Green v. Comm'r

T.C. Memo. 2007-262

UNITED STATES TAX COURT

JOHN O. GREEN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 3885-05. Filed August 30, 2007.

John O. Green, pro se.

W. Lance Stodghill, for respondent.

MEMORANDUM OPINION

HALPERN, Judge: Respondent has determined a deficiency in,

and additions to, petitioner’s 2001 Federal income tax as

follows:

Additions to Tax
Deficiency Sec. 6651(a)(1) Sec. 6651(a)(2) Sec. 6654(a)
$8,624 $1,861.42 $1,199.58 $325.82
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Unless otherwise indicated, all section references are to

the Internal Revenue Code of 1986, as amended and in effect for

2001, and all Rule references are to the Tax Court Rules of

Practice and Procedure.

Respondent concedes the section 6651(a)(2) addition to tax

of $1,199.58, and we accept that concession. Petitioner’s

principal defense to the deficiency and the remaining additions

to tax is that the Court lacks jurisdiction to hear this case.

If we should decide that issue adversely to him, petitioner’s

fallback position is that no “presumption of correctness”

attaches to respondent’s determinations. Petitioner also

disputes the remaining additions to tax.

Background

This case was called from the calendar of the Court at the

commencement of the Court’s trial session beginning at 10 a.m. on

December 12, 2005, in the Casey U.S. Courthouse, 515 Rusk Ave.,

Houston, Texas. It was set for trial at 2 p.m. on that day. At

the call of the calendar, we received and filed petitioner’s

motion to dismiss for lack of jurisdiction (the motion to

dismiss). The motion to dismiss consists of some 15 pages, and

it is supported by 10 exhibits, consisting of an additional 27

pages. At the start of the trial, we received respondent’s oral

objection to the motion to dismiss. We denied the motion to

dismiss, informing petitioner that we were doing so because we
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had not had adequate time to address the motion before trial. We

invited petitioner to offer during the trial any evidence that

supported his claim that we lacked jurisdiction and to argue the

merits of the claim on brief. Petitioner rested his case without

testifying, calling any witnesses, or offering any evidence at

all.

Respondent called no witnesses but did offer into evidence

certified transcripts of account of the Forms 1040, U.S.

Individual Income Tax Return for petitioner for his tax years

ending December 31, 2000 and 2001 (the transcripts of account).

The Court overruled petitioner’s relevancy objections and

instructed the parties to address on brief petitioner’s argument

that the transcripts of account had not been shown to be

authentic because, although they were accompanied by certificates

under seal and signed (the certificates), the certificates did

not bear any date.

Petitioner filed a petition and an amended petition. At the

time he filed the amended petition, petitioner’s mailing address

was in Spring, Texas. Petitioner, although proceeding pro se, is

an attorney admitted to practice before this court.

Attached to the petition is a copy of what petitioner

describes in the petition as an “alleged” notice issued by the

Internal Revenue Service (IRS) for 2001. The attachment is a

two-page letter dated November 29, 2004 (the November 29 letter),
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addressed to petitioner, stating that it is a notice of

deficiency, and setting forth (1) a deficiency in income tax of

$8,624 for 2001 and (2) additions to tax for that year of

$1,861.42 under section 6651(a)(1), $1,199.58 under section

6651(a)(2), and $325.82 under section 6654(a). The November 29

letter is signed by Lynne Walsh, Field Director, Compliance

Services, Brookhaven Service Center.

Attached to the amended petition as exhibit A is a document

that consists of the first page of the November 29 letter and

four additional pages (the four additional pages), including a

two-page “Tax Calculation Summary”. That summary shows, among

other things, how the $8,624 deficiency in income tax was

calculated, that petitioner was classified as a “non-filer”, and

the sources, kinds, and amounts of income that were reported to

the IRS by payers and taken into account by it in determining

petitioner’s income and the deficiency. Those sources and the

associated kinds and amounts of income are as follows: (1) Texas

Department of Criminal Justice, wages, $21,475; (2) Bloodworth &

Green, from Schedule K-1, Partner’s Share of Income, Deductions,

Credits, etc., $26,723; and (3) Harris County Federal Credit

Union, interest, $138. Hereafter, we shall use the term “notice”

to refer collectively to the November 29 letter and the four

additional pages.
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Discussion

I. Introduction

Although in the petition and amended petition petitioner

assigns numerous errors to respondent’s determinations and makes

various averments in support thereof, on brief petitioner states

the nature of the controversy between him and respondent to be

the jurisdiction of the Court “on the points raised in

Petitioner’s Motion to Dismiss.” He describes the issues to be

decided as whether (1) “the Court has jurisdiction to decide this

matter” (we assume respondent’s determinations), and (2) if we

determine we do have jurisdiction, respondent has “lost the

presumption of correctness.” He also claims that he is not

liable for the remaining additions to tax. We shall address

those issues. We deem petitioner to have abandoned any other

errors he assigned. See Mendes v. Commissioner, 121 T.C. 308,

312-313 (2003) (“If an argument is not pursued on brief, we may

conclude that it has been abandoned.”).

