Wheeler v. Comm'r , 102 T.C.M. 540 ( 2011 )

T.C. Memo. 2011-278
UNITED STATES TAX COURT
CHARLES R. WHEELER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 615-10. Filed November 23, 2011.
Charles Raymond Wheeler, pro se.
Philip E. Blondin, for respondent.
MEMORANDUM OPINION
HAINES, Judge: Respondent determined a deficiency of $5,939
and additions to tax under sections 6651(a)(1) and (2) and
6654(a) of $1,203, $748, and $250, respectively, for 2006.1 The
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended for the years at issue, and
Rule references are to the Tax Court Rules of Practice and
(continued...)
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deficiency is attributable to petitioner’s failure to report
pension income of $45,459 he received from the Defense Finance
and Accounting Service (DFAS), dividend income of $534, and
interest income of $3. The only bona fide issue for decision is
whether petitioner is liable for a penalty under section 6673
and, if so, how much that penalty should be.
Background
Petitioner is litigious and has an extensive history before
this Court.2 In each instance, petitioner has relied on a
variety of repetitious and frivolous arguments. This case is no
different. Petitioner resided in Colorado at the time he filed
his petition.
On December 22, 2010, the Court filed respondent’s requests
for admissions, which had been served on petitioner 2 days
1
(...continued)
Procedure. Amounts are rounded to the nearest dollar.
2
See Wheeler v. Commissioner, 127 T.C. 200 (2006)
(redetermining petitioner’s liability for 2003), affd. 521 F.3d
1289 (10th Cir. 2008), Wheeler v. Commissioner, T.C. Memo. 2006-
109 (redetermining petitioner’s liabilities for 1994 through
2001), affd. 528 F.3d 773 (10th Cir. 2008), Wheeler v.
Commissioner, T.C. Memo. 2010-188 (redetermining petitioner’s
liabilities for 2002, 2004 and 2005), affd. Fed. Appx.
(10th Cir., Nov. 1, 2011). In Wheeler v. Commissioner, docket
No. 15205-08L, he challenged collection actions for 1994 through
2001 and 2003; summary judgment was granted against petitioner in
that case on Mar. 25, 2009, with the Court concluding that he
failed to “raise bona fide issues or any genuine issue relating
to a material fact”. That decision was affirmed by the Court of
Appeals for the Tenth Circuit on Dec. 15, 2009. Wheeler v.
Commissioner, 356 Fed. Appx. 188 (10th Cir. 2009).
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earlier. Petitioner failed to respond in a timely manner, and
pursuant to Rule 90(c), each matter set forth in the requests for
admissions was deemed admitted 30 days after the date of
service.3 We adopt those admissions as our own findings and
incorporate them herein by this reference.
In 2006 petitioner received $45,459 in military retirement
payments from DFAS, $534 of dividends, and $3 of interest.
Petitioner is entitled to withholding credits of $594 for 2006.
Petitioner did not file a Federal income tax return for 2006. As
a result, on August 3, 2009, the Internal Revenue Service (IRS)
prepared a substitute for return pursuant to section 6020(b)
using information reported by third-party payors. The notice of
deficiency was sent on October 5, 2009.
At no time before or during trial did petitioner attempt to
substantiate any deduction or dispute the receipt of income that
was included in the statutory notice. At all times petitioner
has relied solely on frivolous arguments about tax return filing
requirements, preparation of substitutes for returns, and
procedures for determination of tax deficiencies and additions to
tax. Petitioner requested permission and was allowed to file a
posttrial brief. Petitioner’s posttrial brief sets forth a
3
On Mar. 7, 2011, 1 week before calendar call, the Court
received and filed petitioner’s motion to enlarge time to file
his responses to respondent’s request for admissions and lodged
his responses to respondent’s request for admissions. At trial
the Court denied petitioner’s motion.
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misguided argument that respondent failed to properly prepare a
substitute for return for 2006 pursuant to section 6020(b) and
failed to provide petitioner with his due process rights.
Discussion
The Commissioner’s determinations in the notice of
deficiency are generally presumed correct, and the taxpayer bears
the burden of proving them incorrect. See Rule 142(a)(1).
Petitioner has admitted to receiving $45,459 in military
retirement payments from DFAS, $534 of dividends, and $3 of
interest in 2006. He has failed to present any argument for why
these amounts should not be included in his 2006 taxable income.
We therefore sustain respondent’s determinations with respect to
petitioner’s deficiency.
With respect to the additions to tax, petitioner has not
shown reasonable cause for his failure to file returns or pay tax
and has not shown an exception to the requirement that he make
estimated tax payments. The additions to tax determined in the
statutory notice are appropriate.
Petitioner continues to take up this Court’s valuable time
and resources with frivolous and irrelevant arguments. To expand
upon his contentions is simply not necessary. As this Court
stated recently in Wheeler v. Commissioner, T.C. Memo. 2010-188:
“To do so would be to encourage the dilatory conduct that * * *
[petitioner] has employed throughout the history of this case and
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would neither dissuade petitioner nor provide useful guidance to
taxpayers with legitimate cases.”
A penalty in the maximum amount of $25,000 is appropriate
when lesser amounts have not deterred a taxpayer’s defiance of
the tax laws and of the rulings of the courts. See, e.g.,
Tinnerman v. Commissioner, T.C. Memo. 2010-150; Davenport v.
Commissioner, T.C. Memo. 2009-248. Petitioner was penalized
$1,500 in each of three prior docketed cases. See Wheeler v.
Commissioner, 127 T.C. 200, 214 (2006), affd. 521 F.3d 1289 (10th
Cir. 2008); Wheeler v. Commissioner, T.C. Memo. 2006-109, affd.
528 F.3d 773 (10th Cir. 2008). The Court of Appeals for the
Tenth Circuit, in affirming the decision entered pursuant to
Wheeler v. Commissioner, 127 T.C. 200 (2006), noted that his
appeal was frivolous and that sanctions might be awarded, but
declined to do so because of dissatisfaction with respondent’s
request for an $8,000 lump-sum award. Wheeler v. Commissioner,
521 F.3d at 1291-1292. In the appeal from the decision entered
pursuant to Wheeler v. Commissioner, T.C. Memo. 2006-109, the
Court of Appeals for the Tenth Circuit awarded a sanction of
$4,000 against petitioner. Wheeler v. Commissioner, 528 F.3d at
785.
Most recently, in Wheeler v. Commissioner, T.C. Memo. 2010-
188, affd. Fed. Appx. (10th Cir., Nov. 1, 2011), we
imposed the maximum penalty allowed of $25,000. Further, the
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Court of Appeals for the Tenth Circuit awarded the Commissioner a
lump-sum sanction of $6,000. Petitioner seems to remain
undeterred in his defiance of his Federal tax obligations. We
again find that a $25,000 penalty is justified. The decision in
this case will include a determination that petitioner owes to
the United States a penalty of $25,000.
In reaching these holdings, the Court has considered all
arguments made and, to the extent not mentioned, concludes that
they are moot, irrelevant, or without merit.
To reflect the foregoing,
Decision will be entered
for respondent.