T.C. Memo. 2018-188

UNITED STATES TAX COURT

MICHAEL JAMES WELLS AND 

LYNN ANITA KIRCHNER-WELLS, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 9693-17. Filed November 8, 2018.

Michael James Wells and Lynn Anita Kirchner-Wells, pro sese.

David B. Mora, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

GERBER, Judge: This matter is before the Court on respondent’s motion

for summary judgment filed pursuant to Rule 121.

1

 Respondent determined a

1Unless otherwise indicated, all section references are to the Internal

Revenue Code in effect for the years at issue, and all Rule references are to the

(continued...)
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[*2] deficiency in petitioner Michael James Wells’ 2012 Federal income tax of

$52,051 and additions to tax of $7,349.85, $7,186.52, and $547.03 under sections

6651(a)(1) and (2) and 6654, respectively.

2

 Respondent also determined a

deficiency in petitioners’ 2013 Federal income tax of $93,807.

3

FINDINGS OF FACT

At the time the petition was filed, petitioners resided in Texas. 

During the years at issue Mr. Wells worked in marketing at TransCanada

and petitioner Lynn Anita Kirchner-Wells worked in sales at Hewlett-Packard. 

Petitioners filed joint Federal income tax returns for taxable years 2012 and 2013

that reported zero wages and zero income except for $10.59 in interest for taxable

year 2012. Petitioners sought refunds for the full amounts of tax withheld from

their paychecks for both years. Attached to their returns were Forms W-2, Wage

and Tax Statement, from TransCanada and Hewlett-Packard which reflected the

1

(...continued)

Tax Court Rules of Practice and Procedure. 

2Upon motion by respondent and after a hearing, the case was dismissed

solely as to Ms. Kirchner-Wells’ 2012 taxable year for lack of jurisdiction on the

ground that the petition was not timely filed with respect to the notice of

deficiency for 2012 issued to her on August 29, 2016.

3Respondent conceded the sec. 6662(a) penalty for petitioners’ 2013 taxable

year.
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[*3] amounts of wages and tax withheld for each year and corrected Forms 1099-

DIV, Dividends and Distributions, and other documents. 

Petitioners also attached Forms 4852, Substitute for Form W-2, Wage and

Tax Statement, to each of the returns indicating zero wages and the same amounts

of tax withheld as was shown on each Form W-2. The Forms 4852 included the

following tax protester statements:

I am a private-sector worker, not an “employee” as defined in IRC

3401(c) and IRC 3121. I worked with a private-sector company, not

a federal employer as defined in IRC 3401(d). I did not engage in a

“trade or business” as defined in USC Section 7701(a)(26). 

* * * * * * *

Did not ask Payer to issue corrected forms listing my payments of

“wages” as defined in IRC 3401(c) and IRC 3121 for fear of creating

a conflicted work environment. Line 7(e)(h)(I) reflect accurately

withheld values submitted by Payer on W-2. 

Respondent did not treat petitioners’ 2012 and 2013 returns as valid or

timely. Instead, respondent prepared substitutes for returns (SFR) for both years

pursuant to section 6020(b) and pursuant to section 6702(a) assessed frivolous

return penalties against petitioners with respect to both returns. The SFRs showed

tax liabilities of $52,051 and $93,807 for the 2012 and 2013 taxable years,

respectively.
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[*4] On May 3, 2017, petitioners filed a petition with the Court, and this case

was called from the calendar at the Court’s February 12, 2018, Houston, Texas,

trial session, where respondent filed a motion for summary judgment. Petitioners

filed an opposition to respondent’s motion for summary judgment on February 15,

2018, and a hearing was held on the matter on February 16, 2018.

OPINION

Summary judgment may be granted if there is no genuine dispute as to any

material fact and a decision may be rendered as a matter of law. Rule 121(b).

Factual inferences are viewed in a light most favorable to the nonmoving party,

and the moving party bears the burden of proving that there is no genuine dispute

of material fact and that he is entitled to judgment as a matter of law. Sundstrand

Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17 F.3d 965 (7th Cir.

1994). However, the nonmoving party “must set forth specific facts showing that

there is a genuine dispute for trial.” Rule 121(d); see Sundstrand Corp.v.

Commissioner, 98 T.C. at 520.

I. Petitioners’ Deficiencies

Gross income includes “all income from whatever source derived”. Sec.

61(a). Payments that are “undeniable accessions to wealth, clearly realized, and

over which the taxpayers have complete dominion” are taxable income unless an
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[*5] exclusion applies. See Commissioner v. Glenshaw Glass Co., 348 U.S. 426,

431 (1955). Petitioners do not dispute that they received the income on which the

deficiencies are based. Instead petitioners argue that they are not liable for

Federal income tax. Petitioners’ assertions that they are not employees and their

wages do not constitute taxable income are common tax protester arguments that

this Court has repeatedly rejected as groundless and frivolous. See, e.g., Grunsted

v. Commissioner, 136 T.C. 455 (2011); Bonaccorso v. Commisioner, T.C. Memo.

2005-278; Deputy v. Commissioner, T.C. Memo. 2003-210; Rayner v.

Commissioner, T.C. Memo. 2002-30, aff’d, 70 F. App’x 739 (5th Cir. 2003). 

We will not refute petitioners’ arguments with somber reasoning and

copious citations as if such arguments possessed some colorable merit. See Crain

v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984). Petitioners have alleged

no facts in their objections to respondent’s motion for summary judgment or

argued that any material facts are in dispute relating to respondent’s determination

of their tax liabilities. Therefore, respondent’s deficiency determinations are

sustained.