II. Jurisdiction

A. Introduction

We have subject matter jurisdiction to redetermine a

deficiency if the Commissioner has issued a valid notice of

deficiency and the taxpayer has timely filed a petition. Secs.

6212 and 6213; Rules 13, 20; e.g., Monge v. Commissioner, 93 T.C.

22, 27 (1989). Because petitioner timely filed the petition,
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the sole jurisdictional issue is whether respondent issued a

valid notice of deficiency. Petitioner has presented no evidence

that the notice is invalid, and, as set forth below, petitioner’s

attacks on the notice are without merit. Contrary to the order

of the Court, petitioner did not file an opening brief.

Respondent did file an opening brief, and, in that brief, he

addresses the arguments that he believes were clearly raised by

petitioner. Petitioner filed an answering brief, and, in that

brief, directed his arguments to the points respondent raised.

We assume that those points define the dispute between the

parties. See Mendes v. Commissioner, supra.

B. The Legal Sufficiency of the Notice

Petitioner contests the sufficiency of the notice. For the

Secretary to issue a notice of deficiency, section 6212 requires

that he determine a deficiency, send notice of that deficiency to

the taxpayer’s last known address, include with that notice

notice of the taxpayer’s right to contact the local office of the

taxpayer advocate, and provide the taxpayer with contact

information for that office. Section 7522(a) provides that the

notice of deficiency “shall describe the basis for, and identify

the amounts (if any) of, the tax due, interest, additional

amounts, additions to the tax, and assessable penalties included

in such notice.” The section further provides: “An inadequate

description under the preceding sentence shall not invalidate
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such notice.” We have said: “‘[T]he notice is only to advise

the person who is to pay the deficiency that the Commissioner

means to assess him; anything that does this unequivocally is

good enough.’” Jarvis v. Commissioner, 78 T.C. 646, 655-656

(1982) (quoting Olsen v. Helvering, 88 F.2d 650, 651 (2d Cir.

1937)). We have examined the notice, and we find that it is

sufficient.

C. Return Requirement

Petitioner insists that a deficiency in tax can be

determined only on the basis of a return of tax (either made by

the taxpayer or prepared by the Secretary. See sec. 6020(b).).

Petitioner is wrong. No return is necessary to determine a

deficiency. E.g., Roat v. Commissioner, 847 F.2d 1379, 1381-1382

(9th Cir. 1988); Clark v. Campbell, 501 F.2d 108, 117 (5th Cir.

1974) (“the Service may determine a deficiency in the absence of

a return”).

D. Authority To Sign the Notice

Petitioner challenges the authority of Lynne Walsh to sign

the November 29 letter. It is well settled that the Secretary or

his delegate may issue notices of deficiency. Secs. 6212(a),

7701(a)(11)(B) and (12)(A)(i) (allowing redelegations of that

authority); e.g., Everman v. Commissioner, T.C. Memo. 2003-137.

Delegation Order 4-8, set forth at Internal Revenue Manual (IRM)

sec. 1.2.43.2, delegates authority to issue notices of deficiency
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to, among others, “Wage & Investment * * * Directors: * * * Field

Compliance Services”. Lynne Walsh, Field Director, Compliance

Services, Brookhaven Service Center, was a proper delegate of the

Secretary to issue (sign) the notice. Furthermore, there is no

requirement that a notice of deficiency be signed. E.g., Pendola

v. Commissioner, 50 T.C. 509, 513-514 (1968).

E. Withdrawal of the Notice

Petitioner argues that the notice was withdrawn “because it

was processed in error”. To support that claim, petitioner asks

the Court to examine entries in a transcript of his individual

master file (the transcript or the IMF, as appropriate) that he

states he obtained from the IRS pursuant to a Freedom of

Information Act request. Although respondent describes the

transcript as an unauthenticated document that petitioner failed

to introduce into evidence, he meets petitioner’s argument with

respect to the transcript head on. We assume, therefore, that

respondent accepts the authenticity of the transcript and has

waived his argument that petitioner did not introduce it into

evidence.

An IMF is a file maintained by the IRS that contains coded

information relevant to the tax status of an individual. United

States v. Buford, 889 F.2d 1406, 1407 n.1 (5th Cir. 1989). In

order to decipher the coded information, a code book is needed.

