T.C. Memo. 2006-122

UNITED STATES TAX COURT

GARY LEE GUNTON, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 2911-04. Filed June 13, 2006.

Gary Lee Gunton, pro se.

Anne D. Melzer, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

COHEN, Judge: Respondent determined a deficiency of $2,381

in petitioner’s Federal income tax for 2001 and an addition to

tax of $592.41 under section 6651(a)(1). After concessions by

respondent, the issues to be decided are: (1) Whether

compensation that petitioner received in 2001 is taxable to him

and (2) whether petitioner is liable for the addition to tax. 
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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.

FINDINGS OF FACT

Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference. 

Petitioner resided on the Allegany Reservation in New York at the

time that he filed his petition.

Petitioner is an enrolled Seneca Indian and a member of the

Haudenosaunee Confederacy (Six Nations).

During 2001, petitioner was employed by Asplundh Tree Expert

Co. (Asplundh) to cut down trees. Petitioner was paid $21,494 by

Asplundh in 2001. From February 16 through March 31, 2001,

Asplundh withheld $470.26 from petitioner’s wages. Afterwards,

petitioner filed a Form W-4, Employee’s Withholding Allowance

Certificate, claiming “exempt” from income taxes. Petitioner did

not file a Federal income tax return for 2001. 

OPINION

Section 1 imposes a tax on all taxable income. Section

61(a)(1) includes in gross income “all income from whatever

source derived,” including compensation for services. Respondent

determined that the amounts paid to petitioner by Asplundh were

taxable income. Petitioner argues that these amounts are exempt
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from tax because he is a member of the Seneca nation, which is

part of the unconquered Iroquois Confederacy, and he is still

living on unconquered original land. He contends that he is not

a U.S. citizen and that the U.S. Constitution states “Indians not

Taxed”. 

Native Americans are subject to the same Federal income tax

laws as are other U.S. citizens unless there is an exemption

explicitly created by treaty or statute. Squire v. Capoeman, 351

U.S. 1, 6 (1956); Estate of Poletti v. Commissioner, 99 T.C. 554,

557-558 (1992), affd. 34 F.3d 742 (9th Cir. 1994); see Allen v.

Commissioner, T.C. Memo. 2006-11; see also Rev. Rul. 2006-20,

2006-15 I.R.B. 746. Any exemption must be based on the clear and

unambiguous language of a statute or treaty. Squire v. Capoeman,

supra; see Allen v. Commissioner, supra. Petitioner has not

shown that any treaty or statute specifically exempts any of his

compensation. See George v. Commissioner, T.C. Memo. 2006-121.

Respondent also determined an addition to tax because

petitioner did not file his 2001 return. Respondent’s burden of

production under section 7491(c) is satisfied by our finding that

no return was filed in 2001. To avoid the addition to tax for

failure to file, petitioner has the burden of proving that the

failure to file did not result from willful neglect and was due

to reasonable cause. See United States v. Boyle, 469 U.S. 241,

245 (1985). To prove reasonable cause, a taxpayer must show that
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he or she exercised ordinary business care and prudence but

nevertheless could not file the return when it was due. See

Crocker v. Commissioner, 92 T.C. 899, 913 (1989); sec. 301.6651-

1(c)(1), Proced. & Admin. Regs. Because petitioner failed to

present any reasonable explanation for his failure to file,

respondent's determination with respect to the addition to tax

under section 6651(a)(1) is sustained.

To reflect the foregoing, 

Decision will be entered

under Rule 155.