to the Federal

income tax. See secs. 1(c), 7701(a)(1), (14); United States v.

Studley, 783 F.2d 934, 937 (9th Cir. 1986). Their income from

labor or services as reported on their Form W-2 statements and

Forms 1099 constitutes income subject to Federal income tax. See

secs. 1(a)(1), 61(a); Craig v. Commissioner, 119 T.C. 252, 263

(2002).

Second, the United States Tax Court is a legislative court

established under Article I of the United States Constitution.

Sec. 7441. It has jurisdiction to determine the correct amount

of a deficiency. Sec. 6214. The constitutionality of the Tax

Court repeatedly has been upheld on the basis of congressional

authority to create specialized courts under Article I of the

Constitution. Freytag v. Commissioner, 501 U.S. 868, 890-891
(1991); Rowlee v. Commissioner, 80 T.C. 1111, 1114 (1983); Burns,

Stix Friedman & Co. v. Commissioner, 57 T.C. 392, 394 (1971).

Petitioners contend that only a court established under Article

III of the Constitution, rather than a legislative court

established under Article I of the Constitution, can adjudicate

the issues they have raised.6 Petitioners’ arguments have no

6
Petitioners’ reliance on the statutory language of RFRA is
erroneous. RFRA provides:
A person whose religious exercise has been burdened in
violation of this section may assert that violation as
a claim or defense in a judicial proceeding and obtain
appropriate relief against a Government. Standing to
assert a claim or defense under this section shall be
governed by the general rules of standing under article
III of the Constitution.
42 U.S.C. sec. 2000bb-1(c)(emphasis added). RFRA merely applies
the constitutional parameters of “standing” to any alleged
(continued...)
 - 12 -
merit.

Third, it is well established that there is no

constitutional right to a jury trial in a suit concerning Federal

tax liability in the Tax Court. Dawn v. Commissioner, 675 F.2d

1077, 1079 (9th Cir. 1982), affg. T.C. Memo. 1979-479; Rowlee v.

Commissioner, supra; Cupp v. Commissioner, 65 T.C. at 86 (“where

a taxpayer takes advantage of the procedure of filing a petition

in the Tax Court without payment of the tax, any deprivation of a

jury trial is due to his own act”).

For the foregoing reasons, petitioners’ jurisdiction motion

will be denied.

II. Summary Judgment Motion
Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials. Pope & Talbot, Inc., &

Subs. v. Commissioner, 104 T.C. 574, 575 (1995). Rule 121(a)

provides that either party may move with or without supporting

affidavits, for summary judgment upon all or any part of the

legal issues in controversy. Under Rule 121(b) decision shall

thereafter be rendered “if the pleadings, answers to

interrogatories, depositions, admissions, and any other

acceptable materials, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that a

decision may be rendered as a matter of law." See O'Neal v.

6
(...continued)
violation of the statute. The Tax Court clearly has jurisdiction
to hear an RFRA challenge. See, e.g., Adams v. Commissioner, 110
T.C. 137, 138 (1998), affd. 170 F.3d 173 (3d Cir. 1999).
 - 13 -
Commissioner, 102 T.C. 666, 674 (1994) (quoting Kroh v.

Commissioner, 98 T.C. 383, 389 (1992)).

The moving party bears the burden of proving that there is

no genuine issue of material fact, and factual inferences will be

made in a manner most favorable to the party opposing summary

judgment. Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985).

The nonmoving party, however, must do more than merely allege or

deny facts in its pleadings and must “set forth specific facts

showing that there is a genuine issue for trial. If the adverse

party does not so respond, then a decision, if appropriate, may

be entered against such party.” Rule 121(d); FPL Group, Inc. v.
Commissioner, 115 T.C. 554, 559 (2000).

Petitioners assert in their response to the summary judgment

motion that respondent has:

acted in an invidious and/or covert manner * * * to
reduce, restrict and eventually eliminate all God given
rights guaranteed by the Constitution and also
privileges granted by the Constitution specifically or
even generally so the Governments could establish a
civil/socialist/secular/irreligion religion and
Government that are diametrically opposed to
Christianity and Christian liberty as originally
established in the Constitution and Bill of Rights
which are both integral parts of the religions of the
Petitioners. * * * And for all these reasons and more
the Petitioners challenge the appropriateness of
collection actions; and/or existence of amount of the
tax.