Id. at 1407. There appear to be two relevant entries on the
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transcript: (1) Code 494, “90 Day Statutory Notice of Deficiency

Issued”, processing date: Nov. 16, 2004, and (2) code 495, “90

Day Notice Processed in Error”, processing date: Mar. 14, 2005.

Petitioner has failed to provide us with a code book to interpret

those entries. Nevertheless, petitioner argues that the purpose

of the second entry “is patently clear – the purported notice of

deficiency was withdrawn because it was ‘processed in error’”.

Respondent argues that petitioner misunderstands the coded

entries and their shorthand explanations. Respondent argues:

The Transaction Code Pocket Guide, Document 11734 (Rev.
6-2004), more fully describes TC 495 as “Closure of TC
4942 or correction of TC 494 processed in error.”
Hence, TC 495 is not used solely to withdraw a notice
processed in error. Indeed, IRM sec. 4.19.2.2.15(3)(b)
instructs tax examiners to utilize TC 495 to reverse TC
494 prior to routing newly docketed Tax Court cases to
the Appeals Function. Thus, the presence of TC 495
does not mean that a notice of deficiency has been
withdrawn.
2
Transaction Code 494 denotes the issuance of a
notice of deficiency. See Transactions Code Pocket
Guide, Document 11734 (Rev. 6-2004).

We accept that an IMF contains coded information. Without

evidence as to the meaning of that information, however, we are

unable to find that the entry petitioner relies on indicates that

the notice was withdrawn. Petitioner bears the burden of proof.

See Rule 142(a). Petitioner declined to offer any evidence.

Petitioner has failed to carry his burden of proving that the

notice was withdrawn.
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Finally, petitioner has cited no authority that a notice of

deficiency can be withdrawn. The Internal Revenue Code allows

for a notice of deficiency to be rescinded in certain limited

circumstances. See sec. 6212(d). None of the circumstances

apply in this case.

III. Presumption of Correctness

We often state as a general rule that the Commissioner’s

determination set forth in a notice of deficiency is presumed

correct. E.g., Rozzano v. Commissioner, T.C. Memo. 2007-177. On

brief, petitioner argues that the usual presumption of

correctness is overcome in this case because “the evidence is

unmistakably clear; the purported Notice of Deficiency was

‘processed in error’”. Petitioner cites no authority in support

of that argument; moreover, petitioner’s claim is fatally

weakened by the same interpretive difficulty concerning the

“processed in error” language that undermines his claim that the

notice was withdrawn. Petitioner has failed to show that the

usual presumption does not attach to the determinations in the

notice.

IV. Additions to Tax

A. Section 6651(a)(1)

Section 6651(a)(1) provides for an addition to tax in the

event a taxpayer fails to file a timely return (determined with

regard to any extension of time for filing), unless it is shown
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that such failure is due to reasonable cause and not due to

willful neglect. The amount of the addition is equal to 5

percent of the amount required to be shown as tax on the

delinquent return for each month or fraction thereof during which

the return remains delinquent, up to a maximum addition of 25

percent for returns more than 4 months delinquent.

B. Section 6654

Section 6654 provides for an addition to tax in the event of

an underpayment of a required installment of individual estimated

tax. Sec. 6654(a) and (b). Each required installment is equal

to 25 percent of the “required annual payment”, which, in turn,

is equal to the lesser of (1) 90 percent of the tax shown on the

individual’s return for that year or, if no return is filed, 90

percent of his or her tax for such year, or (2) if the individual

filed a return for the immediately preceding taxable year, 100

percent of the tax shown on that return. Sec. 6654(d)(1)(A) and

(B)(i) and (ii). The due dates of the required installments for

a calendar taxable year are April 15, June 15, and September 15

of that year and January 15 of the following year. Sec.

6654(c)(2). An individual’s tax, for purposes of section 6654,

consists of income and self-employment tax determined before the

application of any wage withholding credits which, under section

6654(g)(1), are treated as payment of estimated tax. See sec.

6654(f). Section 6654(e) provides certain specified exceptions
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to the applicability of section 6654, none of which cover

petitioner.

C. Transcripts of Account

Respondent asks us to find from the transcripts of account

that petitioner did not file an income tax return for 2001, he

made no estimated tax payments for that year, and, ultimately, he

is liable for the section 6651(a)(1) and 6654 additions to tax

respondent determined. Petitioner objects to the receipt of the

transcripts of account into evidence on the ground that

respondent failed to properly authenticate them, since the

certificates accompanying them were not dated.

Domestic public records under seal are self-authenticating

pursuant to rule 902(1) of the Federal Rules of Evidence, and

that rule has no requirement that a date accompany the seal and

signature required by the rule. Petitioner offered no authority

to the contrary, and we have found none. We accept the

transcripts of account as authentic.

