1 Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect for the year in issue, and

all Rule references are to the Tax Court Rules of Practice and

Procedure.

T.C. Memo. 2006-134

UNITED STATES TAX COURT

DONALD P. ARNETT, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 18296-04. Filed June 27, 2006.

Donald P. Arnett, pro se.

David W. Sorensen, for respondent.

MEMORANDUM OPINION

VASQUEZ, Judge: This case is before the Court on

respondent’s motion for summary judgment and to impose a penalty

under section 6673.1
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Respondent determined a deficiency of $4,387 in petitioner’s

2002 Federal income tax, a section 6654 addition to tax of

$146.61, and a section 6651(a)(1) addition to tax of $1,096.75. 

The issues for decision are: (1) Whether petitioner is liable

for the deficiency determined by respondent; (2) whether

petitioner is liable for an addition to tax pursuant to section

6654; (3) whether petitioner is liable for an addition to tax for

failure to file a Federal income tax return pursuant to section

6651(a)(1); and (4) whether petitioner is liable for a penalty

for making frivolous arguments or instituting a proceeding

primarily for delay pursuant to section 6673(a)(1).

Background

Some of the facts have been stipulated and are so found. 

The stipulation of facts and the attached exhibits are

incorporated herein by this reference. At the time the petition

was filed in this case, petitioner resided in New Harmony, Utah.

Respondent received information from third parties regarding

various payments made to petitioner for the 2002 tax year.

Petitioner does not dispute the receipt of these payments.

Petitioner submitted a Form 1040, U.S. Individual Income Tax

Return, for 2002 to respondent. Petitioner listed zero as the

amount of his wages, total income, adjusted gross income, taxable

income, and total tax. Petitioner attached a typewritten

statement to the Form 1040 reciting contentions and arguments
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that this Court has found to be frivolous and/or groundless. 

Petitioner did not pay any estimated income taxes for the 2002

tax year.

Discussion

I. Motion for Summary Judgment

Rule 121(a) provides that either party may move for summary

judgment upon all or any part of the legal issues in controversy. 

Summary judgment may be granted if it is demonstrated that no

genuine issue exists 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), affd. 17 F.3d 965 (7th

Cir. 1994). As the party that moved for summary judgment,

respondent has the burden of showing there is no genuine issue as

to any material fact and that he is entitled to judgment as a

matter of law. Nis Family Trust v. Commissioner, 115 T.C. 523,

536, 537-538 (2000).

We conclude that there is no genuine issue as to any

material fact and that a decision may be rendered as a matter of

law.

II. The Deficiency

Section 61 defines gross income as all income from whatever

source derived. Gross income includes, among other things,

compensation for services, interest, and pensions. Sec. 61(a).
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2 Petitioner received payments totaling $35,873 from

various sources including wages, unemployment compensation,

income from self-employment, and IRA distributions.

Petitioner stipulated that he received the income listed on

the notice of deficiency.

2 Petitioner contends, inter alia, that

the earnings he received are not income, and therefore he is not

liable for taxes. Petitioner also argues that the statutory

notice of deficiency he received is invalid because it was not

signed by the Secretary of the Treasury or an agent designated by

the Secretary. Petitioner advanced these and other arguments in

filings and at the hearing. These arguments are characteristic

of tax-protester rhetoric that has been universally rejected by

this and other courts. Casper v. Commissioner, 805 F.2d 902

(10th Cir. 1986), affg. T.C. Memo. 1985-154; Charczuk v.

Commissioner, 771 F.2d 471 (10th Cir. 1985), affg. T.C. Memo.

1983-433; Michael v. Commissioner, T.C. Memo. 2003-26; Knelman v.

Commissioner, T.C. Memo. 2000-268, affd. without published

opinion 33 Fed. Appx. 346 (9th Cir. 2002). We shall not

painstakingly address petitioner’s assertions “with somber

reasoning and copious citation of precedent; to do so might

suggest that these arguments have some colorable merit.” Crain

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

Accordingly, we conclude that petitioner is liable for the

deficiency determined by respondent.
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III. Additions to Tax

A. Section 6654

Respondent determined that petitioner was liable for an

addition to tax for his failure to pay estimated Federal income

tax under section 6654(a). This addition to tax is mandatory in

the absence of a statutory exception. See Grosshandler v.