Petitioners, through the petition, response to summary judgment

motion, and oral argument, assert the following general issues:

(1) Whether respondent’s adjustments are barred; (2) whether the

alleged deficiencies are in violation of RFRA; (3) whether

petitioners have been denied due process; (4) whether respondent
 - 14 -
filed the summary judgment motion timely; (5) and whether the

representative of respondent has legal authority to act on behalf

of respondent. Petitioners, though, do not present the Court

with any specific facts showing any genuine issue for trial

despite this Court’s express requirement for such a showing. See

Rule 121(d). Petitioners’ repeated assertions of the existence

of questions of fact are insufficient and without foundation, and

we conclude that this case is appropriate for summary judgment.

A. Respondent’s Adjustments Are Sustained
1. Deficiencies

Gross income includes all income from whatever source

derived. Sec. 61(a). Respondent’s determinations in a notice of

deficiency are presumed correct. Welch v. Helvering, 290 U.S.

111, 115 (1933). Petitioners merely allege that respondent’s

determination of deficiencies in, and additions to, tax are

incorrect. The arguments they put forward are frivolous and

without merit.

Petitioners contend that the Individual Master File (IMF)

for each petitioner has incorrect information and that they have

no tax liability. Petitioners’ contentions, however, are blanket

statements, and they provide no support for their bare

allegations that there are genuine issues for trial. Moreover,

petitioners have not produced any information or set forth any

specific facts to contradict the gross income reflected on

petitioners’ W-2 statements and 1099 forms. We hold that there

is no genuine issue as to any material fact.
 - 15 -
2. Additions to Tax Under Sections 6651(a) and 6654(a)

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

file an income tax return. The addition to tax may be avoided if

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

neglect. Sec. 6651(a). “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., and “willful neglect” means a

conscious, intentional failure or reckless indifference, United
States v. Boyle, supra.

Section 6654(a) imposes an addition to tax for failure to

pay estimated tax. The imposition of the addition to tax under

section 6654 as to the years in question is mandatory when an

individual fails to make the required estimated tax payments

unless the petitioner falls within one of the exceptions set

forth in the statute. See sec. 6654(a), (e); Grosshandler v.

Commissioner, 75 T.C. 1, 20-21 (1980).

Petitioners do not offer any explanation that their failure

to file was due to reasonable cause and not willful neglect. The

record demonstrates, rather, that petitioners chose not to file

any returns in pursuit of what can only be regarded as a

religious rights protest against the Federal income tax.

Petitioner Hawkins did not pay any estimated tax during the years

at issue and did not show the applicability of any statutory

exception under section 6654(e). Petitioners have not assigned
 - 16 -
error or provided any statement of fact to dispute respondent’s

determinations with respect to the additions to tax.

Accordingly, respondent is entitled to summary adjudication as to

the additions to tax in question. Rule 34(b)(4), Swain v.

Commissioner, 118 T.C. 358, 364-365 (2002); see also Higbee v.

Commissioner, 116 T.C. 438, 446-447 (2001).

B. The Federal Income Tax Does Not Violate RFRA

The gist of petitioners’ response to the summary judgment

motion, like the arguments made by petitioners in the

jurisdiction motion, is that the Federal income tax violates

RFRA.7 As previously discussed with respect to the jurisdiction

motion, supra p. 9, the uniform mandatory participation in the
Federal income tax system, irrespective of religious belief, is a

compelling governmental interest. Adams v. Commissioner, 110

T.C. 137, 139 (1998) (citing United States v. Lee, 455 U.S. 252,

260 (1982)). Requiring petitioners’ participation in the Federal

income tax system is the only, and thus the least restrictive,

means of furthering the Government’s compelling interest. Adams

v. Commissioner, supra (holding that RFRA does not exempt a

taxpayer from Federal income taxes). Regardless of whether the

7
Specifically, petitioners assert that the Government of the
United States, via respondent, has acted in “an invidious and/or
covert manner to establish a religion and/or restrain the
exercise of our [petitioners’] religion.” Petitioners also
assert that the alleged taxes are an attempt to support religious
activities or institutions and to compel petitioners to engage in
“conduct and/or to refrain from religiously motivated activities
we [petitioners] find objectionable.”
 - 17 -
petitioners’ religious beliefs are substantially burdened, the

Federal income tax system does not violate RFRA.8

C. Remaining Contentions in Response to Summary Judgment Motion

The remaining contentions raised by petitioners in the

response to summary judgment motion are shopworn and frivolous

assertions that do not deserve careful analysis. See Crain v.