II. Additions to Tax Imposed Against Mr. Wells

Respondent determined Mr. Wells is liable for additions to tax under

sections 6651(a)(1) and (2) and 6654 for the 2012 taxable year. Under section
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[*6] 7491(c), the Commissioner has the burden of production to show that the

imposition of an addition to tax or penalty is appropriate. Respondent satisfied the

burden of production by means of petitioners’ return, third-party information

returns relating to petitioners’ income, and petitioners’ Forms 4852 attached to

their return and the SFR for 2012.

Section 6651(a)(1) requires an imposition of an addition to tax for failure to

file a timely return unless the taxpayer proves that such failure was due to

reasonable cause and not due to willful neglect. To determine whether a taxpayer

has filed a valid return for purposes of section 6651(a)(1), the Court looks to the

test in Beard v. Commissioner, 82 T.C. 766, 777 (1984), aff’d, 793 F.2d 139 (6th

Cir. 1986). See, e.g., Holmes v. Commissioner, T.C. Memo. 2011-31.

The four-part test in Beard v. Commissioner, 82 T.C. at 777, requires that:

(1) the document contains sufficient data to calculate tax liability, (2) the

document purports to be a return, (3) there is a honest and reasonable attempt to

satisfy the requirements of the tax law, and (4) the taxpayer execute the return

under penalties of perjury. Respondent contends that the 2012 tax return Mr.

Wells filed did not constitute a valid return because it did not meet the first and

third requirements of the Beard test. We agree with respondent. First, a majority

of courts and this Court have consistently held that a tax return containing only
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[*7] zeros is not a valid return because it does not contain sufficient information

for the Commissioner to calculate and assess a tax liability. See United States v.

Mosel, 738 F.2d 157 (6th Cir. 1984); United States v. Smith, 618 F.2d 280, 281

(5th Cir. 1980); Cabirac v. Commissioner, 120 T.C. 163, 169 (2003), aff’d without

published opinion, 94 A.F.T.R.2d (RIA) 2004-5490 (3d Cir. 2004); Arnett v.

Commissioner, T.C. Memo. 2006-134, aff’d, 242 F. App’x 496 (10th Cir. 2007). 

Second, zero returns accompanied by arguments that have been consistently

rejected by the courts do not constitute an honest and reasonable attempt to satisfy

the requirements of the tax law. See Cabirac v. Commissioner, 120 T.C. at 169-

170; Halcott v. Commissioner, T.C. Memo. 2004-214. Mr. Wells did not file a

valid return for taxable year 2012 and did not argue or show that his failure to file

was due to reasonable cause. Therefore, respondent’s determination that Mr.

Wells is liable for the addition to tax for failure to file under section 6651(a)(1) is

sustained.

Section 6651(a)(2) imposes an addition to tax for failure to pay timely the

amount of tax shown on a return. Like the addition to tax for failure to timely file,

this addition will not be imposed when a taxpayer demonstrates that failure to pay

was due to reasonable cause and not willful neglect. Sec. 6651(a)(2). Mr. Wells

did not file a valid return for 2012. However, respondent prepared an SFR for Mr.
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[*8] Wells’ 2012 taxable year (2012 SFR) pursuant to section 6020(b). An SFR

prepared by the Secretary under section 6020(b) is treated as the return filed by the

taxpayer for purposes of section 6651(a)(2). See sec. 6651(g)(2). The record

contains the 2012 SFR respondent prepared and issued to Mr. Wells and shows

that the requirements of section 6020(b) are met. See Rader v. Commissioner, 143

T.C. 376, 382 (2014), aff’d in part, appeal dismissed in part, 616 F. App’x 391

(10th Cir. 2015). Mr. Wells did not dispute that he failed to pay the tax shown on

his 2012 return and did not argue or show that his failure to pay was due to

reasonable cause. Therefore, respondent’s determination that Mr. Wells is liable

for the addition to tax for failure to timely pay under section 6651(a)(2) is

sustained.

Section 6654 imposes an addition to tax for underpayment of a required

installment of estimated tax. The Commissioner’s burden requires him to produce

evidence that the taxpayer had a “required annual payment” under section 6654(d). 

To do so the Commissioner must establish the tax shown on the taxpayer’s return

for the preceding year or demonstrate that the taxpayer filed no such return. See

Wheeler v. Commissioner, 127 T.C. 200, 208-211 (2006), aff’d, 521 F.3d 1289

(10th Cir. 2008). Respondent was able to show that Mr. Wells was required to file

a Federal income tax return for 2012 but that the return he filed was invalid. 
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[*9] Respondent produced a valid SFR showing a $52,051 tax liability for Mr.

Wells’ 2012 taxable year. Further, respondent’s motion for summary judgment

included evidence showing that Mr. Wells did not file an income tax return for

2011. Mr. Wells does not dispute that he did not make estimated tax payments for

2012. Mr. Wells does not contend he qualifies for any of the exceptions under

section 6654(e) and presented no argument with respect to the section 6654

addition to tax. Therefore, we sustain respondent’s determination that Mr. Wells

is liable for the addition to tax under section 6654.

The Court may on its own determine whether to impose a penalty not to

exceed $25,000 when it appears to the Court that a taxpayer’s position is frivolous

or groundless. Sec. 6673. We did not find in the record that petitioners have

made these or similar frivolous claims in the Court before or that they have been

previously forewarned. Thus we will not impose one here, nor does respondent

seek a section 6673 penalty in this case. However, we caution petitioners that

future advancement of these or similar arguments are likely to be sanctioned and

will result in penalties of up to $25,000 under section 6673. 

We have examined all the materials in the record and construed facts most

favorably for petitioners, and we conclude that there is no genuine dispute as to
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[*10] any material fact for trial in this case. Therefore, respondent’s motion for

summary judgment will be granted.

To reflect the foregoing,

An appropriate order and decision

will be entered.