1 Unless otherwise indicated, section references are to the

Internal Revenue Code in effect for the year at issue. All

monetary amounts have been rounded to the nearest dollar. 

T.C. Memo. 2006-148

UNITED STATES TAX COURT

SYLVESTER H. CAIN, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 20344-04. Filed July 19, 2006.

Sylvester H. Cain, pro se.

Charles M. Berlau, for respondent.

MEMORANDUM OPINION

THORNTON, Judge: Respondent determined a $2,890 deficiency

in petitioner’s 2001 Federal income tax and a $578 accuracyrelated penalty under section 6662.1 The only bona fide issue
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for decision is whether a penalty should be imposed on petitioner

under section 6673. 

Background

The parties have stipulated some facts, which we incorporate

herein. When he filed his petition, petitioner resided in Saint

Marys, Kansas.

Until his retirement in 2001, petitioner was employed by the

U.S. Department of Education. The parties have stipulated that

during 2001 petitioner received the following payments: 

“pension/annuity payments” of $23,988 from the U.S. Office of

Personnel Management; “medical payments” from Monumental Life

Insurance Company of $2,009; and Social Security payments of

$2,148. 

On his 2001 Form 1040, U.S. Individual Income Tax Return,

petitioner reported zero gross income and claimed a $2,278

refund. Attached to his Form 1040 was a Statement of Annuity Paid

from the Office of Personnel Management, reporting $23,988 gross

annuity payments to petitioner in 2001 and zero Federal income

tax withheld. Also attached to petitioner’s Form 1040 was Form

4852, Substitute for Form W-2, Wage and Tax Statement, or Form

1099-R, Distributions From Pensions, Annuities, Retirement or

Profit-Sharing Plans, IRAs, Insurance Contracts, Etc., on which

petitioner claimed $2,278 of Federal income tax withheld by the

Office of Personnel Management, for which petitioner claimed a
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refund. Attached to the Form 4852 was Form 8275, Disclosure

Statement, in which petitioner claimed that the Office of

Personnel Management had “improperly reported” annuities paid to

him as gross income because this “remuneration” was not from any

of the foreign sources listed in section 861 and the regulations

thereunder. 

By letter dated July 14, 2004, respondent’s Appeals Office

provided petitioner a document entitled “The Truth About

Frivolous Tax Arguments”, which contained, among other things, a

discussion, with citations to relevant authority, of the

frivolous nature of the contention that only foreign-source

income under section 861 is taxable. This document also

described penalties, including the section 6673 penalty, for

pursuing frivolous tax arguments. 

In the notice of deficiency, issued July 21, 2004,

respondent determined that the $23,988 that petitioner had

received from the Office of Personnel Management in 2001

represented taxable income under section 61. Respondent also

determined that petitioner had $2,009 unreported self-employment

income as shown on Form 1099-MISC, Miscellaneous Income, from

Monumental Life Insurance Company and that petitioner’s 2001

Social Security benefits were taxable in the amount of $965. 

Respondent determined that petitioner was liable for a section

6662 accuracy-related penalty of $578.
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In his petition, petitioner contended without elaboration 

that respondent had erred in determining that he had gross and

taxable income; that he was entitled to “personal exemptions,

deductions and possibly business expenses”; and that the notice

of deficiency was invalid because “the Internal Revenue Service

failed to execute an involuntary return as required by the IR

Code.”

By Order dated November 28, 2005, the Court directed

petitioner by December 28, 2005, to file a response to

respondent’s motion to compel production of documents, in which

respondent requested documentary evidence to substantiate

petitioner’s claimed entitlement to deductions or exemptions. 

Petitioner having filed no response, on January 6, 2006, the

Court granted respondent’s motion to compel production of

documents. On February 13, 2006, petitioner untimely filed his

response to respondent’s motion to compel production of

documents. Petitioner’s response was not fairly directed to the

substance of respondent’s request for production of documents but

instead asserted that by failing to produce Form 23C, Assessment

Certificate--Summary Record of Assessments (Form 23C), respondent

was proceeding “illegally and prematurely to collection

activities”.

