T.C. Memo. 2013-58
UNITED STATES TAX COURT
MICHAEL BURT, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16542-10. Filed February 25, 2013.
Michael Burt, pro se.
A. Gary Begun, for respondent.
MEMORANDUM OPINION
CHIECHI, Judge: This case is before us on respondent’s motion for
summary judgment (respondent’s motion).1 We shall grant respondent’s motion.
1
Respondent filed a motion for entry of decision. By Order dated January 11,
2013, we recharacterized that motion as a motion for summary judgment and
recharacterized petitioner’s response to respondent’s motion for entry of decision
(continued...)
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[*2] Background
The record establishes and/or the parties do not dispute the following.
Petitioner resided in Michigan at the time he filed the petition.
On November 14, 2006, a Federal grand jury for the U.S. District Court for
the Eastern District of Michigan returned a four-count indictment (indictment)
against petitioner. In that indictment, petitioner was charged with violating
section 72012 by willfully attempting to evade and defeat Federal income tax (tax)
for each of the years 1998 through 2001. The indictment charged that petitioner
had the following unreported taxable income and unpaid tax liabilities for those
years:
Unreported Unpaid
Year taxable income tax liability
1998 $49,263 $21,146
1999 55,400 23,478
2000 64,462 26,745
2001 90,394 34,452
1
(...continued)
as petitioner’s response to respondent’s motion for summary judgment (petitioner’s
response).
2
All section references are to the Internal Revenue Code (Code) in effect for
the years at issue. All Rule references are to the Tax Court Rules of Practice and
Procedure.
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[*3] On May 22, 2008, after a trial in the U.S. District Court (criminal
proceeding), a jury found petitioner guilty on all counts in the indictment. The U.S.
District Court sentenced petitioner, inter alia, to 27 months’ imprisonment with
two years of supervised release.
On December 5, 2008, petitioner appealed his conviction to the U.S. Court
of Appeals for the Sixth Circuit. On June 4, 2010, the Court of Appeals affirmed
petitioner’s conviction.
On April 23, 2010, respondent issued a notice of deficiency (notice) to
petitioner. In that notice, respondent determined the following deficiencies in,
additions to, and fraud penalties on petitioner’s tax for petitioner’s taxable years
1998 through 2002:3
Additions to tax under secs. Penalty
under sec.
Year Deficiency 6651(a)(1) 6651(a)(2) 6651(f) 6654(a) 6663(a)
1998 $33,879 $8,470 --- --- --- $25,409
1999 1,606 (196) --- --- --- 19,135
2000 44,106 --- $11,027 $31,977 $2,372 ---
2001 9,414 --- 2,354 6,825 376 ---
2002 12,177 --- 3,044 8,828 407 ---
3
All amounts are rounded to the nearest dollar.
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[*4] On September 2, 2011, we issued an Order granting respondent’s motion for
partial summary judgment. In that Order, we held that “petitioner is estopped from
denying liability for the fraud additions to tax and penalties for 1998 through
2001.”
On October 15, 2012, we issued an Order in which we ordered petitioner to
file a response to respondent’s motion. In that Order, we also indicated that our
review of the record suggested that petitioner might intend to advance in this case
frivolous and/or groundless statements, contentions, arguments and/or questions.
We reminded petitioner in the Order dated October 15, 2012, about section
6673(a)(1) and admonished him that if he advanced frivolous and/or groundless
statements, contentions, arguments, and/or questions and/or instituted or maintained
this proceeding primarily for delay, we would impose on him a penalty under section
6673(a)(1) in an amount not exceeding $25,000.
Discussion
We may grant summary judgment where there is no genuine dispute as to any
material fact and a decision may be rendered as a matter of law. Rule 121(b);
Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17 F.3d 965 (7th
Cir. 1994).
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[*5] In respondent’s motion, respondent seeks summary adjudication that
petitioner is liable for the following amounts4 of deficiencies in, additions to, and
fraud penalties on petitioner’s tax for his taxable years 1998 through 2001:5
Additions to tax under secs. Penalty
under sec.
Year Deficiency 6651(a)(1) 6651(a)(2) 6651(f) 6654(a) 6663(a)
19981 $21,146 $5,287 --- --- --- $15,860
19991 -0- -0- --- --- --- 17,619
20001 26,745 --- $6,686 $19,390 $1,404 ---
2001 9,414 --- 2,354 6,825 376 ---
1
The respective amounts shown above for each of petitioner’s taxable years
1998, 1999, and 2000 are less than the respective amounts that respondent
determined in the notice for each of those taxable years. The amount of the addition
to tax under sec. 6651(a)(1) for petitioner’s taxable year 1999 that respondent
determined in the notice was ($196).