Commissioner, 737 F.2d 1417 (5th Cir. 1984).

First, as previously discussed, petitioners’ contention that

RFRA provides for this matter to be heard by an Article III

court, and their argument about their right to a jury trial with

respect to this case are without merit. See supra pp. 10-12.
Second, petitioners have not been denied due process. The

provision of an administrative hearing before the Appeals

division is not essential to the validity of a notice of

deficiency and would have been futile since petitioners did not

dispute the computation or amount of the tax. See Cataldo v.

Commissioner, 60 T.C. 522, 523 (1973), affd. per curiam 499 F.2d

550 (2d Cir. 1974); see also Corcoran v. Commissioner, T.C. Memo.

8
Petitioners contend that the least restrictive means of
furthering the Government’s compelling interest is to simply
“waive” the determined deficiencies in, and additions to, tax.
In support of their argument, petitioners rely on the
unsubstantiated argument that during the previous years 1991,
1993, 1994, and 1995, respondent allegedly did not pursue any
adjustments. Petitioners’ argument, however, must fail because
it is well settled that each taxable year stands on its own and
must be separately considered. Respondent is not bound in any
given year to allow the same treatment permitted in a previous
year. Pekar v. Commissioner, 113 T.C. 158, 166 (1999). The
circumstances of prior years are not relevant, and we consider
only the taxable years at issue before this Court.
 - 18 -
2002-18 (rejecting taxpayer’s due process claims that the notice

of deficiency was invalid and finding that an adminstrative

hearing would have been futile because the taxpayers never

disputed the actual amounts of the tax), affd. 54 Fed. Appx. 254

(9th Cir. 2002). The applicable provisions of the statute and

regulations are clear, and petitioners have no basis to assert

that they have been deprived of due process because their

inquiries about requirements that they keep books and file tax

returns allegedly have gone unanswered by the Internal Revenue

Service. See secs. 6001, 6011(a); secs. 1.6001-1(a), 1.6011-1,

Income Tax Regs. Petitioners are not denied due process simply

because they are not in an article III court. See supra p. 11.

Third, respondent timely filed the summary judgment motion.

Rule 121(a) states that a motion for summary judgment “may be

made at any time commencing 30 days after the pleadings are

closed”. Respondent filed the Answer on October 12, 2001, and

the summary judgment motion more than 5 months later on March 15,

2002. The pleadings in this case were closed long before

respondent filed the summary judgment motion. See Rules 34, 36,

37, 38, 121.

Fourth, petitioners’ contentions at the hearing that

respondent’s representative who prepared and issued the notices

of deficiency lacked the legal authority to act in the name of

respondent and petitioners’ requiring proof of the delegation of

authority from respondent are frivolous and without merit.
 - 19 -
See Nestor v. Commissioner, 118 T.C. 162, 165 (2002).

In the absence of any valid issue for review, and for the

foregoing reasons, we conclude that respondent is entitled to

judgment as a matter of law sustaining each notice of deficiency

issued to petitioners.

III. Penalty Motion

Section 6673(a)(1) authorizes this 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. A position maintained by the taxpayer is “frivolous”

where it is “contrary to established law and unsupported by a

reasoned, colorable argument for change in the law.” Williams v.

Commissioner, 114 T.C. 136, 144 (2000) (quoting Coleman v.

Commissioner, 791 F.2d 68, 71 (7th Cir. 1986)). This proceeding

was petitioners’ first appearance before this Court. Respondent

first raised the penalty motion at the hearing. In view of the

circumstances of this case and the nature of petitioners’ RFRA

arguments, we shall deny respondent’s motion and we shall not

impose the penalty. Nevertheless, we place petitioners on notice

that if petitioners institute or maintain a proceeding with

frivolous arguments in the future, this Court may impose such a

penalty.
 - 20 -
We have considered all of petitioners’ arguments and

contentions, and, to the extent not discussed above, conclude

they are irrelevant and/or without merit.

To reflect the foregoing,

An Appropriate Order and

Decision Will Be Entered.