On February 3, 2006, this Court entered summary judgment for

respondent in the case at docket No. 22706-04L, a collection case
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involving petitioner’s 2000 income taxes. In its Order, the

Court rejected as meritless petitioner’s contention that

respondent did not properly assess his 2000 tax liability because

petitioner did not receive copies of Form 23C. In its Order, the

Court cautioned petitioner that if he raised similar frivolous

arguments in this Court in the future, the Court might impose

penalties of up to $25,000 pursuant to section 6673.

In his pretrial memorandum submitted to the Court and served

on petitioner January 27, 2006, respondent indicated that a

section 6673 penalty might be sought if petitioner continued to

assert frivolous contentions.

On February 13, 2006, this case was called for trial in

Kansas City, Missouri. Petitioner appeared and renewed his

frivolous contentions regarding section 861 and Form 23C. 

Petitioner responded to questions from respondent’s counsel

confirming petitioner’s employment and retirement in 2001 but

otherwise declined to offer any evidence or testimony on the

ground: “I don’t have an assessment”.

Discussion

Petitioner has stipulated the items of unreported income

upon which the notice of deficiency is based. Petitioner has

raised no bona fide dispute as to the inclusion of these items in

his taxable income. As petitioner was advised by respondent

during pretrial preparations, petitioner’s contentions that only
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2 Petitioner has not challenged respondent’s assertion of

the accuracy-related penalty pursuant to sec. 6662. We deem

(continued...)

foreign-source income is taxable have been repeatedly rejected as

frivolous. See, e.g., Takaba v. Commissioner, 119 T.C. 285, 294-

295 (2002); Williams v. Commissioner, 114 T.C. 136, 138-139

(2000). Petitioner’s notion that the notice of deficiency is

somehow defective because respondent has not provided him a Form

23C is misguided. Respondent may not assess petitioner’s 2001

taxes, and hence would have no occasion to prepare any record of

assessment such as Form 23C, until after the Tax Court’s decision

has become final in this proceeding to redetermine petitioner’s

deficiency. See sec. 6213(a). Even then, as we advised

petitioner in our February 3, 2006, Order granting respondent’s

motion for summary judgment against petitioner in his collection

case at docket No. 22706-04L, the Commissioner is not required to

use Form 23C in making an assessment. See, e.g., Roberts v.

Commissioner, 118 T.C. 365, 371 (2002), affd. 329 F.3d 1224 (11th

Cir. 2003). All other arguments raised by petitioner are

similarly groundless. 

Petitioner had the burden of identifying and proving any

deductions to which he might be entitled. See, e.g., Rockwell v.

Commissioner, 512 F.2d 882 (9th Cir. 1975), affg. T.C. Memo.

1972-133. Petitioner failed to do so and has not shown that

respondent’s determination is in any way erroneous.2
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2(...continued)

petitioner to have conceded this issue. In any event, the

stipulated facts satisfy respondent’s burden of production with

respect to this penalty. See sec. 7491(c).

Section 6673(a)(1) authorizes the Tax Court to require a

taxpayer to pay to the United States a penalty not in excess of

$25,000 whenever it appears that proceedings have been instituted

or maintained by the taxpayer primarily for delay or that the

taxpayer’s position in such proceedings is frivolous or

groundless. The various arguments that petitioner has made in

this case have long been discredited and patently were asserted

for purposes of delay. Petitioner has ignored warnings from

respondent and this Court that his antics could result in the

imposition of sanctions under section 6673. Petitioner has

unreasonably protracted these proceedings and wasted the

resources of respondent and this Court. Pursuant to section

6673, we require petitioner to pay to the United States a penalty

of $1,000. 

To reflect the foregoing,

An appropriate order and

decision will be entered.