T.C. Summary Opinion 2017-53
UNITED STATES TAX COURT
MARK S. SIEGEL, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 2009-16S. Filed July 17, 2017.
Mark S. Siegel, pro se.
Eric O. Young, for respondent.
SUMMARY OPINION
GERBER, Judge: This case was heard pursuant to the provisions of section
7463 of the Internal Revenue Code in effect when the petition was filed.1
1
Unless otherwise indicated, all section references are to the Internal
Revenue Code in effect for the year in issue.
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Pursuant to section 7463(b), the decision to be entered is not reviewable by any
other court, and this opinion shall not be treated as precedent for any other case.
Respondent determined an $11,637 income tax deficiency and additions to
tax for failure to timely file, failure to pay timely, and failure to pay estimated tax
for petitioner’s 2012 tax year, as follows:
Additions to tax
Sec. 6651(a)(1) Sec. 6651(a)(2) Sec. 6654
$2,618.33 $1,687.37 $208.64
Petitioner does not dispute that he received the income on which the deficiency is
based and that he did not timely file a return or pay tax or make estimated tax
payments. Instead, petitioner contends that he is not liable for income tax. The
issue for our consideration is whether petitioner is liable for Federal income tax.
Background
Petitioner resided in Florida when his petition was filed. He did not file a
2012 Form 1040, U.S. Individual Income Tax Return, before respondent issued
the notice of deficiency on October 26, 2015. During 2012 petitioner received $28
of interest income and $50,789 of self-employment income, and he made no
payments toward his 2012 income tax liability. Petitioner believes that he is not
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legally obligated to pay tax. His belief is based on his personal research of the tax
laws and cases.
Discussion2
Respondent has characterized petitioner as a tax protester and further
contends that his position is frivolous. Respondent stated an intention to move for
a section 6673 penalty, but he made no formal motion. Petitioner believes and
contends that “there is no statute which plainly and clearly lays liability for the tax
on * * * [him] for that year 2012.” He argues that the tax liability “must be plainly
and clearly * * * [stated] and any ambiguity must be resolved against the
Government.” Petitioner notes that the “Internal Revenue Code contains over 3.4
million words, most of which are incomprehensible to average Americans.”
In general, petitioner’s premises are based on his research in which various
courts have stated that “strict construction applies to issues of not only what is
taxed, and how the amount of tax is calculated, but to who is liable for its payment
as well * * * [and] in statutes levying taxes, the literal meaning of the words
employed is most important”. Petitioner contends that a “search of the Internal
Revenue Code reveals many references to liability, and every single tax in the
2
No issues were raised by the parties concerning the burden of proof or
production.
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Code has a specific section usually titled Liability for Tax, or Persons Liable, that
clearly and plainly identifies all those who are liable for that particular tax.” He
concludes: “[N]owhere in any of the dozens of sections in the Code can be found
* * * [a] statute or law that plainly and clearly imposes liability for the Federal
income tax on the average American worker.”
Petitioner cites numerous example of specific text such as: section 4401,
which levies a tax on each person who is engaged in the business of accepting
wagers; section 4972, tax on contributions to qualified employer pension plans
imposing a tax on “the employer making the contributions”; and section 5703,
excise tax on manufactured tobacco products stating that manufacturers and
importers of tobacco products “shall be liable for the taxes imposed” by this
section.
The sections petitioner cites involve excise taxes. When asked whether any
income tax sections have similar text, petitioner indicated that section 1461
“makes the withholding [tax] agent for non-resident aliens and foreign
corporations liable for the income tax.” In essence, petitioner’s argument is that
there is no specific provision directing him to pay or stating that he is liable for
income tax. When asked what particular words should be included in an income
tax statute that would make him liable, petitioner was unable to provide any
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examples; and he reiterated that the existing income tax statutes are ambiguous
and not sufficiently direct to cause his liability or require his payment of tax.
However, he contends that calling an individual a “taxpayer” does not make him
or her liable for the tax.
Petitioner has been formulating his position with respect to the income tax
laws over a period of years on the basis of his personal research. Each time he
approaches respondent with his ideas, his position is perfunctorily labeled
“frivolous” and he receives no response. Petitioner believes that average
American citizens should be able to question their Government about the tax laws,
and he refuses to give up merely because he did not receive a response to his
questions.
