T.C. Memo. 2007-259
UNITED STATES TAX COURT
GLENDA M. WIPPERFURTH, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8834-04. Filed August 29, 2007.
Glenda M. Wipperfurth, pro se.
Mark J. Miller, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
GALE, Judge: Respondent determined the following
deficiencies in, and additions to, petitioner’s Federal income
taxes:
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Addition to Tax Under
Year Deficiency Sec. 6651(a)(1)
2001 $1,759 $399.75
2002 1,511 369.50
Unless otherwise noted, all section references are to the
Internal Revenue Code of 1986, as in effect for the years in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
We must decide the following issues: (1) Whether petitioner
had unreported income in 2001 and 2002, as determined by
respondent; (2) whether petitioner is liable for additions to tax
under section 6651(a)(1) for those years; and (3) whether
petitioner is liable for a penalty under section 6673(a)(1).
FINDINGS OF FACT
Certain matters were deemed stipulated for purposes of this
case pursuant to Rule 91(f). At the time the petition was filed,
petitioner resided in Wisconsin.
During 2001 and 2002, petitioner worked at a casino operated
by the Oneida Tribe of Wisconsin and received amounts treated as
wages by the Oneida Tribe of $20,317 and $17,259 in 2001 and
2002, respectively. The Oneida Tribe of Wisconsin issued to
petitioner Forms W-2, Wage and Tax Statement, reporting the
foregoing amounts as wages in the respective years. In 2001,
petitioner received interest of $10 and a dividend of $90 from
the AAL Member Credit Union. In 2002, petitioner received a
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payment of $1,734 on account of disability from Metlife Agent.
Respondent’s records do not reflect the filing of Federal
income tax returns for 2001 and 2002 by petitioner.
Respondent determined that petitioner had unreported income
in the aforementioned amounts for 2001 and 2002, as well as
additions to tax under section 6651(a)(1) for failing to file
returns for each of those years.
OPINION
Unreported Income
Petitioner’s admissions at trial, the deemed stipulations,
and/or respondent’s evidence establish that petitioner received
the income determined by respondent in 2001 and 2002, as outlined
in our findings of fact. Her arguments that this income was not
taxable are frivolous tax protester arguments that we need not
“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) (per curiam). Accordingly, the deficiencies
determined by respondent are sustained.
Section 6651(a)(1) Additions to Tax
Under section 7491(c), respondent has the burden of
production with respect to petitioner’s liability for the section
6651(a)(1) additions to tax. In order to meet that burden,
respondent must offer sufficient evidence to indicate that it is
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appropriate to impose the relevant penalty. Higbee v.
Commissioner, 116 T.C. 438, 446 (2001). Once the Commissioner
meets his burden of production, the taxpayer bears the burden of
proving error in the determination, including evidence of
reasonable cause or other exculpatory factors. Id. at 446-447.
Section 6651(a)(1) provides for an addition to tax for a
taxpayer’s failure to file a required return on or before the due
date, including extensions. Respondent introduced certified
transcripts of account which show no record of Federal income tax
returns filed by petitioner for 2001 and 2002, as well as copies
of Forms W-2 reporting petitioner’s wage income from the Oneida
Tribe of Wisconsin and certified copies of payroll records
documenting petitioner’s employment and compensation at the
Oneida Tribe casino in the relevant years. This income obligated
petitioner to file Federal income tax returns in each year. See
sec. 6012. Accordingly, we conclude that respondent met his
burden of production under section 7491(c).
Petitioner contends that she filed returns for 2001 and 2002
and offered into evidence what she claimed were copies of the
returns filed. Even if we accepted petitioner's somewhat dubious
claim of having filed these documents with the intent that they
be accepted as returns,1 neither would qualify as such. The
1
The first page of each purported return is a Form 4868,
Application for Automatic Extension of Time To File U.S.
(continued...)
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purported return for 2001 is unsigned, and the purported return
for 2002 contains only zeros in the entries for income. Neither
constitutes a return for purposes of section 6651(a)(1). See
United States v. Moore, 627 F.2d 830, 835 (7th Cir. 1980);
Cabirac v. Commissioner, 120 T.C. 163, 168-170 (2003); Thompson
v. Commissioner, 78 T.C. 558, 562-563 (1982); Vaira v.
Commissioner, 52 T.C. 986, 1004-1005 (1969), revd. on other
grounds 444 F.2d 770 (3d Cir. 1971).
We conclude that petitioner did not file returns in 2001 or
2002 for purposes of section 6651(a)(1). As petitioner has
produced no evidence that she had reasonable cause for her
failure to file, we sustain respondent’s determination that
petitioner is liable for additions to tax under section
6651(a)(1) for 2001 and 2002.
Section 6673 Penalty
Respondent has moved for a penalty under section 6673(a)(1).
Whenever it appears to the Court that proceedings have been
instituted or maintained primarily for delay or the taxpayer’s
position in such proceedings is frivolous or groundless, the
Court may require the taxpayer to pay a penalty not in excess of
$25,000. Sec. 6673(a)(1).
1
(...continued)
Individual Income Tax Return, followed by a partially filled out
Form 1040, U.S. Individual Income Tax Return. Thus, on its face
each document appears to be a request for an extension rather
than a return.
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The instant case falls squarely into this category.
Petitioner presented no evidence in support of her position.
Instead, she advanced numerous frivolous tax protester arguments.
Petitioner was warned by the Court, in a pretrial order, that the
arguments she had been advancing were frivolous or groundless and
could cause her to be subject to penalties under section 6673.
Nevertheless, petitioner continued to advance such arguments.
At trial, petitioner filed a frivolous “Motion to Dismiss
for Lack of Subject Matter Jurisdiction”. This motion was
essentially identical to a motion filed by her in a previous case
in this Court, at docket No. 11488-03, which was found frivolous
by the Court in that proceeding. Respondent also moved for a
section 6673 penalty in the case at docket No. 11488-03, although
the Court elected not to impose any penalty. Petitioner’s
persistence in filing the same motion in the instant case
evidenced bad faith. In addition, petitioner issued a subpoena
to one of respondent’s agents, who had no connection with the
years at issue in this case, which made it necessary for
respondent to prepare a motion to quash. The Court quashed the
subpoena as frivolous. Finally, petitioner unreasonably refused
to stipulate matters not fairly in dispute, in violation of Rule
91.
Considered together, petitioner’s actions constitute a
significant waste of the time and resources of this Court and of
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respondent. Petitioner has persisted in this course of conduct
in a manner which evidences bad faith. It is clear that mere
warnings have had no impact in deterring her. Consequently, the
Court will exercise its discretion to impose a penalty pursuant
to section 6673(a)(1) that is designed to be significant in light
of petitioner’s apparent financial circumstances. We shall
impose a penalty of $2,500.
To reflect the foregoing,
An appropriate order and
decision will be entered.