D. Burden of Production

Respondent bears the burden of production with respect to

the section 6651(a)(1) and 6654 additions to tax. See sec.

7491(c). In order to carry that burden, respondent must produce

sufficient evidence establishing that it is appropriate to impose

the additions. See Higbee v. Commissioner, 116 T.C. 438, 446-447

(2001). Once respondent has done so, the burden of proof is upon
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petitioner to show that respondent’s determination of the

additions is incorrect. See id. at 447.

By the petition and the amended petition, petitioner as much

as concedes that he filed no return for 2001. The transcript of

account confirms that he filed no return for 2001, and we so

find. Respondent has carried his burden of production, and

petitioner has failed to prove that respondent’s determination of

the section 6651(a)(1) addition to tax is incorrect. The

transcripts of account also show that petitioner made no payments

of estimated tax for 2001 and filed no return for 2000, and we so

find. Respondent has carried his burden of production, and

petitioner has failed to prove that respondent’s determination of

the section 6654 addition to tax is incorrect.

V. Section 6673(a)(1) Penalty

In pertinent part, section 6673(a)(1) provides a penalty of

up to $25,000 if the taxpayer has instituted or maintained

proceedings before the Tax Court primarily for delay or the

taxpayer’s position in the proceeding is frivolous or groundless.

“The purpose of section 6673 is to compel taxpayers to think and

to conform their conduct to settled principles before they file

returns and litigate.” Takaba v. Commissioner, 119 T.C. 285, 295

(2002). “A taxpayer’s position is frivolous ‘if it is contrary

to established law and unsupported by a reasoned, colorable

argument for [a] change in the law.’” Id. at 287 (quoting
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Coleman v. Commissioner, 791 F.2d 68, 71 (7th Cir. 1986)). “‘The

inquiry is objective. If a person should have known that his

position is groundless, a court may and should impose

sanctions.’” Id.

Petitioner is a lawyer, admitted to practice before this

court. Nevertheless, his filings are studded with frivolous

arguments and groundless claims, mostly abandoned in favor of his

unsuccessful defense that we lack jurisdiction in this case. For

instance, in the petition, he makes the following claims: He is

a nonresident alien; he is not a citizen or resident of the

United States; he has no income subject to taxation by the United

States, and he has not withheld any moneys on behalf of any

Federal entity, resident, nonresident person, or entity. He adds

that, if the United States proved that the source of his income

was from a domestic corporation of the United States or is

otherwise directly connected to doing business in the United

States, then, since that would be new knowledge to him, it would

warrant abatement of the penalty and interest on the tax due. He

claims that the Secretary failed to notify him

that he was the recipient of “federal income” from a
“U.S. Corporation” that was synonymous in scope to the
“United States” [See 28 U.S.C. sec. 3002(15) (2000).]
and, therefore, petitioner would be compelled to
acknowledge that a “RETURN” of that income is required
under the local laws of the District of Columbia, the
IRC approved August 16, 1954, re-designated the IRC of
1986.
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Attached to petitioner’s declaration in support of the

motion to dismiss is a copy of what he describes as a sworn

statement that he sent to respondent on September 21, 2004,

“rebutting purported ‘wage’ and ‘income’ assertions” by

respondent. In that statement, petitioner claims among other

things: “I am a non-resident alien of the United States. I am a

citizen and resident of the State of Texas”. Also: “Since I am

a non-resident alien of the United States, and the ‘Texas

Department of Criminal Justice’ is not a federal entity or an

entity who’s situs is within a federal possession or territory,

the money I may have received from this ‘PAYER’, as wages are not

taxable income per the ‘IRC’.”

In the amended petition, petitioner makes additional,

frivolous arguments and groundless claims; e.g., he is not

required to file an income tax return because the form does not

contain an Office of Management and Budget number, which

petitioner believes is required on the form. That is a familiar

tax-protester argument rejected out of hand by the courts. See,

e.g., United States v. Kerwin, 945 F.2d 92 (5th Cir. 1991);

McDougall v. Commissioner, T.C. Memo. 1992-683, affd. without

published opinion 15 F.3d 1087 (9th Cir. 1993).

Petitioner has made frivolous arguments and groundless

claims, and we can see no purpose for those arguments and claims

other than to delay respondent’s collection of taxes due and
 - 16 -

owing. On the premises stated, we shall require petitioner to

pay a penalty to the United States pursuant to section 6673(a)(1)

of $2,500.

VI. Conclusion

Taking into account respondent’s concession of the section

6651(a)(2) addition to tax,

An appropriate order

and decision will be entered.