Initially, respondent counters petitioner’s position by stating that section
1(c) imposes a tax on the taxable income of every individual. Respondent
continues that section 6012 requires that a return “shall be made by” every
individual having gross income which equals or exceeds the exemption amount.
Finally, section 61(a) provides that “gross income means all income from
whatever source derived” and then it goes on to provide examples of income.
Respondent cited the following cases in his pretrial memorandum: Commissioner
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v. Glenshaw Glass Co., 348 U.S. 426 (1955) and Reading v. Commissioner, 70
T.C. 730, 733-734 (1978), aff’d per curiam, 614 F.2d 159 (8th Cir. 1980).
Petitioner, however, continues to argue that the law is ambiguous and that
an individual is not necessarily a taxpayer and makes other similar sophistical
semantic distinctions. His arguments derive from analyses lifted out of context
from Supreme Court cases generally involving excise tax. One such case, United
States v. Calamaro, 354 U.S. 351, 351 (1957) (the most current of the cases he
references) involved “whether the * * * [defendant], a so-called ‘pick-up man’ in a
type of lottery called the ‘numbers game,’ is subject to the annual $50 special
occupational tax enacted by Subchapter B of Chapter 27A (Wagering Taxes) of
the Internal Revenue Code of 1939, 65 Stat. 530, 26 U.S.C. § 3285 et seq.” The
Supreme Court held that the words of the statute did not include a “pick-up man”
and that the Government’s attempt to include such individuals was overreach. Id.
at 356-357. In reaching its conclusion, the Court relied on the plain language of
the statute. Petitioner interprets that case to require Congress to specifically
designate individuals and to specifically require them to pay tax.
More than 100 years of tax jurisprudence refute petitioner’s position that he
is not a taxpayer who is required to file a return and/or pay tax. We quote the
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apropos language of this Court in Reading v. Commissioner, 70 T.C. at 733, as
follows:
It is difficult, if not impossible, to respond to arguments such as
petitioners have put forth without becoming embroiled in a game of
semantics. The logical force requiring rejection of their arguments--
apart from their assertions of personal political philosophy which do
not provide a basis for us, a Court sitting to interpret the law, to
decide the questions dispositive of this case--is essentially a matter of
the definition of terms. Thus, should we hold that “gain” is an
essential element of income, compare Conner v. United States, 303 F.
Supp. 1187 (S.D. Tex. 1969), affd., revd., and remanded 439 F.2d 934
(5th Cir. 1971), with McGuire v. United States, an unreported case
(N.D. Cal. 1970, 25 AFTR2d 1127, 70-1 USTC par. 9384), we would
still face the problem of defining what constitutes “gain.” Compare
Conner v. United States, supra, with McCabe v. Commissioner, 54
T.C. 1745, 1748 (1970). It is in situations like this that one can truly
admire the wisdom of Mr. Justice Holmes, in particular, as he
expressed in United States v. Kirby Lumber Co., 284 U.S. 1 (1931),
“We see nothing to be gained by the discussion of judicial
definitions.” [Fn. ref. omitted.]
Petitioner has not made his argument in Court before. He admits receiving
the income, failing to file a return and to pay tax timely, and failing to make
estimated payments of tax. He was forewarned that he could be subject to a
penalty under section 6673 if he instituted or maintained this proceeding primarily
for delay or if his position is frivolous or groundless. In spite of the warning,
petitioner wanted his day in court and an opportunity to present the arguments that
respondent had summarily rejected. We believe that petitioner’s research,
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concerns, and intentions were not to delay and that he honestly presented them
because he believed it was his right as a citizen.
Petitioner has been given an opportunity to present his position in court, and
we hold that it is without support in the cases or statutes proffered. We hold that
respondent’s determination was not in error and that petitioner is liable for the
income tax deficiency and section 6651 and 6654 additions to tax as determined.
We caution petitioner that future advancement of this or similar arguments may
well result in penalties of up to $25,000 under section 6673.
To reflect the foregoing,
Decision will be entered for
respondent.