Commissioner, 75 T.C. 1, 20-21 (1980). It is undisputed that no

statutory exception applies in this case. Accordingly, we

sustain respondent's determination. 

B. Section 6651(a)(1)

Respondent determined that petitioner is liable for an

addition to tax pursuant to section 6651(a)(1). Section

6651(a)(1) imposes an addition to tax for failure to file a

return on the date prescribed (determined with regard to any

extension of time for filing), unless such failure is due to

reasonable cause and not due to willful neglect. 

Petitioner challenges respondent’s determination because he

filed a Form 1040 for 2002. That tax return, however, contained

zeros for every line. It has been held that a return that

contains only zeros is not a valid return for the purpose of

section 6651(a)(1). United States v. Rickman, 638 F.2d 182, 184

(10th Cir. 1980); Cabirac v. Commissioner, 120 T.C. 163, 169

(2003). 
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In order to determine whether a tax return is valid, we

follow the test enunciated in Beard v. Commissioner, 82 T.C. 766,

777 (1984), affd. 793 F.2d 139 (6th Cir. 1986):

First, there must be sufficient data to calculate tax

liability; second, the document must purport to be a

return; third, there must be an honest and reasonable

attempt to satisfy the requirements of the tax law; and

fourth, the taxpayer must execute the return under

penalties of perjury.

The requirement that petitioner has made “an honest and

reasonable attempt” to satisfy the tax law is not met in the

current case. Petitioner’s attachment to the Form 1040 contained

tax-protester arguments that have been consistently rejected by

this and other courts. Additionally, the Form 1040 filed by

petitioner did not contain sufficient information to constitute a

valid return. Despite petitioner’s admission of the receipt of

various payments from third parties, he filed a zero tax return. 

The section 6651(a)(1) addition to tax applies in the case

of a failure to file a Federal income tax return unless it is

shown that such failure is due to reasonable cause and not to

willful neglect. Higbee v. Commissioner, 116 T.C. 438, 447

(2001). It must be shown that the taxpayer exercised business

care and prudence but nevertheless was unable to file the return

within the specified time. See United States v. Boyle, 469 U.S.

241, 245 (1985); sec. 301.6651-1(c)(1), Proced. & Admin. Regs. 

Willful neglect means a conscious, intentional failure, or

reckless indifference. United States v. Boyle, supra at 245. 
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Petitioner did not act in good faith. Petitioner relied on

frivolous tax-protester arguments in deciding not to file an

adequate return. Petitioner’s reliance on these materials does

not constitute reasonable cause for failing to file a return. 

See Coulton v. Commissioner, T.C. Memo. 2005-199. Accordingly,

we sustain respondent’s determination.

IV. Penalty

Section 6673(a)(1) authorizes this Court to require a

taxpayer to pay to the United States a penalty not to exceed

$25,000 if the taxpayer took frivolous positions in the

proceeding or instituted the proceedings primarily for delay. A

position maintained by the taxpayer is “frivolous” where it is

“contrary to established law and unsupported by a reasoned

colorable argument for change in the law.” Coleman v.

Commissioner, 791 F.2d 68, 71 (7th Cir. 1986). The U.S. Court of

Appeals for the Tenth Circuit, the court which is the likely

venue for appeal of this case, has upheld sanctions against

taxpayers making arguments similar to petitioner’s. See Casper

v. Commissioner, supra at 905; Charczuk v. Commissioner, supra at

475.

Petitioner’s protester rhetoric is manifestly frivolous and

groundless. He has caused this Court to waste limited resources

by his persistence in advancing views of the tax law which are

known to be completely without merit. Petitioner was duly warned
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that his arguments are frivolous and groundless, and of the

potential consequences of his actions. Accordingly, pursuant to

section 6673(a), we hold petitioner is liable for a $1,000

penalty.

 To reflect the foregoing,

An appropriate order

and decision will be entered.