DocketNumber: No. 24108-08
Citation Numbers: 2010 T.C. Memo. 86, 99 T.C.M. 1357, 2010 Tax Ct. Memo LEXIS 86
Judges: \"Vasquez, Juan F.\"
Filed Date: 4/21/2010
Status: Non-Precedential
Modified Date: 4/18/2021
MEMORANDUM FINDINGS OF FACT AND OPINION
VASQUEZ,
Additions to Tax | ||||
Year | Deficiency | |||
2004 | $ 3,193 | $ 718.42 | $ 606.67 | --- |
2005 | 3,188 | 717.30 | 414.44 | $ 127.87 |
All section references are to the Internal Revenue Code (Code), and all Rule references are to the Tax Court Rules of Practice and Procedure. The issues for decision are whether petitioner is: (1) liable for the deficiencies in his Federal income taxes; (2) liable for the additions to tax under
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The stipulation of facts and the accompanying exhibits are incorporated by this reference. At the time the petition was filed, petitioner resided in New York.
During 2004 petitioner worked for Barton Protective Services, Inc. (Barton), and Allied-Barton Security Services (Allied) and received wages of $ 20,171 and $ 11,716 from Barton *87 and Allied, respectively. In 2005 petitioner worked for Allied and received $ 31,893 in wages. Neither Barton nor Allied withheld any Federal income tax from petitioner's wages because he filed a Form W-4, Employee's Withholding Allowance Certificate, for both years claiming that he was exempt from Federal income tax withholding. Petitioner filed several documents with his employers claiming that his submission of Form W-4 was involuntary, he was exempt from withholding, and he incurred no Federal income tax liability. Petitioner failed to file Federal income tax returns for 2004 and 2005.
Pursuant to
Petitioner stipulated that he received wages from Barton *88 and Allied as determined by respondent. However, petitioner claims that he is not liable for tax on the amounts included in his gross income by respondent because: (1) Employers are liable for Federal income taxes on employee wages; (2) wages are not taxable income; and (3) respondent does not have the authority to prepare SFRs.
OPINION
As a general rule, the taxpayer bears the burden of proving the Commissioner's deficiency determinations incorrect.
Petitioner does not dispute receiving the wages or respondent's calculation of tax. Rather, petitioner disagrees only with respondent's legal conclusions (i.e., that petitioner's wages are taxable; that petitioner, not his employer, is liable *89 for the income tax; and that respondent has the authority to prepare the SFRs). Since the facts are undisputed and petitioner has failed to introduce credible evidence,
In his petition, at trial, and on brief, petitioner advanced shopworn arguments characteristic of tax-protester rhetoric that have been universally rejected by this and other courts. See
Petitioner failed to file Federal income tax returns for 2004 and 2005. Accordingly, *91 we find that respondent has met his burden of production with regard to the additions to tax under
With respect to the
SEC. 6020(b). Execution of Return by Secretary. -- (1) Authority of Secretary to execute return. *92 -- If any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise. (2) Status of returns. -- Any return so made and subscribed by the Secretary shall be prima facie good and sufficient for all legal purposes.
Respondent provided the Court with copies of the SFRs prepared for petitioner for 2004 or 2005. The SFRs satisfy the requirements of
Petitioner failed to file Federal income tax returns for 2004 and 2005. Accordingly, his required annual payment was 90 percent of the tax for 2005. Petitioner did not make any estimated income tax payments for 2005. Therefore, respondent has produced sufficient evidence that petitioner is liable for the
At the conclusion of the trial, respondent filed a motion for sanctions pursuant to
In his petition petitioner claimed that his wages were not taxable because he was not engaged in any "excise taxable activities." During a face-to-face meeting, respondent warned petitioner that his argument was frivolous. Through written correspondence, respondent advised petitioner that his argument was frivolous and that he would seek sanctions under
Undeterred, petitioner in his pretrial memorandum raised various issues, including whether subtitle C of the Code should be considered in determining petitioner's tax liability. At trial petitioner argued that under subtitle C, employers rather than employees, are liable for Federal income taxes on employee wages. We warned petitioner that his arguments were frivolous and have been universally rejected by this and other courts. We further advised petitioner that the Court has the discretion to impose a penalty of up to $ 25,000 if he were to proceed with such arguments.
Despite repeated warnings from respondent and this Court, petitioner advanced patently frivolous arguments at trial and in his postrial brief. In doing so, petitioner has wasted the limited time and resources of the Court. The Court of Appeals for the *96 Second Circuit, the court to which this case would be appealable, has characterized petitioner's subtitle C argument as "baseless". See
We are convinced, however, that petitioner's frivolous arguments were made at the suggestion of a woefully misinformed adviser. In response to questions from the Court, petitioner was unable to articulate certain positions raised in his pretrial memorandum. This is the first time petitioner has engaged in conduct sanctionable under
Though we decline to impose a penalty at this time, we take this opportunity to warn petitioner that we will impose a
In reaching our holdings, we have considered all *97 arguments made, and, to the extent not mentioned, we conclude that they are moot, irrelevant, or without merit.
To reflect the foregoing,
1. Respondent listed petitioner's wages on the 2004 SFR as $ 31,627, which is $ 260 less than the stipulated amount of $ 31,887. This discrepancy has no effect on the outcome of this case.↩
2. If the Secretary makes a return for the taxpayer under
3. In
Wheeler v. Commissioner , 521 F.3d 1289 ( 2008 )
Anselme O. Connor v. Commissioner of Internal Revenue , 770 F.2d 17 ( 1985 )
Glenn Crain v. Commissioner of Internal Revenue , 737 F.2d 1417 ( 1984 )
John M. And Alice D. Church v. Commissioner of Internal ... , 810 F.2d 19 ( 1987 )
United States v. Walter A. Connor, Jr. , 898 F.2d 942 ( 1990 )
Norman E. Coleman v. Commissioner of Internal Revenue, Gary ... , 791 F.2d 68 ( 1986 )
Swain v. Comm'r , 118 T.C. 358 ( 2002 )
Charles William Ledford v. United States , 297 F.3d 1378 ( 2002 )