The respective amounts of the deficiencies in petitioner’s tax for his taxable
years 1998 and 2000 with respect to which respondent seeks summary adjudication
equal the respective amounts of the unpaid tax liabilities that the indictment
charged, and the jury agreed, petitioner had for those taxable years. The respective
4
All amounts are rounded to the nearest dollar.
5
In respondent’s motion, respondent concedes the determinations that
respondent made in the notice with respect to petitioner’s taxable year 2002, a
taxable year not involved in the criminal proceeding.
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[*6] amounts of the deficiencies in petitioner’s tax for his taxable years 1999 and
2001 with respect to which respondent seeks summary adjudication are less than the
respective amounts of the unpaid tax liabilities that the indictment charged, and the
jury agreed, petitioner had for those years.
It is petitioner’s position that there are genuine disputes of material fact that
preclude us from granting respondent’s motion. In support of that position, petitioner
argues (petitioner’s withholding credit argument) that his “employer” withheld tax
from his wages during each of his taxable years 1998 through 2002 and that any
deficiency in his tax for each of those taxable years must be determined by allowing
him a credit for tax withheld for each such year.
We have jurisdiction to redetermine the correct amount of a deficiency where
the Commissioner of Internal Revenue has issued a valid notice of deficiency and
the taxpayer has timely filed a petition. E.g., Versteeg v. Commissioner, 91 T.C.
339, 340 (1988). The term “deficiency” is defined in section 6211(a) to mean
the amount by which the tax imposed * * * exceeds the excess of--
(1) the sum of
(A) the amount shown as the tax by the taxpayer upon his
return, if a return was made by the taxpayer and an amount was
shown as the tax by the taxpayer thereon, plus
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[*7] (B) the amounts previously assessed (or collected
without assessment) as a deficiency, over--
(2) the amount of rebates * * * made.
Because the amount of a deficiency is determined “without regard to the credit
under section 31”,6 sec. 6211(b)(1), we will not consider petitioner’s withholding
credit argument in determining whether to grant respondent’s motion.
In addition to petitioner’s withholding credit argument, petitioner advances in
petitioner’s response certain statements, contentions, arguments, and/or questions
that we find to be frivolous and/or groundless.
Based upon our examination of the entire record before us, we conclude that
there is no genuine dispute as to any material fact that requires a trial in this case.
On that record, and taking into account the Order dated September 2, 2011, we
further conclude that respondent is entitled as a matter of law to summary
adjudication that petitioner is liable for deficiencies in, additions to, and fraud
penalties on petitioner’s tax for his taxable years 1998 through 2001 in the respective
amounts set forth in respondent’s motion.
6
Sec. 31(a) provides that the amount withheld from wages as tax is to be
allowed to the recipient of the income as a credit against the tax imposed by the
Code.
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[*8] We turn now sua sponte to section 6673(a)(1),7 a provision that we brought to
petitioner’s attention in the Order dated October 15, 2012. In that Order, we ordered
petitioner to file a response to respondent’s motion. We also admonished petitioner
in the Order dated October 15, 2012, that we would impose a penalty on him under
section 6673(a)(1) if he advanced frivolous and/or groundless statements,
contentions, arguments, and/or questions and/or instituted or maintained this
proceeding primarily for delay. Nonetheless, petitioner advances in petitioner’s
response certain statements, contentions, arguments, and/or questions that we find to
be frivolous and/or groundless.
On the record before us, we find that petitioner’s position in this case is
frivolous and groundless and that he instituted and maintained this case primarily for
delay. Accordingly, we shall impose on petitioner a penalty under section 6673(a)(1)
in the amount of $20,000.
We have considered any statements, contentions, arguments, and/or questions
of petitioner that are not frivolous and/or groundless and that are not discussed
herein, and we find them to be without merit and/or irrelevant.
7
Sec. 6673(a)(1) authorizes us to impose a penalty on a taxpayer in an amount
not exceeding $25,000 if, inter alia, the taxpayer instituted or maintained a
proceeding before us primarily for delay or the taxpayer’s position in the proceeding
is frivolous or groundless.
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[*9] On the record before us, we shall grant respondent’s motion.
To reflect the foregoing, the concessions of respondent, and the Order dated
September 2, 2011,
An appropriate order and decision will
be entered.